Posted by speakup > 12 hours ago | Report Abuse

no wonder many reits last minute selldown yesterday
because insiders already knew Pmx want 2% tax on dividends

Posted by treasurehunt > 9 hours ago | Report Abuse

Funny computation from the author. What's the transaction costs for offloading RM 2 million shares and buy back again? 2% tax on dividend is peanut to investors.

Posted by Income > 8 hours ago | Report Abuse

Repost:
Posted by getingreal > Oct 19, 2024 2:02 PM | Report Abuse

I am a foreign investor and have a portfolio of Malaysian counters most that I have accumulated over the last 30 years. I am retired, and I live quite comfortably on my Dividend Income. My Dividends on my Malaysian Stocks exceed RM100K per year so this new 2% tax catches me. I issue I have is not paying 2% on dividends I receive over RM 100k, it's how that's processed. As of now I don't have taxable Malaysia income as my dividend income was taxed already. With this proposed new tax Now I will have taxable income in Malaysia requiring me to file a Malaysian tax return. This is not a simple matter. As a foreigner I will be required to engage a registered Malaysian Tax Agent (Cost RM10,000 to register with one) and they will file my returns each year charging me 250 for each source of income (say 20 counters x 250= RM 5.000 per tax return).
The cure is relatively simple, I will sell most of my Malaysian shares to ensure my total dividends in Malaysia remain less than RM100,000. I will take the proceeds sell Ringgit and buy Singapore Dollars to invest the equivalent funds in Singapore. The Singapore dividends will not be taxed in Singapore or Malaysia. I will sell Maybank and buy UOB. Bad for Malaysia as my funds are withdrawn from Malaysia, and good for Singapore as I invest there instead. Dividend yield Maybank Vs UOB is quite similar. This I avoid the hassle, and the costs associated with having to deal with tax returns in Malaysia.


Income
11707 posts
Posted by Income > Oct 19, 2024 3:58 PM | Report Abuse X

Foreigner can run＆invest in Spore or other place. But rich helividend Sslee can't run to invest and get dividend shares in Spore。

Posted by Income > 8 hours ago | Report Abuse

According to an industry expert, stocks with high dividend yields might be sold off before the dividend date to avoid the new tax.

"This 2.0 per cent dividend tax is not welcome by the capital market, but it is applicable to those active big investors.

"Assuming an investor holds 200,000 shares of Maybank (at RM10 it is worth RM2 million, which yields 7.0 per cent tax ), his dividend income would be RM140,000.

"So he will choose to sell on the date of his 200,000 shares. He can then buy back on ex-date," the expert who requested to comment on condition of anonymity told Business Times.


？



Bo-do I why must sell and buy back after ex-date for maybank?
People will buy other shares without dividends
why must hold maybank and avoid dividend by sell and buyback after ex －date?

Posted by hng33 > 7 hours ago | Report Abuse

Dvivdend tax is no only applicable to listed company, but also apply to many small companies which often director of these companies often capitalise on Malaysia Unpropotional tax rate on personal income tax rate 30%, company tax rate 25% and SME tax rate 15%.

Take for example, big listed company director control substantial company stake will intentionally reduce personal wage to avoid paying personal tax 30%. Director in turn will retain company profit for corporate tax rate at 25% or 15% tax in case on SME. These director remuneration will then compensated through high company dividend which director entitle the most and as dividend income is single tier tax at corporate level, therefore all high dividend received by director is TAX FREE. Hence, gov realize these loophole enjoy by these high ent worth director, it need to start tax these high net worth director.

In additional, many big listed company or even SME have many small subsidiary or associate companies under group and many of these director also hold directorship of these small subsidiary or associate which often is most profitable companies under entire group. These inter companies under group if dividend once declare is wholly enjoy by director as group expense before accounted in group financial report.

Posted by StarOfTheBull > 5 hours ago | Report Abuse

Assuming brokerage fee is 0.2%.
Sell RM2 million of contract value you pay brokerage fee of RM4,000, buy back you pay another RM4,000. Total brokerage to pay is RM8,000.
2% tax on dividend of RM140,000 is RM2,800.
Moreover, no guarantee that person can buy that share back at lower price. Therefore it is not a good idea to sell and buy back for the sake of avoiding the 2% dividend tax.

Posted by hng33 > 4 hours ago | Report Abuse

No really, market share price will adjust down to reflect amount of dividend after ex-date.

Under normal circumstances market share price will reflect up more at time company declare dividend, and adjust down more once dividend is ex for entitlement.

Posted by s3phiroth > 4 hours ago | Report Abuse

Say if your dividen yield = 5%, 2% on the DY = 5% * 2% = 0.1% of your portfolio value only. Hope u guys panic and sell at -10% on next monday.

Posted by StarOfTheBull > 3 hours ago | Report Abuse

"Share price up upon dividend declared, share price down on ex dividend date, lower than ex dividend price."

Although it is not wrong, nonetheless this is typical speculators or short term players' point of view. Peace ✌️

Posted by gohkimhock > 2 hours ago | Report Abuse

The impact of this change is limited to dividend amounts exceeding RM100k. Everyday retail traders will not be impacted by this adjustment as the majority of individuals do not receive such substantial dividend payouts.