07 Dec Double Taxation Agreement Malaysia Hong Kong
As with all double taxation agreements, the DBA`s main objectives are to reduce withholding tax and to prevent double taxation by distributing tax duties between the two countries. Under the CDTA, Hong Kong airlines flying to Malaysia are taxed at the Hong Kong corporate tax rate (which is lower than Malaysia).) The profits from International Shipping carried out by Insaton in Hong Kong and currently taxed in Malaysia and currently taxed there are not taxed in Malaysia under the agreement. In the absence of a CDTA, the profits of Hong Kong companies operating in Malaysia through a stable establishment, for example. B a point of sale, can be taxed in both places if the revenues come from Hong Kong. Under the agreement, double taxation is avoided by granting, subject to the provisions of Hong Kong tax law, any Malaysian tax paid by corporations as a tax credit owed to Hong Kong. In the absence of CDTA, Hong Kong residents who receive interest from Malaysia are subject to the Malaysian withholding tax, which is currently 15%. Under the agreement, such a withholding rate is capped at 10%. The tax rate on sources of interest will be further lowered to 0% if interest is paid or credited to the HKSAR government, the Hong Kong Monetary Authority, etc. The Malaysian withholding tax on royalties, which is currently 10 per cent, is capped at 8 per cent. The Malaysian withholding tax on technical services, which is currently 10%, is capped at 5%.
The Secretary of State for Finance, John C. Tsang, today (25 April) signed an agreement with Malaysia in Kuala Lumpur to avoid double taxation and prevent income tax evasion on behalf of the Hong Kong Special Administrative Region government. Malaysian Finance Minister II, Dato` Seri Ahmad Hosni Mohamad Hanadzlah, signed on behalf of his government. On 25 April, Hong Kong Finance Minister John C. Tsang and Malaysian Finance Minister Ahmad Husni Hanadzlah signed a comprehensive double taxation agreement (CDTA) between Hong Kong and Malaysia in Kuala Lumpur. This is the 24th Comprehensive Double Taxation Prevention Agreement (CDTA) with its trading partners, which was concluded after Belgium, Thailand, mainland China, Luxembourg, Vietnam, Brunei, the Netherlands, Indonesia, Hungary, Kuwait, Austria, the United Kingdom, Ireland, Liechtenstein, France, Japan, New Zealand, Portugal, Spain, the Czech Republic Switzerland, Malta and Jersey.