The Government of Malaysia and the Government of India have entered into an agreement to avoid double taxation and to prevent fiscal evasion with respect to taxes on income.
Taxes covered
1. The taxes which are the subject of this Agreement are:
(a) In Malaysia:
(i) The income tax
(ii) The supplementary income-tax, that is, tin profits tax, development tax and timber profits tax; and
(iii) The petroleum income-tax;
(b) In India:
(i) The income-tax and any surcharge on income-tax imposed under the Income-tax Act, 1961 (43 of 1961);
(ii) The surtax imposed under Companies (Profits) surtax Act, 1964 (7 of 1964).
2. The Agreement shall also apply to any other taxes of a substantially similar character to those referred to in the preceding paragraph imposed in either Contracting State after the date of signature of this Agreement.
3. At the end of each year, the competent authorities of the Contracting States shall notify to each other any significant changes which have been made in their respective taxation laws.
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 through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, tax may be imposed in that other Contracting State on the income or profit of the enterprise but only on so much of that income or profit as is attributable to that permanent establishment.
2. Where an enterprise of one of the Contracting States carries on business in the other Contracting State through a permanent establishment situated therein, there shall be 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.
Dividends
1. 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 the first-mentioned Contracting State.
Termination
In India:
As respects Indian tax for the year of assessment commencing on the 1st day of April of the calendar year next following the calendar year in which such notice is given and subsequent years of assessment.
In Malaysia:
As respects Malaysia tax for the year of assessment next following the calendar year in which such notice is given and subsequent years of assessment.
As respects Malaysia tax for the year of assessment next following the calendar year in which such notice is given and subsequent years of assessment.
