Global Minimum Tax and Domestic Top-up Tax (Pillar Two)
Malaysia brought the OECD's global minimum tax into law through the Finance (No. 2) Act 2023, and it applies for financial years beginning on or after 1 January 2025. Groups with consolidated revenue of at least EUR 750 million in two of the four preceding years must now test the effective tax rate of their operations in every jurisdiction against a 15% minimum. Where Malaysian entities fall short, a Domestic Top-up Tax collects the difference in Malaysia, and a Multinational Top-up Tax lets Malaysia collect top-up tax on low-taxed foreign subsidiaries of Malaysian-parented groups. LHDN has issued guidelines and frequently asked questions, and for the first transition year the top-up tax return and payment are due eighteen months after the end of the financial year. For a December 2025 year end, that is 30 June 2027.
This two-day course is for group finance directors, tax managers, financial controllers, auditors and treasury teams in in-scope groups, and for Malaysian subsidiaries of foreign groups that must supply data upward. Day one covers scope and the mechanics, from GloBE income to covered taxes and the jurisdictional effective tax rate. Day two computes top-up tax on worked examples, applies the substance-based income exclusion and the safe harbours, and plans the data and filings. It explains the OECD model and how LHDN has implemented it, and flags where participants should check the latest LHDN guidance, because the guidelines and FAQs are still being updated. It is technical training, not tax advice on a specific group's position.
HRD Corp SBL-Khas Claimable
Programme Agenda
Day 1, 9:00 AM - 9:15 AM
Welcome and Programme Overview
Introduction to the session, objectives, and housekeeping.
Day 1, 9:15 AM - 10:15 AM
Why the Global Minimum Tax Exists
The OECD Pillar Two agreement, the GloBE model rules, and how Malaysia implemented them through the Finance (No. 2) Act 2023 with a Multinational Top-up Tax and a Domestic Top-up Tax, effective for financial years beginning on or after 1 January 2025.
Day 1, 10:15 AM - 10:30 AM
Break
Day 1, 10:30 AM - 11:30 AM
Scope: Is Your Group In?
The EUR 750 million consolidated revenue test in two of the four preceding years, constituent entities, excluded entities, joint ventures and minority-owned entities, and how a foreign-parented group's Malaysian entities are affected.
Day 1, 11:30 AM - 12:30 PM
GloBE Income and Covered Taxes
Starting from financial accounting net income, the main adjustments to arrive at GloBE income or loss, and which taxes count as covered taxes, including deferred tax adjustments.
Day 1, 12:30 PM - 1:30 PM
Lunch
Day 1, 1:30 PM - 3:15 PM
The Jurisdictional Effective Tax Rate
Blending entities by jurisdiction, computing the effective tax rate step by step, and common distortions such as tax incentives, pioneer status and investment tax allowances that can pull Malaysian rates below 15%.
Day 1, 3:15 PM - 3:30 PM
Break
Day 1, 3:30 PM - 4:45 PM
Substance-Based Income Exclusion and Top-up Tax
The payroll and tangible asset carve-outs and their transitional rates, excess profit, and computing the top-up tax percentage and amount. Worked example for a Malaysian manufacturing entity with incentives.
Day 1, 4:45 PM - 5:00 PM
Day 1 Close
Recap and what to review before day two.
Day 2, 9:00 AM - 9:15 AM
Day 1 Review
Recap of day one and the questions it left open.
Day 2, 9:15 AM - 10:15 AM
Domestic and Multinational Top-up Tax in Malaysia
How the Domestic Top-up Tax is computed and who pays it, how it interacts with top-up taxes elsewhere, and when the Multinational Top-up Tax applies to low-taxed foreign subsidiaries of Malaysian-parented groups.
Day 2, 10:15 AM - 10:30 AM
Break
Day 2, 10:30 AM - 12:30 PM
Safe Harbours and Simplifications
The OECD transitional country-by-country reporting safe harbour, the domestic top-up tax safe harbour and simplified calculations, what each requires, and how to confirm their current treatment under LHDN's guidelines before relying on them.
Day 2, 12:30 PM - 1:30 PM
Lunch
Day 2, 1:30 PM - 3:15 PM
Returns, Notifications and Data
The GloBE information return, Malaysian top-up tax returns and notifications, the eighteen-month deadline for the first transition year, record keeping, and building the data pipeline from subsidiaries to the group tax team.
Day 2, 3:15 PM - 3:30 PM
Break
Day 2, 3:30 PM - 4:45 PM
Workshop: A Group Computation End to End
Teams take a case group with entities in Malaysia and two other jurisdictions through scope, effective tax rate, carve-outs, top-up tax and filing obligations, and present the result and the data gaps they found.
Day 2, 4:45 PM - 5:00 PM
Wrap-Up and Q&A
Key takeaways, next steps, and close.
Key Outcomes
- Determine whether a group and its Malaysian entities are within scope
- Compute GloBE income, covered taxes and a jurisdictional effective tax rate
- Apply the substance-based income exclusion and calculate top-up tax
- Explain how Malaysia's Domestic and Multinational Top-up Taxes apply
- Assess whether safe harbours are available and what they require
- Plan the data, returns and deadlines for the first filing years
Training Mode Physical / Online / Hybrid / e-learning
HRD Corp SBL-Khas Claimable
Level Intermediate. For group finance and tax teams, financial controllers, auditors and treasury in groups with EUR 750 million or more in consolidated revenue, and Malaysian subsidiaries of such groups. Working knowledge of financial statements and deferred tax assumed.
Duration 2 Days (16 Hours) | 9:00 AM to 5:00 PM daily
Venue In-house at the client's premises, or delivered via the client's preferred platform (Microsoft Teams, Zoom, or equivalent)
Assessment A group top-up tax computation completed in the workshop, plus a written knowledge check
Certificate Certificate of Completion issued to all participants upon full attendance