The Inland
Revenue Board has on 29 October 2012 issued Public Ruling No. 7/2012 : Taxation of
Unit Holders of Real Estate Investment Trusts (REIT) / Property Trust Funds
(PTF). The objective of this ruling is to explain the tax treatment of
distribution of income from real estate investment trusts / property trust
funds in Malaysia
On filing
of Income Tax Return Form (ITRF), only under the following circumstances income
from REIT/PTF has to be reported:-
(a)
in
the case of resident corporate unit holders where the withholding tax provision
under Section 109D of the ITA 1967 is not applicable, and
(b)
where
REITs/ PTF –
(i) are not exempted from tax under
Section 61(1A) of the ITA 1967 (on the basis that the distribution is less than
90% of its total income for that YA), and
(ii) distribute income which carries a
tax credit proportionate to each unit of the taxable income in respect of the
tax paid by the REITs/PTF,
unit
holders should declare the REITs/PTF distribution as income in their ITRF and
claim a set-off under section 110(9A) of the ITA 1967.
Sources : Inland Revenue Board of Malaysia
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