Sunway REIT Management Sdn Bhd, as Manager for SUNREIT (“the Manager”) wishes to inform that based on Public Ruling No. 9/2012 dated 26 November 2012, a real estate investment trust ("REIT") has to operate the hotel on its own to be entitled for the Industrial Building Allowance (“IBA”) claims. The Manager has appealed against this treatment and was rejected by the Inland Revenue Board ("IRB"). Subsequently, the Manager proceeded to file an action in the High Court (Appellate and Special Powers Division) for judicial review on 24 March 2014. Pending the decision by the High Court, the Manager has taken a prudent approach in computing the taxable distribution to the unitholders by not claiming for IBA on hotel properties which resulted in a lower non-taxable portion of income distribution paid for the period from 1 January 2013 to 30 June 2015 (“Affected Distributions”).

On 8 May 2015, the High Court decided in favour of the Manager and IRB appealed to the Court of Appeal. However, IRB withdrew their appeal and on 28 August 2015, the Court of Appeal confirmed the discontinuance of the appeal by IRB. Hence, the Manager will compute income distribution by claiming IBA on hotel properties, effective from first quarter financial year 2016, which will result in a higher non-taxable income distribution to be paid.

In relation to the Affected Distributions, the Manager wishes to inform as follows:

(i)         In respect of resident and non-resident individual unitholders and institutional investors who are subject to withholding tax of 10% and foreign corporate unitholders who are subject to withholding tax of 25%          

           The Manager is currently liaising with IRB on the manner of refund to the unitholders as a result of the higher withholding tax amount paid to IRB in relation to the Affected                  Distributions. Due announcement will be made once confirmation from IRB on the manner of refund to the unitholders has been obtained.

(ii)        Resident corporate unitholders who are subject to the prevailing corporate tax rate (current rate is 25%)

           Resident corporate unitholders may need to reassess its tax position and to consider whether to revise its tax return to IRB.

SUNREIT shall issue revised tax vouchers upon obtaining the reply from IRB as per item (i) above to restate the higher non-taxable income distribution and lower taxable income distribution for the above 11 Affected Distributions. Total income distribution per unit for the Affected Distributions will remain the same.

This announcement is dated 28 October 2015.