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Double Taxation Agreement Between Malaysia and Australia

The Government of Australia 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.
Taxes Covered
The existing taxes to which this Agreement shall apply are:
a)In Australia: the Australian income tax, including the additional tax upon the undistributed amount of the distributable income of a private company;
b) In Malaysia: income tax and excess profit tax; supplementary income taxes, that  is, tin profits tax, development tax and timber profits tax; and petroleum income tax. 
  • This Agreement shall also apply to any identical or substantially similar
  • taxes which are imposed by either Contracting State after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authority of each Contracting State shall notify the competent authority of the other Contracting State of any significant changes which have been made in the laws of its Contracting State relating to the taxes to which this Agreement applies. 
Business Profits
  • The income or profits of an enterprise of one of the Contracting States 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 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.
  • In the determination of the income or profits of a permanent establishment, there shall be allowed as deductions expenses of the enterprise, being expenses (including executive and general administrative expenses) which are reasonably connected with the permanent establishment and which would be deductible if the permanent establishment were an independent entity that incurred those expenses, whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere.
  • No income or profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
This Agreement shall continue in effect indefinitely, but the Government of Australia or the Government of Malaysia may on or before 30 June in any calendar year after the year 1982 give to the other Government through the diplomatic channel written notice of termination and, in that event this Agreement shall cease to be effective:
a) In Australia:
(I) In respect of withholding tax on income that is derived by a non-resident, in respect of income derived on or after 1 July in the calendar year next following that in which the notice of termination is given. 
(II) In respect of other Australian tax, for any year of income beginning on or after 1 July in the calendar year next following that in which the notice of termination is given.
b) In Malaysia: in respect of Malaysian tax, for the year of assessment beginning on 1 January in the second calendar year next following that in which the notice of termination is given, and subsequent years of assessment.

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