Double Tax Treaty Malaysia – Canada

Updated on Sunday 25th March 2018

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Malaysia and Canada have signed a treaty for the avoidance of double taxation in 1976. The agreement was modified several times since then, and, in 2013, the representatives of the two states have signed a declaration of intent for a new tax treaty. The treaty covers a set of taxes and Canadian investors who want to open a company in Malaysia can directly benefit from the provisions of the agreement
The treaty for the avoidance of double taxation covers the manner in which profits whill be taxed on the territory of the two contracting states, as well as the taxation of dividends deriving from the activities of Canadian and Malaysian businesses. Our team of specialists in company formation in Malaysia can assist with information on the provisions of the treaty

Taxes covered by the Malaysia – Canada treaty 

The taxes included in the treaty are similar for both countries, but several differences can appear due to the applicable tax legislation available in each country. 
As per Article 2 of the treaty, Malaysia will impose the following taxes:
the income tax and the excess profit tax;
the supplementary income tax
the petroleum income tax
The supplementary income tax in Malaysia is comprised of the following: 
tin profit tax;
development tax;
timber profits tax.
Canada will apply the income taxes imposed by the Canadian government. If the legislation on the taxation applied by a country is modified, both parties are required to inform the other contracting state by the changes brought in the national legislation, as specified by the Article 3 of the agreement. Our team of consultants in company registration in Malaysia can provide further details on this matter. 

Tax regulations under the Malaysia – Canada agreement 

As a general rule, a Canadian company operating in Malaysia will be taxed in Canada for its profits. However, if the company operates in Malaysia through a permanent establishment, the company will be taxed in this country. This will be applied only for the profits obtained through the permanent establishment, which can be a branch, an office, a factory, a plantation or quarry site and other similar establishments, operating in Malaysia for at least 6 months on a continuous basis
Investors are invited to contact our team of representatives for consultancy services regarding the taxation regulations available under this treaty