Below is the list of countries with which Malaysia has concluded a double taxation agreement (DTT): in 2010, an additional clause was added to the Labuan Offshore Business Business Tax Act, which will allow the island to adopt the internationally adopted standard by the Organisation for Economic Co-operation and Development for the exchange of information for tax purposes in double taxation treaties (ASA). Here are some of the countries that have double taxation treaties with Malaysia (some other agreements have been signed and are awaiting ratification): in the search for foreign investment, Malaysia has signed numerous double taxation treaties, of which more than 60 are in force, most often with low withholding tax rates on payments made. Below are the details of some of these contracts. Several other contracts are under negotiation. The Director General of the Tax Authority has the power to request information from any person he needs to comply with the DTAs received by the Malaysian government. It authorizes the disclosure of information about a DBA to any authorized government official with whom the Malaysian government has entered into such an agreement and at the request of a tax office of a non-Malaysian government. * Limited to the taxation of air and sea transport in international transport. The Korean tax authorities believed that many of the companies they accused of avoiding capital gains tax did so through registered offices in Labuan. There are no purchasing rules contrary to the treaties. A taxpayer is allowed to claim foreign tax credits against Malaysian tax. Where an agreement exists, the available credit is the total amount of foreign tax paid or Malaysian tax collected, whichever is lower. In the absence of a tax treaty, the available credit is limited to half of the foreign tax paid. Although Labuan, as part of the Malaysian state, benefits from the country`s tax treaties, which were signed for the most part before the existence of Labuan`s offshore regime, some countries have specific or general anti-avoidance laws that exclude Labuan offshore companies from contractual benefits.
In many cases, Malaysian tax treaties contain „tax saving“ provisions where a dividend paid on tax-exempt profits under Malaysian tax incentive schemes is considered to be paid on taxable profits. This allows the beneficiary to claim a tax credit on the exempt dividend in their home country. All Malaysian tax treaties follow the OECD Model Agreement, with some modifications; However, the U.S. Treaty only provides for a mutual exception for international shipping and air transport companies. . . .