Updates On Witholding Tax Rate On Malaysian REITs

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 individuals as well as other local entities receiving income from REITs listed in Bursa Malaysia are currently subject to a final witholding tax of 15% for 5 years

Good news are in, as the Budget 2009 has allows the final witholding tax rate imposed on foreign institutional as well as non-corporate investors including individual residents and non-residents reduce to 10% . This is effective from 1.1.2009 until 31.12.2011