Malaysia Extends CKD Vehicle OMV Excise Duty Rules Until December 2026

Malaysia has postponed the implementation of its revised open market value (OMV) excise duty framework for locally assembled (CKD) vehicles until December 31, 2026. The decision, announced by the Malaysia Ministry of Finance, follows an earlier deferment that had shifted the implementation timeline to July 2026. According to the ministry, the additional extension provides more time to complete valuation calculations under the revised methodology while ensuring the framework can be applied consistently across the automotive industry.

The revised OMV methodology is designed to broaden the valuation basis used for calculating excise duty. Besides manufacturing-related costs, the updated framework is expected to incorporate additional non-manufacturing cost components, including sales-related expenses, administration expenses, and company profits. The revised calculation method aims to establish a more comprehensive valuation approach for locally assembled vehicles without changing the underlying technical intent of the policy.

Malaysian Automotive Association (MAA) confirmed that it received official notification from the ministry on June 26 regarding the latest extension. The association explained that the postponement would allow additional work to finalize the valuation methodology and support a fair implementation process. It also emphasized the importance of ensuring that the revised framework is applied consistently across manufacturers operating under different business models and financial reporting practices.

Key timeline of the revised OMV excise duty implementation

MAA maintained its earlier assessment that the revised OMV calculation framework is not expected to have a significant impact on prices of locally assembled CKD vehicles. The association reiterated that its position remains unchanged despite the revised implementation schedule. The additional preparation period is intended to help complete the valuation process while promoting consistency and fairness throughout the industry's adoption of the updated excise duty framework.

Frequently Asked Questions

Why did Malaysia postpone the revised CKD vehicle OMV excise duty rules until December 2026?
The Malaysian government postponed the implementation to provide additional time for finalizing the revised open market value calculation methodology. The extension allows authorities to refine how manufacturing and non-manufacturing costs, including sales expenses, administration expenses, and company profits, are incorporated into the valuation framework. It also helps ensure the revised approach is applied fairly and consistently across manufacturers with different business models and financial reporting practices.