The Distribution given by REITs, or Dividend, is taxable in certain stock exchange markets. For example, all dividends of REITs in Malaysia must be taxed. Details as follow:
- Tax Resident Companies (no withholding tax)
- Resident and Non-Resident Individuals (withholding tax rate at 10%)
- Resident Institutional Investors (withholding tax rate at 10%)
- Non-Resident Institutional Investors (withholding tax rate at 10%)
- Non-Resident Companies (withholding tax rate at 24%)
- Nominees (withholding tax rates applicable to respective beneficial owners of the units)
In Malaysia if you are an individual investor, withholding tax 10%, for example, Alaqar (5116.KLSE) declared a dividend of 2.06 sen per unit (of which 0.79 sen per unit is taxable and 1.27 sen per unit is non-taxable) in 2Q2020 in the hands of unitholders)
0.79cent (RM) of 2.06cent must be paid with 10% withholding tax, so only 1.981cent (RM) per unit was finally received.
It must be noted that Hong Kong and Singapore REITs do not have any withholding tax.
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