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 the Budget 2007

Item (I) and (II) are effective from 1 January 2007 and proposals (iv) and (v) are effective from year of assessment 2007.

(I) Non-corporate investors (example resident and non-resident individuals) and other local entities receiving distributions from REITs listed on Malaysia will be subject to a final withholding tax of 15% for five years;

(II) Foreign institutional investors (example, pension funds and collective investment funds) receiving distributions from REITs listed on Bursa Malaysia will be subjected to a final withholding tax of 20% for five years;

(III) Local corporate investors will be subjected to the existing tax treatment and tax rates;

(IV) Foreign corporate investors will be subjected to a final withholding tax at the rate of 27%;

(V) REITs will be exempted from tax on all its income provided that at least 90% of its total income is distributed to the investors; and

(VI) Where the 90% distribution is not complied with, the REITs will be subjected to income tax while all their investors are eligible to claim tax credits.

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