CCS Tax

The defined value threshold for Section 15C to apply is:

A) 50% of total tangible assets
B) 65% of total tangible assets
C) 75% of total tangible assets
D) 85% of total tangible assets

Under Section 15C, gains from the disposal of shares in a controlled company incorporated outside Malaysia are deemed derived from Malaysia when the company owns:

A) Only Malaysian real property
B) Only shares of another controlled company
C) Either Malaysian real property or shares of another controlled company, or both
D) Only Malaysian business assets

What is the fixed prescribed value for a driver provided by an employer?

A) RM300 per month
B) RM500 per month
C) RM600 per month
D) RM1,000 per month

The Practice Note No. 2/2026 issued by the Inland Revenue Board of Malaysia explains how REIT/PTF income distributions will be taxed in Malaysia from YA 2026 onwards.

It states that if 90% or more of a REIT's or PTF's total income is distributed to unit holders, the entity enjoys full tax exemption under Section 61A of the Income Tax Act.

The big change is that the earlier concessional/final withholding tax treatment for many non-corporate unit holders ends after YA 2025.

Before YA 2026, many unit holders, such as resident individuals, non-resident individuals, foreign institutional investors, and others, were generally subject to final withholding tax at 10% on gross distributions for YA 2020–2025, while non-resident companies were taxed at 24% final withholding tax.

From YA 2026:
1) Resident individuals: no WHT; taxed under the normal individual progressive tax rates and must declare the income.

2) Resident companies: no WHT; taxed at the normal corporate tax rate.

3) Non-resident companies: treatment unchanged; 24% final WHT still applies.

4) Non-resident individuals / foreign institutional investors / other non-company holders: generally no WHT, but taxed at 30% of chargeable income and must file tax returns.

For general investors, the practical message is simple:
REIT income may now create filing obligations and a higher effective tax burden for some holders from YA 2026.

Investors should carefully review their residence status and investor category. ✍️