1. Malaysia has implemented the Global Minimum Tax (GMT) as part of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
2. Under Malaysia’s GMT framework, two key tax mechanisms have been introduced to ensure compliance with the 15 percent minimum effective tax rate. The Domestic Top-up Tax (DTT) applies to Malaysian entities, ensuring they meet the required tax threshold, while the Multinational Top-up Tax (MTT) is designed for MNEs operating in Malaysia to align their global income taxation with international standards.
3. Companies falling below this threshold must file a top-up tax return, with transitional penalty relief available to support businesses during the initial implementation phase.
4. This framework, effective from January 1, 2025, is part of Malaysia’s commitment to aligning its tax policies with OECD guidelines and maintaining competitiveness within the ASEAN region.