SECTION 09 pg. 266 AL-SALĀM REIT NOTES TO THE FINANCIAL STATEMENTS - 31 December 2025 7. Tax expense (Cont’d) Deferred tax liability has been provided for the investment properties held by Al-Salām REIT at 10% which reflects the expected manner of recovery of the investment properties, i.e. recovered through sale. Reconciliation of the tax expense is as follows: Group Fund 2025 RM 2024 RM 2025 RM 2024 RM Profit before tax 13,836,397 5,532,009 13,512,873 5,258,893 Tax at the statutory tax rate of 24% 3,320,735 1,327,682 3,243,090 1,262,134 Expenses not deductible for tax purposes 1,545,908 981,755 1,545,908 981,755 Income not subject to tax (4,786,643) (2,309,437) (4,708,998) (2,243,889) Deferred tax recognised at different tax rate 135,012 247,559 135,012 247,559 215,012 247,559 215,012 247,559 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, distributions to unitholders (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 distributions in their normal corporate tax return and subject to the normal corporate tax rate of 24%.
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