The net rental is taxable at a flat rate of 28% income tax after deduction for loan finance interest, assessment, quit rent, insurance, repairs, maintenance, service charges and sinking fund payments. The annual tax filing is via the Form M to the Inland Revenue Non-Resident Branch. If the Malaysian property is disposed and capital gains are made, the gains are subject to Malaysian capital gains tax, called Real Property Gains Tax. The tax rate is 30% where the property has been owned for up to 5 years and 10% for the 6th year and thereafter.
