TaxTMI 
TaxTMI 
Double taxation and the prevention of fiscal evasion between Government of India and the Government of Malaysia
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.... 1964 (7 of 1964), the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India. ANNEXURE Agreement between the Government of India and the Government of Malaysia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income The Government of India and the Government of Malaysia, Desiring to conclude an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, Have agreed as follows: CHAPTER I Scope of the Agreement Article 1 PERSONAL SCOPE This agreement shall apply to persons who are residen....
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.... assigned to it in the taxation laws in force in the respective Contracting States; (g) the terms " Malaysian enterprise " and " Indian enterprise " mean respectively an enterprise carried on by a resident of Malaysia and an enterprise carried on by a resident of India; (h) the terms " enterprise of one of the Contracting States " and " enterprise of the other Contracting State " mean a Malaysian enterprise or an Indian enterprise, as the context requires; (i) the term " competent authority " means, in the case of Malaysia, the Minister of Finance or his authorised representative; and in the case of India, the Central Government in the Ministry of Finance (Department of Revenue and Insurance). 2. In the application of this Agreement by one of the Contracting States any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Agreement. Article 4 FISCAL DOMICILE 1. In this Agreement, unless the context otherwise requires:- (a) the term " resident of Malaysia " means- (i) an individual who is ordinarily resident in Malay....
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....y or other place of extraction of natural resources; (h) a building site or construction, installation or assembly project which exists for more than six months; (i) a farm or plantation; (j) a place of extraction of timber or forest produce. 3. The term " permanent establishment " shall not be deemed to include: (a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; (d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or collecting information for the enterprise; (e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character for the enterprise. 4. An enterprise of one of the Contracting State....
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....vable property " shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, oil wells, quarries and other places of extraction of natural resources or of timber or forest produce. Ships, boats and aircraft shall not be regarded as immovable property. 3. The provisions of paragraph 1 of this Article shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4. The provisions of paragraph 1 and 3 of this Article shall also apply to the income from immovable property of an enterprise. Article 7 BUSINESS PROFITS 1. The income or profits of an enterprise of one of the Contracting States shall be taxable only in that Contracting State, unless the enterprise carries on business in the other Contracting State thro....
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....y be taxed in that other Contracting State, but the tax chargeable in that Contracting State on such income shall be reduced by an amount equal to fifty per cent. of such tax. 2. For the purposes of paragraph 1 of this Article income derived from the other Contracting State shall mean income from the carriage of passengers, mail, livestock or goods shipped in that other Contracting State: Provided that there shall be excluded the income accruing from the carriage of passengers, mail, livestock or goods which are brought to that other Contracting State solely for transhipment or for transfer from an aircraft to a ship or from a ship to another ship. 3. Where income from the operation of ships in international traffic is derived by an enterprise of one of the Contracting States from a State other than the Contracting States, such income shall be taxable only in the Contracting State of which the enterprise is a resident. 4. The provisions of paragraphs 1, 2 and 3 of this Article shall likewise apply to income arising from participation in shipping pools of any kind by such enterprise engaged in shipping operations. Article 9 AIR TRANSPORT 1. Income of an enterpri....
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....e Government of the Republic of Singapore for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed in Singapore on 26th December, 1968, the dividend shall be deemed to have been paid by a company resident in Malaysia. 3. Where a dividend was paid by a company which was resident in both Malaysia and Singapore and the meeting at which the dividend was declared was held in Singapore, or where a dividend was paid by a company which was resident in Malaysia and at the time of payment of that dividend, the company declared itself to be a resident of Singapore for the purposes of Article VII of the agreement between the Government of Malaysia and the Government of the Republic of Singapore for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed in Singapore on 26th December, 1968, the dividend shall be deemed to have been paid by a company not resident in Malaysia. 4. Nothing in this Article shall affect the provisions of the law in Malaysia under which the tax in respect of a dividend paid by a company resident in Malaysia from which Malaysian tax has been, or has been d....
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.... by the taxation law of the State in which the income arises. Article 13 ROYALTIES 1. Royalties derived by a resident of one of the Contracting States from the other Contracting State may be taxed in that other Contracting State. 2. Notwithstanding the provisions of paragraph 1 of this Article, royalties of the kind mentioned in clauses (a) and (b) of paragraph 5 of this Article and derived from Malaysia by a resident of India shall be exempt from tax in Malaysia, if the agreement under which such royalties are payable is approved by the Government of Malaysia after this Agreement is signed. 3. Royalties shall be deemed to be derived from a Contracting State if the payer is the Government, a State Government, a political sub-division, a local authority or a resident of that Contracting State. Where, however, the payer has in the other Contracting State a permanent establishment with which the right or property giving rise to the royalties is effectively connected, then, such royalties shall be deemed to be derived from the Contracting State in which the permanent establishment is situated. In such a case, the provisions of Article 7 shall apply. 4. Where, owing to....
