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Malaysia: FAQs about tax deduction for landlords offering reduced rent (COVID-19)

Malaysia: FAQs about tax deduction for landlords

The Malaysian Inland Revenue Board issued a set of updated “frequently asked questions” (FAQs) on the special tax deduction available for landlords that provide a rental reduction of at least 30% to small and medium-sized enterprise (SME) tenants and regarding business premises rented to non-SMEs—support offered in response to the coronavirus (COVID-19) pandemic.


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For background, read TaxNewsFlash

The FAQs provide:

  • A qualifying person will be allowed a special tax deduction in an amount equal to the rental reduction granted to SME tenants and non-SME tenants as follows:
    • For SME tenants—the period of rental reduction is from April 2020 to June 2021.
    • For non-SME tenants—the period of rental reduction offered is from January 2021 to June 2021.
  • For purposes of claiming the special tax deduction, an SME status certificate issued up to 30 June 2021 can be used as verification of the tenants' SME status.
  • The tax authority is currently updating the worksheet (form) to be used to claim the special tax deduction.

KPMG observation

The updated FAQs removed a question regarding whether a qualifying person is eligible to claim the special tax deduction if the premises are rented to a related company. An official with the tax authority informally clarified that the incentive applies as long as the tenant's SME status is supported by the SME status certificate, and would not affect the landlord's eligibility to claim this special tax deduction even if the business premise is rented to a related company.

Read a March 2021 report prepared by the KPMG member firm in Malaysia

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