MALAYSIA Law and Practice Contributed by: Natalie Ooi and Nicholas Ooi, Ooi & Ooi
7.7 Requirements Before Use or Inhabitation
The assessment rate is imposed on all property owners, including those with business premis - es. The rate is calculated based on the annual rental value or the capital value of the property. Assessment rates vary between local councils, with each council setting its own assessment rate. Property owners are generally responsible for paying the assessment rates but, in some cases, it may be stipulated in lease agreements that the tenants (business operators) are responsible for the payment. Certain exemptions or reductions are available under specific circumstances. These can vary depending on the local council, but general examples include: • charitable organisations; • vacant properties; and • government buildings. 8.4 Income Tax Withholding for Foreign Investors See 6.7 Payment of VAT . 8.5 Tax Benefits Depreciation deductions are not available for land, but capitalallowances might be available for improvements to commercial properties. For RPGT exemptions, see 2.10 Taxes Applica- ble to a Transaction . For REITs, see 5.3 REITs .
Obtaining a Certificate of Completion and Com - pliance (CCC) is mandatory before a property or building project can be inhabited or used for its intended purpose in Malaysia. It is illegal to occupy or use a building without a valid CCC.
8. Tax 8.1 VAT and Sales Tax
The sale of real estate or property is exempt from SST. This includes the sale of residential, com -
mercial and industrial properties. 8.2 Mitigation of Tax Liability
Acquiring large real estate properties in Malay - sia can incur significant tax liabilities, including stamp duty and RPGT. While there are limited avenues to mitigate these taxes, certain strate - gies and relief provisions may be considered, such as: • stamp duty relief and RPGT exemption for corporate restructuring; and • transfer of property between associated companies. It is advisable to consult tax professionals for tailored strategies. 8.3 Municipal Taxes Municipal taxes related to business premises are typically referred to as “assessment” in Malay - sia. Assessment is essentially taxes levied by local authorities on the occupation of business premises for the provision of public services like waste management, road maintenance and street lighting.
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