Malaysia Tax Agency Issues Practice Note on Income Taxation of Distributions From Specified Trusts, Funds

The Malaysian Inland Revenue Board March 18 issued Practice Note No. 2/2026, clarifying the income taxation of distributions from Malaysian real estate investment trusts (REITs) and property trust funds (PTFs) to unit holders. The note clarifies that: 1) an exemption applies to a REIT or PTF on total income if it distributes 90 percent or more of its total income in a basis period to unit holders other than resident companies; 2) from YA 2026, resident unit holders must report distributions that are exempt at the REIT or PTF level, because they aren’t withheld; 3) a 24 percent rate applies ...