With regard to the elimination of double taxation, India applies a deduction, while Malaysia would use a credit method. Both countries also offer a tax-saving credit. In addition to a mechanism for the exchange of banking information for the tax administration, the new agreement also contains a limitation clause on benefits, a provision to combat abuse. This is provided for in the new double taxation agreement between India and Malaysia (DBAA), which entered into force on 26 December. Previously, this facility did not exist, which led to double taxation. The new agreement also introduced, in line with international practice, a new article on the taxation of capital gains on the sale of property. The new agreement, signed in May, will enter into force in India from 1 April. In the case of Malaysia, it entered into force on 1 January. The concept of service establishment was also introduced with a threshold of 90 days over a twelve-month period. On April 1, dividends paid by Indian companies to Malaysian investors or companies will attract a 5 percent lower withholding tax compared to 10 percent earlier. Simply put, when an Indian transfer pricing officer makes a transfer pricing adjustment to an Indian subsidiary of a Malaysian company, an adjustment by the Malaysian authorities can be made to the Malaysian company`s accounts. Details of the India-Malaysia Income Tax Agreement and Protocol, signed on 9 May 2012, are available.
The contract was concluded in Hindi, Malay and English, all texts being equally authentic. However, in the event of a discrepancy, the English text shall prevail. The treaty generally follows the OECD model. . SUMMARY TEXT OF THE MULTILATERAL AGREEMENT ON THE IMPLEMENTATION OF FISCAL MEASURES TO PREVENT PROFIT REDUCTION AND PROFIT SHIFTING (MLI) AND THE AGREEMENT BETWEEN THE GOVERNMENT AGREEMENT ON THE PREVENTION OF DOUBLE TAXATION AND THE PREVENTION OF TAX EVASION WITH ALBANIA THE GOVERNMENT OF THE REPUBLIC OF INDIA ON TAXES ON INCOME AND CAPITAL *** Malaysia has also concluded an air transport agreement with Saudi Arabia Saudi….