Malaysia
MYS·Asia
Official Tax Sources
Unique / Country-Specific Tax
Real Property Gains Tax; Sales & Service Tax (SST)
Source: hasil.gov.myNotes
LHDN
Regional Tax Variations (16)
Johor
No state sales tax; Iskandar Malaysia SEZ incentives; 15% knowledge worker rate
Iskandar Development Region: 15% reduced tax for knowledge workers
Iskandar Malaysia special economic zone; Singapore border; manufacturing hub
Kedah
No state sales tax; Kulim Hi-Tech Park incentives; agricultural zone
Standard federal taxation; no state sales tax
Rice bowl of Malaysia; Langkawi duty-free island; electronics manufacturing
Kelantan
No state sales tax; ECER incentives; border trade with Thailand
Standard federal taxation; no state sales tax
East Coast Economic Region; Thai border trade; agriculture/fishing
Melaka
No state sales tax; UNESCO heritage tourism incentives
Standard federal taxation; no state sales tax
Historical port city; tourism/electronics; smallest peninsular state
Negeri Sembilan
No state sales tax; industrial park incentives near KL
Standard federal taxation; no state sales tax
Proximity to KL; automotive/electronics manufacturing
Pahang
No state sales tax; ECER incentives; Malaysia-China Kuantan Industrial Park 15% tax
ECER: 15% reduced tax at Kuantan Industrial Park
Largest peninsular state; Kuantan Industrial Park; mining/timber
Pulau Pinang
No state sales tax; Penang Development Corp incentives; FTZ electronics
Standard federal taxation; no state sales tax
Penang Free Trade Zone; semiconductor/electronics hub; George Town heritage
Perak
No state sales tax; tin mining heritage; emerging industrial zones
Standard federal taxation; no state sales tax
Ipoh; former tin mining; growing manufacturing/tourism
Perlis
No state sales tax; ECER eligible; smallest state
Standard federal taxation; no state sales tax
Smallest Malaysian state; Thai border; agriculture-based
Selangor
No state sales tax; multiple FTZs; highest state GDP
Standard federal taxation; no state sales tax
Wealthiest state; surrounds KL; Shah Alam; major industrial base
Terengganu
No state sales tax; ECER incentives; petroleum royalties 5% from federal
ECER incentives; petroleum royalties
East Coast; oil & gas; ECER knowledge worker incentives; tourism
Sabah
5% State Sales Tax (constitutional right); timber/palm oil levies; autonomous fiscal powers
5% State Sales Tax; autonomous tax powers
East Malaysia; own sales tax since Malaysia Agreement 1963; oil & gas; palm oil
Sarawak
5% State Sales Tax + 5% on petroleum products (since 2019); autonomous fiscal powers
5% State Sales Tax incl. petroleum; autonomous tax powers
Largest state; own sales tax; petroleum tax since 2019; timber/LNG exports
Kuala Lumpur (FT)
No state sales tax; federal territory; financial hub incentives; TRX tax-free zone
Standard federal taxation; federal territory
Capital city; financial centre; Tun Razak Exchange tax incentives
Labuan (FT)
Labuan IBFC: flat 3% tax or RM20000; no withholding tax on dividends; offshore regime
Labuan business tax: flat 3% or RM20000
International Business & Financial Centre; flat 3% business tax; offshore companies
Putrajaya (FT)
No state sales tax; federal administrative capital; government sector
Standard federal taxation; federal territory
Federal administrative capital; government offices; planned city
| State / Province | Type of Variation | Key Local Tax | Notes |
|---|---|---|---|
| Johor | Iskandar Development Region: 15% reduced tax for knowledge workers | No state sales tax; Iskandar Malaysia SEZ incentives; 15% knowledge worker rate | Iskandar Malaysia special economic zone; Singapore border; manufacturing hub |
| Kedah | Standard federal taxation; no state sales tax | No state sales tax; Kulim Hi-Tech Park incentives; agricultural zone | Rice bowl of Malaysia; Langkawi duty-free island; electronics manufacturing |
| Kelantan | Standard federal taxation; no state sales tax | No state sales tax; ECER incentives; border trade with Thailand | East Coast Economic Region; Thai border trade; agriculture/fishing |
| Melaka | Standard federal taxation; no state sales tax | No state sales tax; UNESCO heritage tourism incentives | Historical port city; tourism/electronics; smallest peninsular state |
| Negeri Sembilan | Standard federal taxation; no state sales tax | No state sales tax; industrial park incentives near KL | Proximity to KL; automotive/electronics manufacturing |
| Pahang | ECER: 15% reduced tax at Kuantan Industrial Park | No state sales tax; ECER incentives; Malaysia-China Kuantan Industrial Park 15% tax | Largest peninsular state; Kuantan Industrial Park; mining/timber |
| Pulau Pinang | Standard federal taxation; no state sales tax | No state sales tax; Penang Development Corp incentives; FTZ electronics | Penang Free Trade Zone; semiconductor/electronics hub; George Town heritage |
| Perak | Standard federal taxation; no state sales tax | No state sales tax; tin mining heritage; emerging industrial zones | Ipoh; former tin mining; growing manufacturing/tourism |
| Perlis | Standard federal taxation; no state sales tax | No state sales tax; ECER eligible; smallest state | Smallest Malaysian state; Thai border; agriculture-based |
| Selangor | Standard federal taxation; no state sales tax | No state sales tax; multiple FTZs; highest state GDP | Wealthiest state; surrounds KL; Shah Alam; major industrial base |
| Terengganu | ECER incentives; petroleum royalties | No state sales tax; ECER incentives; petroleum royalties 5% from federal | East Coast; oil & gas; ECER knowledge worker incentives; tourism |
| Sabah | 5% State Sales Tax; autonomous tax powers | 5% State Sales Tax (constitutional right); timber/palm oil levies; autonomous fiscal powers | East Malaysia; own sales tax since Malaysia Agreement 1963; oil & gas; palm oil |
| Sarawak | 5% State Sales Tax incl. petroleum; autonomous tax powers | 5% State Sales Tax + 5% on petroleum products (since 2019); autonomous fiscal powers | Largest state; own sales tax; petroleum tax since 2019; timber/LNG exports |
| Kuala Lumpur (FT) | Standard federal taxation; federal territory | No state sales tax; federal territory; financial hub incentives; TRX tax-free zone | Capital city; financial centre; Tun Razak Exchange tax incentives |
| Labuan (FT) | Labuan business tax: flat 3% or RM20000 | Labuan IBFC: flat 3% tax or RM20000; no withholding tax on dividends; offshore regime | International Business & Financial Centre; flat 3% business tax; offshore companies |
| Putrajaya (FT) | Standard federal taxation; federal territory | No state sales tax; federal administrative capital; government sector | Federal administrative capital; government offices; planned city |