261 FINANCIAL STATEMENTS Integrated Annual Report 2025 NOTES TO THE FINANCIAL STATEMENTS 31 December 2025 7. TAX CREDIT (CONT’D) Reconciliations of the tax credit applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Fund are as follows: Group Fund 2025 RM 2024 RM 2025 RM 2024 RM Profit before tax 55,717,385 58,074,854 58,448,626 45,717,521 Tax at the statutory tax rate of 24% 13,372,172 13,937,965 14,027,670 10,972,205 Different tax rates in other country (548,621) (1,571,876) - - Deferred tax recognised at different tax rate - (200,000) - (200,000) Non-deductible expenses 4,444,107 6,452,357 3,054,961 8,923,953 Income not subject to tax (1,073,244) (10,014,122) (1,073,244) (12,163,388) Income exempted from tax (16,194,414) (8,804,324) (16,009,387) (7,732,770) Tax expense for the year - (200,000) - (200,000) Pursuant to the Section 61A of the Income Tax Act 1967 (ITA), where 90% or more of the total income of the unit trust is distributed to the unitholders, the total income of the unit trust for that year of assessment shall be exempted from tax. The Manager also expects to distribute the net income within two months from the end of each financial year and accordingly, no estimated current tax payable is required to be provided in the financial statements. As at the date of this financial statements, the Fund has declared more than 90% of its distributable income to unitholders for the financial year ended 31 December 2025 accordingly. No provision for income tax expense has been made for the year. Deferred tax liability has been provided for the investment properties held by the Fund at 10% which reflects the expected manner of recovery of the investment properties, i.e. recovered through sale. Taxation of the Unitholders Pursuant to Section 109D(2) of the Malaysian Income Tax Act 1967, where 90% or more of the Real Estate Investment Trust’s (“REIT”) total taxable income is distributed by the REIT, income distributions (other than resident corporate investors) will be subject to tax based on a withholding tax mechanism at the following rates: Unitholders Tax rate Individuals and all other non-corporate investors such as institutional investors 10% Non-resident corporate investors 24% Resident corporate investors are required to report the income distributions in their normal corporate tax return and subject to the normal corporate tax rate of 24% (2024: 24%).
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