1. Who Pays Tax?
• The Landlord (Property Owner) is the one who must declare rental income and pay personal income tax (if individual) or corporate tax (if rented from a company).
• Your Sdn Bhd may have a tax obligation to withhold part of the rent only in certain cases (explained below).
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2. Tax for Your Company (the Tenant)
If your Sdn Bhd rents a house for legitimate business purposes (e.g. for staff accommodation, office space, or directors’ use with justification):

a) Claim as a Business Expense
• Your company can claim the rental payments as a deductible expense in the corporate tax computation only if:
o It’s supported by a valid tenancy agreement.
o The rental is wholly and exclusively for business purposes.
o Payment is made through company accounts.

b) No Tax on Rental Paid
• Your company does not pay any direct tax on the house rent.
• BUT: If the landlord is a non-resident individual or company, your company must withhold 10% of the rent and remit it to LHDN under Section 109F of the Income Tax Act.
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3. When Do You Pay Tax or Withhold?
If landlord is:
Malaysian individual No WHT - Just pay rent monthly/yearly.
Malaysian company No WHT - Normal rental payments.
Non-resident individual or foreign company Yes – Withhold 10% - Must remit to LHDN by end of following month of rental payment.
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4. Annual Corporate Tax Filing (Your Sdn Bhd)
Even though rent is an expense, your company must:
• Report the rent under deductible expenses in the Form C (annual corporate tax return).
• Submit by 7 months after financial year-end (e.g., if FYE is Dec 31, tax filing due by July 31).
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5. Other Considerations
• If the house is for a director, it may be treated as a benefit-in-kind (BIK) and taxed in the director’s personal income tax unless the company has a strong justification that it’s a business necessity.
• SST (Sales and Service Tax) generally does not apply to residential rent.

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1
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Sdn Bhd 3
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2
Sdn Bhd
a)

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b)

 1967109F 10% LHDN
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3 Withholding Tax


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10% - LHDN

LHDN
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4 Form C

* Form C
* 7
12 31 7 31
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5
BIK, Benefit-In-Kind
SST SST