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<h2 style="text-align: justify;">Taxation</h2>
<h3 style="text-align: justify;">12. Double Taxation Agreement</h3>
Double Taxation Agreement (DTA) is an agreement between two countries seeking to avoid double taxation by defining the taxing rights of each country with regard to crossborder flows of income and providing for tax credits or exemptions to eliminate double taxation.
The objectives of Malaysian DTA are as follows:
<table border="0" cellspacing="3" cellpadding="0" width="670">
<tbody>
<tr>
<td width="30" valign="middle">i.</td>
<td width="631">to create a favourable climate for both inbound and outbound investments;</td>
</tr>
<tr>
<td valign="middle">ii.</td>
<td>to make Malaysia's special tax incentives fully effective for taxpayers of capital exporting countries;</td>
</tr>
<tr>
<td valign="top">iii.</td>
<td valign="top">to obtain a more effective relief from double taxation compared to relief gained under unilateral measures; and</td>
</tr>
<tr>
<td valign="middle">iv.</td>
<td valign="middle">to prevent evasion and avoidance of tax</td>
</tr>
</tbody>
</table>
Like many other countries in the developed as well as the developing world, Malaysia too cannot absolve herself from the need to facilitate her trade and investments with the outside world through international tax treaty network with other countries. The increased pace of industrialisation coupled with increased foreign direct investment in the country necessitated tax treaty arrangements with other countries to provide investors with certainty and guarantees in the area of taxation. As at 30 September 2009, the effective DTAs are as follows:
<table style="width: 632px; height: 469px;" border="2" cellspacing="3" cellpadding="2" width="632" bordercolor="#daedff">
<tbody>
<tr>
<td width="155">
Albania
</td>
<td width="183">
Ireland
</td>
<td width="167">Qatar</td>
</tr>
<tr>
<td width="155">
Argentina*
</td>
<td width="183">
Italy
</td>
<td width="167">
Romania
</td>
</tr>
<tr>
<td width="155">
Australia
</td>
<td width="183">
Japan
</td>
<td width="167">
Russia
</td>
</tr>
<tr>
<td width="155">
Austria
</td>
<td width="183">
Jordan
</td>
<td width="167">
Saudi Arabia
</td>
</tr>
<tr>
<td width="155">
Bahrain
</td>
<td width="183">Korea, Republic</td>
<td width="167">
Seychelles
</td>
</tr>
<tr>
<td width="155">
Bangladesh
</td>
<td width="183">Kuwait</td>
<td width="167">
Singapore
</td>
</tr>
<tr>
<td width="155">
Belgium
</td>
<td width="183">Kyrgyz, Republic</td>
<td width="167">South Africa</td>
</tr>
<tr>
<td width="155">
Canada
</td>
<td width="183">
Lebanon
</td>
<td>South Korea</td>
</tr>
<tr>
<td width="155">
China
</td>
<td width="183">
Luxembourg
</td>
<td>Spain</td>
</tr>
<tr>
<td>Chile</td>
<td width="183">
Malta
</td>
<td width="167">
Sri Lanka
</td>
</tr>
<tr>
<td>Croatia</td>
<td width="183">
Mauritius
</td>
<td width="167">Sudan</td>
</tr>
<tr>
<td width="155">
Czech Republic
</td>
<td width="183">
Mongolia
</td>
<td width="167">
Sweden
</td>
</tr>
<tr>
<td width="155">
Denmark
</td>
<td width="183">Morocco</td>
<td width="167">
Switzerland
</td>
</tr>
<tr>
<td width="155">
Egypt
</td>
<td width="183">Myanmar</td>
<td width="167">Syria</td>
</tr>
<tr>
<td width="155">
Fiji
</td>
<td width="183">Namibia</td>
<td width="167">
Thailand
</td>
</tr>
<tr>
<td width="155">
Finland
</td>
<td width="183">
Netherlands
</td>
<td width="167">
Turkey
</td>
</tr>
<tr>
<td width="155">
France
</td>
<td width="183">
New Zealand
</td>
<td width="167">
United Arab Emirates
</td>
</tr>
<tr>
<td width="155">
Germany
</td>
<td width="183">
Norway
</td>
<td width="167">
United Kingdom
</td>
</tr>
<tr>
<td width="155">
Hungary
</td>
<td width="183">Pakistan</td>
<td width="167">
United States of America*
</td>
</tr>
<tr>
<td>India</td>
<td width="183">Papua New Guinea</td>
<td width="167">
Uzbekistan
</td>
</tr>
<tr>
<td width="155">Indonesia</td>
<td width="183">
Philippines
</td>
<td>Vietnam</td>
</tr>
<tr>
<td>Iran</td>
<td width="183">Poland</td>
<td> </td>
</tr>
</tbody>
</table>
* Limited Agreement Qatar: Income Tax/Withholding Taxes - for year of assessment beginning on or after 1 January 2010 and Petroleum Income Tax - for year of assessment beginning on or after 1 January 2011
In the case of Taiwan (represented by Taipei Economic and Cultural Office in Malaysia) double taxation relief is given by way of the following Income Tax Exemption Order:
<table border="0" cellspacing="3" cellpadding="0" width="670">
<tbody>
<tr>
<td width="38">i.</td>
<td width="623">P.U.(A) 201 (1998)</td>
</tr>
<tr>
<td>ii.</td>
<td>P.U.(A) 202 (1998)</td>
</tr>
</tbody>
</table>
 The withholding tax for Interest, Royalties and Fees for Technical Services are reduced to 10%, 10% and 7.5% respectively.
For more information, please visit <a href="http://www.hasil.gov.my " target="_blank">http://www.hasil.gov.my</a> or email to <a href="mailto:lhdn_int@hasil.gov.my" target="_blank">lhdn_int@hasil.gov.my</a>
Department of International Tax Inland Revenue Board of Malaysia 3rd Floor, Block 9 Government Office Complex Jalan Duta 50600 Kuala Lumpur Malaysia Tel:  (603) 6209 1000, or (603) 6203 2330/2540 (for outside Malaysia) Fax: (603) 6201 9884

