As discussed earlier, Malaysian reits have been disadvantaged by the following existing unfavorable witholding tax rate: foreign institutional investors especially pension funds and collective investment funds receiving income fro REITs listed in Bursa Malaysia are currently subject to a final witholding tax rate of 20% for 5 years; and non-corporate investors including resident and non-resident [...]

Besides being tax exempted on the disposal of property to a REIT, a company disposing industrial building where initial annual allowances have been claimed to REIT will also not have any balancing charge.

S109D requires a REIT to deduct the necessary tax(26%) from the gross distribution and distributes the net amount to the non-resident company. The tax deducted has to be paid to the Inland Revenue within one month after distributing the net dividend. An account of the details of the recipient has to be accompanied with the [...]

(a) Rental income from the letting of real property is a business source, hence any outgoings and expenses incurred in respect of the business are deductible. Note that any excess of expenses over income is not allowed to be set off in the current year or carried forward to next year of assessment which is [...]

With effect from Year Of Assessment 2006, legal , valuation and consultancy fees in connection with the establishing REIT prior to the approval by the securities commission shall be given tax deductin in the year of assessment where the REIT commences business.[Income Tax(Deduction for Establishment Expenditure of REIT or Property Trust Fund) Rules 2006, PU(A) [...]

Append below a summary of the tax incentives for the Malaysian REITS which impact the REITS and/ investors: (a) Existing Tax Incentives before Budget 2007 Gains arising from disposal of real property to REITS are exempted Stamp duty on transfers of real property to REITS are exempted (b) Further Incentives for REITS as announced in [...]

Source: Securities Commission’s Website On REITS) 1. Is an Islamic real estate investment trust (Islamic REIT) permitted to own (purchase) real estate in which the tenant(s) operates mixed activities that are permissible and non-permissible according to the Syariah? An Islamic REIT is permitted to own (purchase) real estate in which its tenant(s) operates mixed activities [...]