The Inland Revenue Board's Practice Note No. 2/2026 has formalised the tax treatment for REIT and property trust fund unitholders from the 2026 assessment year onwards, confirming that the previous 10% withholding tax regime for most non-corporate investors has ceased to apply.

Under the new framework, Malaysian investors will be taxed based on the respective unitholder's tax profiles and applicable provision of the Income Tax Act, 1967, with no withholding tax deduction, while foreign individuals will be taxed at 30% of chargeable income and non-resident corporations at 24% withholding tax.