taken for m-reit.blogspot.com

I have one question as a resident individual, I am still not in one of the tax bracket, cause salary is too low. Can I get back the witholding tax?

jasonkwk,

Witholding tax is NOT refundable, as with the single-tier dividend policy. It does not matter if you are/are not in the tax bracket.

For dividend play i will say reits are much more better as single tier dividend is 25% if i not mistaken. In other words, most of the money was being feedback to those politicians for corruption.

Edited: Sorry, I think I got confused in the first place, If you are talking about the tax being withold in the dividend you received from the REIT fund, then it is not refundable. Anymore, all the dividend we received is final dividend for YA 2009 onwards. Meaning, we will not need to include the dividend in our income tax computation. The word all dividend is Exempted is a mere bullshit, as the company already deducted tax from our initial dividend. Meaning, it is disadvantageous for those that fall into low tax bracket income as they can no longer claim Sec 110 set off..

This post has been edited by andrewckj: Nov 21 2009, 11:37 AM

Actually the withholding tax in REIT of 10% is as good as final tax.

The thing I can think of why it is NOT called the final tax in the first place bcos REITs have to distribute at least 90% of realized profit to unit holders, so they themselves ARE tax exempted ( at the company level ).

Failing which, REIT would suffer the normal TAX as the other businesses ( corporation formed in Malaysia ).

Whether REITs could meet the 90% ? distribution, again depending on their cashflows.

They need to plan the cashflow fairly well.

Again , you need STRONG support and backups from the banks, since loans for Working Capital are on 5 years or less short term. ALSO TAKEN FOR GRANTED THERE IS NO PROBLEM HERE.

If everything goes smoothly, then it is SAFELY taken for granted that the final tax is 10% ( also same as withholding tax ).

Sorry to confuse you. ALL.

This post has been edited by SKY 1809: Nov 21 2009, 11:51 AM

Ya Bro SKY! cool, spot on.

Thanks sky for your explaination.

So in conclusion, reits are being taxed lower compare with corporate.

REIT ITSELF DOES NOT HAVE TO PAY TAX AT ALL.

But whatever they pay to you, 10% tax goes to the Government.

Anyway, the more we know , the more we do not know.

Sounds lagi complicated

This post has been edited by SKY 1809: Nov 21 2009, 12:16 PM

Yup agree with you. The more we want to find out the more we know we don know

Pening kepala

I bet YTL Power gives you enough headache

I am an engineer but studying those financing terms lol

Should take up ACCA instead of Engineering degree

This post has been edited by darkknight81: Nov 21 2009, 12:37 PM

Lols. Let use figure to illustrate.


REIT company Level
Scenario 1
Let say REIT earn RM 10k from its business rental. If the REIT declare all RM 10k from it earned as distribution in dividend, then this REIT company wont have any chargeable income.meaning this REIT deemed to earn ZERO income for the year assessment.

Scenario 2
REIT earn RM 10k. But declare 8k only as dsitribution for dividend. RM10k-8k = RM 2k .THis RM 2k is taxable @ 26%, as per the normal coporate tax rate. Meaning 2k *0.26 =RM 520, to be paid to government.


Unit Holder Level

Assume, REIT has enough cashflow to declare dividend. Say this REIT has 10 shareholders with each shareholders holding 1 share only.

So as usual there are many type of shareholders. Say here, we have 5 share holders are individual investor and 5 more are coporate investor. So upon franking the RM 10k dividend:

Individual investor: They will share out the 5k/5 meaning each getting RM 1k. But REIT will deduce 10% from each of them acting on behalf IRB to collect the tax due to single tax div tier. Meaning each shareholder here will get RM1k* 0.9= RM 900 each.

Corporate Investor: Each will pocket RM 1k too. But REIT deduct 25% of from each of the corporate investor.
Meaning, RM 1k * 0.75 =RM 750 each will be net pocketed by corporate investor.

P/S: Meaning, REIT and all other company will deduct some portion of your dividend before giving you the clean dividend. this is due to the effect of single tier divided wef from 2009 YA onwards. This is to enhance efficiency of tax computation and more income to the government. Hence, government mentioned its an exempt dividend. because your dividend has been taxed and deducted it before being frank to you.

And, the list goes on for other type of investor as stipulated.
Hope you guys understand=))

This post has been edited by andrewckj: Nov 21 2009, 01:01 PM

We understand this lol . What we meant is there are still a lot of thing to learn if we really want to find out more

He is not pening about REITS, but YTL Power.

Perhaps you would help him to solve his YPL Power's problems too.

Lols.well, just sharing what I understand. Finally I can see the usefullness of studying ACCA and passing it. especially the darned Tax paper:P

So you need some help on tax planning?haha, I can help you if you want at Zero fee.

Axreit acquired IDS warehouses

I didn't even notice this news. Thank you cherroy. It is quite surprising that this news could cause its price to soar to a new high. I hope that these new acquisitions are attractive. Will be studying the announcement details now.

It is a long term lease (15 years), 90+ million cost of acqusition with 8 million annual rental income.

Wow then is good what about 9% yield and will be contributing more than 10% in future

It depends on which side of the coin that you are looking at

a) Positively , bcos attractive Rental Yield
b) Negatively , DPU being marginalised

There is a ( consent ) culture here that DPU is the top pick.

That again I would not want to get into any argument again.

But I further want to add one thing from Investing tool point of view.

Supposing a person is having a housing full fexi loan that he has the mean to pay back more.

REITs could be a tool for him to gain more or hedge at the current moment if his loan interest is about 4 to 5% annually.

Instead of pay more to bank, place some money over here.

He may gain a few % more, though not fail proof as the price may sink.

If our economy is likely to get better, then the probability of gaining is high.

Let also assuming there is little Capital Appreciation over here.

I just treat it as an investing tool against others, of lower risk type, not apple to apple.

Judge your own.

This post has been edited by SKY 1809: Nov 23 2009, 06:48 PM