Tax on REIT (Real Estate Investment Trusts) Investment


If a (Real Estate Investment Trusts) fund distributed at least 90 percent of their total yearly income to unit holders, the REIT itself is exempted from tax for that year of assessment.

However, unit holders are liable to tax on the distribution of income. Since the income distributed by REITs are tax exempt, no tax credit under subsection 110(9A) of the Income Tax Act (ITA) 1967 would be available to the unit holders.

On the other hand, tax exempt income received by REITs and subsequently distributed to unit holders continue to be tax exempt in the hands of these unit holders.

REITs unit holders are taxed in the year of assessment the distribution is received not the financial year of the REITs.

Starting for the year 2009, tax for REIT dividend is as follows.

Entity Status Tax Type Tax Rate (%)
Company Resident Corporate Tax 25
Non-Resident Withholding Tax 25
Foreign Institutional Investor Withholding Tax 10
Individual Resident Withholding Tax 10
Non-Resident Withholding Tax 10



If a unit holder has income from sources other than REITs, an Income Tax Return Form (ITRF) has to be filed (e.g. Form BE, B or M for individuals or Form C for companies), income from REITs is not required to be included in the ITRF form as the Withholding Tax is a final tax.

Other Resources

LHDN Public Ruling on REIT Investment

Type of Income Tax Return Form (ITRF) for Individual


Every individual in Malaysia, including resident or non-resident who is liable to tax is required to declare his income to Inland Revenue Board of Malaysia (IRBM) or Lembaga Hasil Dalam Negeri Malaysia (LDHN). Taxpayer is responsible to submit Income Tax Return Form (ITRF) and make income tax payment yearly prior to due date.

Depending on individual status & source of income, the taxpayer has to complete and submit proper type of form. Below is the guideline to select which type of form is applicable.

Status Description Applicable Form
Resident Resident who carry on business and other income B (e-B)
Resident who is knowledge worker or expert worker BT (e-BT)
Resident who is on employment and other income BE (e-BE)
Non-Resident Resident who carry on business, employment  and other income M (e-M)
Resident who is business, employment  and other Income (knowledge worker) MT (e-MT)

Page 8 of 9« First...56789