Malaysia upstream fiscal summary Report

Country Report 31 March 2025

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Report summary

From 2018, all exploration licences are governed by Revenue/Cost index (R/C) production sharing contracts. The R/C index based sliding scales for cost recovery ceilings, sharing of unused cost oil and profit oil are set prior to each licensing round and are non-biddable items. Other non-biddable items include an export duty of 10%, a research contribution of 0.5%, a sliding scale based supplementary payment of 50 to 70% and petroleum income tax of 38%. Enhanced Profitability Terms (EPT) were introduced as part of 2021 licensing round for shallow-water exploration blocks. The fiscal items include fixed cost recovery ceiling of 70%, two R/C thresholds with improved rates and linear interpolation in between. Supplementary payment is not applicable. In 2020, Malaysia introduced revenue-sharing contracts, Small Field Asset (SFA) and Late Life Asset (LLA) PSCs. Both include royalty at 10% and biddable contractor revenue split. Supplementary payment, research cess are not applicable.

Basis
Licence terms
Government equity participation
Fiscal terms
- Bonuses, rentals and fees
- Indirect taxes
- Royalty
- Ring fencing
- Base
- Rate
- Payment schedule
- PSC production sharing
- 33 more item(s)...
Recent history of fiscal changes
Stability provisions
Split of the barrel and share of profit
Effective royalty rate and maximum government share
Progressivity
Fiscal deterrence