2012-05-03-KPMG_China-香港与马来西亚签订全面性避免双重征税协定_2页_100kb

Hong Kong-Malaysia Double Taxation Agreement

Background

• Hong Kong signed a comprehensive double taxation agreement (DTA) with Malaysia on April 25, 2012, serving as Hong Kong's 24th such agreement. It will enter into force after ratification by both parties.

Objectives

• Allocates taxing rights between Hong Kong and Malaysia.
• Provides tax certainty for investors engaging in cross-border economic activities.
• Enhances economic and trade ties with Malaysia.

Key Provisions

• Reduced Withholding Taxes:

  • Dividends: Minimum rate of 5% for companies holding at least 10% of the paying company's capital.
  • Interest: Withholding tax reduced to 0% for payments to the Hong Kong SAR Government, Hong Kong Monetary Authority (HKMA), or specified public institutions.
  • Royalties and Technical Fees:
    • Royalties: 10% minimum rate (Malaysia non-treaty rate of 8%, but subject to DTA).
    • Technical Fees: 10% minimum rate (Malaysia non-treaty rate of 5%, but subject to DTA).

• Effective Dates:

  • In Hong Kong: Applicable for tax years starting on or after April 1 following ratification completion.
  • In Malaysia: Applicable for tax years starting on or after January 1 following ratification completion.

• Further Information: For details, refer to Hong Kong Inland Revenue Department or consult the provided contacts.