Double Taxation Agreements Malaysia

Singapore added Malaysia to its list of double taxation conventions in 1968. The agreement was amended in 2004; These changes came into effect in 2007, both for Singapore and Malaysia. This agreement has made a significant contribution to improving trade and investment between Singapore and Malaysia. The DBA is a comprehensive document that deals with revenues from different types of sources such as corporate profits, personal income, shipping, aviation and road transport, etc. The approach to avoid double taxation of savings income is similar to the one described above with respect to dividend income. Interest is taxed in the country where the beneficiary resides, i.e. country B. The DBA imposes double taxation when income is taxed in the two contracting states. In the case of Malaysia, Singapore tax due on Singapore`s income can be considered a credit in relation to Malaysian tax payable for those incomes. The Malaysian tax due on Malaysian income is accepted as a tax credit payable for these incomes in Singapore. The credit thus granted must not exceed the tax calculated before the transfer of credit by the country concerned.

For the calculation of solvency, the tax payable does not take into account the specific exemptions, exemptions or subsidies granted by the respective jurisdictions and takes into account the taxable tax payable in the absence of such exemptions and reductions. In the case of dividends paid by a Singaporean company to a Malaysian company or a resident company holding at least 10% of the voting rights in the paying company, Malaysia takes into account the Singapore tax payable by that company for its income on which the dividend is paid, but the credit must not exceed the portion of the Malaysian tax. , as calculated before credit was granted. Accordingly, in the case of a Singapore beneficiary, a credit equal to the Malaysian tax that the company must pay for its income for which the dividend is paid is taken into account. In any case, if you want any support on all tax-related issues in Malaysia, we will respond to Paul Hype Page and Co to meet your needs in such areas.