Rental Income - Business Income or Passive Income and Related Tax Compliance Requirement

By: Alvin Phung, Tax Manager

PKFTAX@PKFMalaysia.com

A simple guide for property owners and landlords

Rental income may be classified as either business income or non-business rental income. The difference depends on how the property is managed and whether services are actively provided together with the letting.

1.How do I know which category applies? Or why does it matter?

2. Other tax and compliance matters to consider

If there is any doubt, it is always wise to seek professional advice. As each rental arrangement must be considered on its own facts, and the proper tax treatment should be reviewed carefully based on the level of activities carried out and level of services provided.