The UAE and Malaysia started the economic collaboration many years ago, which is why a double taxation agreement was mandatory. The important convention between the UAE and Malaysia was signed in 1995 and entered into force one year later, giving full support on the financial relation between the two countries. If you want to know details about the taxes stipulated in the convention, we suggest you solicit information and legal advice from our lawyers in Dubai.
Taxes covered by the double tax treaty UAE – Malaysia
The purpose of the double taxation convention between the UAE and Malaysia is to avoid the double taxation of incomes and also the fiscal evasion. Besides that, one should know that the taxes on revenues, dividends, interests, capital gains, salaries, and pensions will only be levied once, in the country where the company or the individual is settled. If it is a matter of gains in both countries, these are going to be taxed in accordance with the law of each state. We remind that besides offering details about the double taxation treaty betweenthe UAE and Malaysia, our Dubai lawyers can provide you with legal assistance if you want to open a company in the country and you need to comprehend the taxation system among many others.
The UAE – Malaysia treaty and the reduced tax rates
The tax rate on royalties is settled at 10% and a tax rate of 5% is established on interests, according to the provisions stipulated by the UAE – Malaysia double taxation treaty. If a company in Malaysia pays dividends to a UAE resident, the tax rate is 0%, but if an enterprise established in the UAE pays dividends to a Malaysian company, the levy is settled at 10%. It is good to know that the DTT between the UAE and Malaysia also covers the incomes of air and shipping transportation, where the taxes will the enforced only in the country where the business is registered. The same is available for the revenues derived from the alienation of property or personal services.
Additional information about the double taxation treaty between the UAE and Malaysia can be obtained if you get in touch with our law firm in Dubai.