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....fits of an enterprise chargeable to Indian tax. 3. Notwithstanding the provisions of paragraph 1 of this Article, an individual who is a resident of India shall be exempt from tax in Malaysia on remuneration in respect of an employment exercised in any basis year for a year of assessment in Malaysia, if- (a) he is present in Malaysia for a period or periods not exceeding in the aggregate 183 days during that basis year; and (b) any period for which he is present within Malaysia does not form part of a continuous period of more than 183 days throughout which he is present within Malaysia; and (c) the remuneration is paid by or on behalf of an employer who is not a resident of Malaysia; and (d) the amount of remuneration is not deductible in computing the income or profits of an enterprise chargeable to Malaysia tax. 4. Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft engaged in international traffic and operated by an enterprise of one of the Contracting States may be taxed in that Contracting State. 5. In relation to remuneration of a director of a company derived from the com....
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.... connection with any business carried on by the Government of either of the Contracting States for the purposes of profit. 5. For the purposes of this Article, the term " Government " shall include any State Government or local or statutory authority of either Contracting State and in particular the Bank Negara Malaysia and the Reserve Bank of India. Article 19 STUDENTS AND APPRENTICES 1. An individual who is a resident of one of the Contracting States and who visits the other Contracting State solely as a student at a recognised university, college, school or other similar recognised educational institution in that other Contracting State or as a business or technical apprentice therein, for a period not exceeding five years from the date of his first arrival in that other Contracting State in connection with that visit, shall be exempt from tax in that other Contracting State on- (a) all remittances from abroad for the purposes of his maintenance, education or training; and (b) any remuneration (not exceeding 3,000 Malaysian Dollars or 7,500 Indian Rupees during any basis year or previous year, as the case may be, for any year of assessment) for personal service....
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.... Contracting State in the basis year or the previous year, as the case may be, in which he visits the other Contracting State or in the immediately preceding basis year or the previous year. Article 20 PROFESSORS, TEACHERS AND RESEARCHERS 1. An individual who is a resident of one of the Contracting States and who, at the invitation of the Government of the other Contracting State or of a university or other recognised educational institution situated in that other Contracting State, visits that other Contracting State for the primary purpose of teaching or engaging in research or both, at a university or other recognised educational institution shall be exempt from tax in that other Contracting State on his income from personal services for teaching or research or both at the university or the recognised educational institution, for a period not exceeding two years from the date of his arrival in that other Contracting State. 2. This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. Article 21 INCOME OF GOVERNMENT AND INSTITUTIONS 1. The Government of one of the Cont....
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....n to the existing measures: Provided an agreement is made between the two Contracting States in respect of the scope of the benefit accorded by the said measures. 3. (a) The amount of Indian tax payable, under the laws of India and in accordance with the provisions of this Agreement, whether directly or by deduction, by a resident of Malaysia, in respect of income from sources within India which has been subjected to tax both in India and Malaysia, shall be allowed as a credit against Malaysian tax payable in respect of such income, but in an amount not exceeding that proportion of Malaysian tax which such income bears to the entire income chargeable to Malaysian tax. (b) For the purposes of the credit referred to in sub-paragraph (a) above, there shall be deemed to have been paid by the resident of Malaysia the amount which would have been paid if the Indian tax had not been reduced or relieved in accordance with the special incentive measures designed to promote economic development in India- (i) in relation to royalties, as set forth in the relevant annual Finance Act of India; and (ii) in relation to other income as set forth in the following sections of the Inco....
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....rposes which are by law available only to citizens of that first-mentioned Contracting State and to such other persons as may be specified in such law who are not resident in that first-mentioned Contracting State. 2. The taxation on a permanent establishment which an enterprise of one of the Contracting States has in the other Contracting State shall not be less favourably levied in that other Contracting State than the taxation levied on enterprises of that other Contracting State carrying on the same activities in the same circumstances and under the same conditions. 3. Enterprises of one of the Contracting States, the capital of which is wholly or partly owned or controlled, directly or indirectly by one or more residents of the other Contracting State, shall not be subjected in the first mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned Contracting State are or may be subjected in the same circumstances and under the same conditions. 4. In this Article, the term " citizens or nationals " in relation ....
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....ocuments which shall be furnished on a routine basis. 3. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: (a) to carry out administrative measures at variance with the laws of administrative practice of that or of the other Contracting State; (b) to supply information or documents which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; (c) to supply information or documents which would disclose any trade, business, industrial, commercial or professional secret or trade process or information the disclosure of which would be contrary to public policy. DIPLOMATIC AND CONSULAR OFFICIALS Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements. CHAPTER VI Final Provisions Article 27 ENTRY INTO FORCE 1. This Agreement shall come into force on the date when the last of all such things shall have been done in Malaysia and India as are necessary to give the Agreement the force of law in Mala....
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....sp; PROTOCOL At the time of signing the Agreement between the Government of India and the Government of Ma....