Find out information on double tax avoidance agreement between Malaysia and Canada
The Government of Canada and the Government of Malaysia wishing to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed on double taxation treaty.
1. This Agreement shall apply to taxes on income imposed on behalf of each Contracting State, irrespective of the manner in which they are levied.
2. The existing taxes to which the Agreement shall apply are:
In the case of Canada: The income taxes imposed by the Government of Canada
In the case of Malaysia: The income tax and excess profit tax; the supplementary income tax, that is, tin profit tax, development tax and timber profits tax; the petroleum income tax.
3. The Agreement shall apply also to any identical or substantially similar taxes on income which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The Contracting States shall notify each other of important changes which have been made in their respective taxation laws.
Business Income or Profits
1. The income or profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on or has carried on business as aforesaid, the income or profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the income or profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.
1. Dividends paid by a company which is a resident of a Contracting State shall be treated as derived from that Contracting State.
2. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other Contracting State.
In Canada the Agreement shall cease to have effect:
a) in respect of tax withheld at the source on amounts paid or credited to non-residents on or after the first day of January in the calendar year next following that in which the notice is given; and
b) in respect of other Canadian tax for taxation years beginning on or after the first day of January in the calendar year next following that in which the notice is given;
In Malaysia, the Agreement shall have effect for the last time as respects Malaysian tax for the year of assessment next following the year in which such notice is given.