Malaysia-UK double taxation treaty was signed in December 1996 and came into force in July 1998.The existing taxes to which this policy will apply are-
For Malaysia – income tax and petroleum tax (referred as Malaysia Tax)
For UK – income tax, corporation tax, and capital gains tax (referred as UK Tax)
This policy will apply also to any identical taxes that are levied after the date of signature of this policy in addition to, or in place of the existing taxes. The authorities of the Contracting States inform each other of any important changes that have been made in their respective taxation laws within a reasonable period of time after such changes.
Residence
1) For the purposes of this Agreement, the term "resident of a Contracting State" means:
a) In the case of Malaysia, a person who is resident in Malaysia for the purposes of Malaysian tax; and
b) In the case of the United Kingdom a person who is resident in the United Kingdom for the purposes of United Kingdom tax.
Business Profits
1) The profits of an enterprise of a Contracting State 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 profits of the enterprise may be taxed in the other State but only so much thereof as is attributable to that permanent establishment.
2) Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the 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.