Invest in Malaysia

Taxation

12. Double Taxation Agreement

Double Taxation Agreement (DTA) is an agreement between two countries seeking to avoid double taxation by defining the taxing rights of each country with regard to crossborder flows of income and providing for tax credits or exemptions to eliminate double taxation.

The objectives of Malaysian DTA are as follows:

i.	to create a favourable climate for both inbound and outbound investments;
ii.	to make Malaysia's special tax incentives fully effective for taxpayers of capital exporting countries;
iii.	to obtain a more effective relief from double taxation compared to relief gained under unilateral measures; and
iv.	to prevent evasion and avoidance of tax

Like many other countries in the developed as well as the developing world, Malaysia too cannot absolve herself from the need to facilitate her trade and investments with the outside world through international tax treaty network with other countries. The increased pace of industrialisation coupled with increased foreign direct investment in the country necessitated tax treaty arrangements with other countries to provide investors with certainty and guarantees in the area of taxation. As at 30 September 2009, the effective DTAs are as follows:

Albania	Ireland	Qatar
Argentina*	Italy	Romania
Australia	Japan	Russia
Austria	Jordan	Saudi Arabia
Bahrain	Korea, Republic	Seychelles
Bangladesh	Kuwait	Singapore
Belgium	Kyrgyz, Republic	South Africa
Canada	Lebanon	South Korea
China	Luxembourg	Spain
Chile	Malta	Sri Lanka
Croatia	Mauritius	Sudan
Czech Republic	Mongolia	Sweden
Denmark	Morocco	Switzerland
Egypt	Myanmar	Syria
Fiji	Namibia	Thailand
Finland	Netherlands	Turkey
France	New Zealand	United Arab Emirates
Germany	Norway	United Kingdom
Hungary	Pakistan	United States of America*
India	Papua New Guinea	Uzbekistan
Indonesia	Philippines	Vietnam
Iran	Poland

* Limited Agreement

Qatar: Income Tax/Withholding Taxes - for year of assessment beginning on or after 1 January 2010 and Petroleum Income Tax - for year of assessment beginning on or after 1 January 2011

In the case of Taiwan (represented by Taipei Economic and Cultural Office in Malaysia) double taxation relief is given by way of the following Income Tax Exemption Order:

i.	P.U.(A) 201 (1998)
ii.	P.U.(A) 202 (1998)

The withholding tax for Interest, Royalties and Fees for Technical Services are reduced to 10%, 10% and 7.5% respectively.

For more information, please visit http://www.hasil.gov.my or email to lhdn_int@hasil.gov.my

Department of International Tax
Inland Revenue Board of Malaysia
3rd Floor, Block 9
Government Office Complex
Jalan Duta
50600 Kuala Lumpur
Malaysia
Tel: (603) 6209 1000, or (603) 6203 2330/2540 (for outside Malaysia)
Fax: (603) 6201 9884

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