A Malaysian-incorporated company normally pays RPGT at 30% within the first three years, 20% in the fourth, 15% in the fifth and 10% from the sixth year. A foreign-incorporated company pays 30% within five years and 10% thereafter. The rate applies to the taxable gain. HASiL's current RPGT table sets out the categories.
This guide covers a company selling Malaysian real property directly as a capital asset. Selling shares in a property company and selling property as trading stock need separate analysis. Use the examples to prepare a calculation for review by your tax adviser and conveyancing solicitor.
Confirm the transaction and company category
Start with what is being sold and who owns it. HASiL's definition of an RPGT gain excludes gains or profits chargeable with, or exempted from, income tax. A property's treatment therefore needs checking before applying an RPGT percentage, especially where the company develops or trades properties. HASiL's basis-of-taxation guidance also distinguishes direct property disposals from corporate disposals of real property company shares under the capital gains tax framework.
For the ordinary company rate table, incorporation is the relevant distinction:
| Holding period | Malaysia | Overseas |
|---|---|---|
| Within the first three years | 30% | 30% |
| Fourth year | 20% | 30% |
| Fifth year | 15% | 30% |
| Sixth year and later | 10% | 10% |
A Malaysian-incorporated company belongs in Part II of Schedule 5. A foreign-incorporated company belongs in Part III. Do not choose the individual column because the shareholder is a Malaysian citizen, or the foreign-company column solely because a shareholder is foreign. Source: HASiL, rates and disposer categories.
Use the statutory acquisition and disposal dates
The relevant dates are not always the dates money arrives or keys change hands. Where there is a written agreement, HASiL generally starts from the agreement date; conditional transactions can have special rules. Have the solicitor confirm both dates before deciding which holding-period band applies. HASiL's date guidance explains the starting rules.
For a decision near an anniversary, prepare the tax calculation before signing. Delaying completion alone may not move the disposal into a later band. The sixth-year band starts after five years of holding under the applicable date rules, rather than after six completed years.
Calculate the gain separately from the accounting profit
Prepare an acquisition-cost schedule and a disposal-cost schedule, with supporting invoices. Book value in the accounts is not automatically the RPGT acquisition price.
Potentially allowable adjustments include incidental acquisition and disposal costs, and qualifying enhancement or preservation expenditure reflected in the asset at disposal. Check the nature of each cost. Expenses allowable under income tax cannot also enter the RPGT calculation, even if they were not claimed. HASiL also identifies financing interest and fees for completing the RPGT return as non-allowable expenditure. HASiL's acquisition and disposal price guidance provides the rules.
Worked example: a company sells in the fourth year
Assume a Malaysian-incorporated company sells its entire interest in a capital investment property for RM700,000. It bought the property for RM500,000. The costs below are assumed to qualify, with no insurance compensation, forfeited acquisition deposits, allowable losses or special reliefs to adjust the calculation. These are invented figures for arithmetic, not a market transaction.
| Calculation | Amount |
|---|---|
| Sale consideration | RM700,000 |
| Less qualifying enhancement expenditure | RM25,000 |
| Less allowable disposal costs | RM20,000 |
| Adjusted disposal price | RM655,000 |
| Purchase consideration | RM500,000 |
| Add allowable acquisition costs | RM15,000 |
| Adjusted acquisition price | RM515,000 |
| Chargeable gain: RM655,000 − RM515,000 | RM140,000 |
| Fourth-year tax: RM140,000 × 20% | RM28,000 |
There is no individual exemption in this company calculation. Applying the same illustrative RM140,000 gain to other categories or periods gives:
| Scenario | RPGT |
|---|---|
| Malaysian company, fifth year at 15% | RM21,000 |
| Malaysian company, sixth year at 10% | RM14,000 |
| Foreign company, fourth year at 30% | RM42,000 |
| Foreign company, sixth year at 10% | RM14,000 |
The comparison isolates the rate. A real decision to hold longer also changes rent, operating costs, sale proceeds and risk; the lower tax figure alone does not establish the better investment outcome.
Why the individual exemptions do not apply
The familiar RM10,000 or 10% Schedule 4 exemption is available to individuals. The separate section 8 private-residence election is also an individual relief, subject to its own conditions. A director living in the company's property does not turn the company into that individual for the sale. HASiL's exemption guidance identifies the eligible persons.
That does not mean every corporate transfer necessarily produces an immediate tax charge. A restructuring or related-party transaction needs a separate review of any applicable relief, approval conditions and valuation rules. Do not copy an individual's exemption into a company return as a shortcut. Our RPGT overview compares the general categories.
Buyer retention and the company's sale proceeds
The buyer's remittance is a credit towards the seller's RPGT. The ordinary company retention rates are 5% within three years and 3% from the fourth year for Part II; Part III is 7%. The available cash consideration can limit the amount.
For the RM700,000 fourth-year Malaysian-company example, ordinary retention is RM21,000. Against final tax of RM28,000, that leaves RM7,000 to pay, assuming the retention is correctly remitted and credited. Retention reduces cash received at completion; it does not reduce the RM140,000 gain as another allowable expense.
From year of assessment 2026, the lower deemed-assessment route can apply where the seller notifies the buyer before remittance. Confirm the calculation and notification with the solicitor. A later estimate does not automatically replace the required retention. HASiL's retention guidance sets out this route and the 60-day remittance requirement.
For comparison, in the sixth-year scenario, ordinary 3% retention would still be RM21,000 against RM14,000 tax. That illustrates why the amount remitted and final liability must be reconciled; any excess credit needs to be dealt with through the tax account and refund process, or avoided through a properly applicable lower remittance.
Filing checklist for the company and buyer
Under RPGT self-assessment for disposals from 2025, the seller generally files within 60 days of disposal and pays the tax or balance within 90 days. The buyer's section 21B remittance is generally due within 60 days. Keep the supporting records for seven years. HASiL's self-assessment guidance is the deadline reference.
Prepare this file before the disposal deadline approaches:
- Company identity, incorporation details, tax number and authorised filing arrangements.
- Acquisition and disposal agreements, with advice on relevant dates.
- Cost schedules, invoices and proof of qualifying enhancement work.
- Records of compensation, insurance proceeds or forfeited deposits affecting acquisition value.
- Any allowable-loss or specific-relief documentation.
- Buyer's remittance evidence and the reconciliation to final tax.
Assign who prepares, reviews, submits and pays; using an adviser should not leave those responsibilities unallocated. Keep filing acknowledgements and payment receipts with the calculation. For a broader walkthrough of the cost schedules, read how to calculate RPGT.