THE SCHEDULE
Agreement Between the Government of the
Republic of Singapore and the Government
of Malaysia for the Avoidance of Double
Taxation and the Prevention of Fiscal
Evasion With Respect to Taxes on Income
The Government of the Republic of Singapore and the Government of Malaysia,
Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,
Have agreed as follows:
Article I
1. The taxes which are the subject of this Agreement are —
(a)
in Singapore:
the income tax (hereinafter referred to as “Singapore tax”); and
(b)
in Malaysia:
(ii)
the tin profits tax, and
(iii)
the development tax (hereinafter referred to as “Malaysian tax”).
2. This Agreement shall also apply to any other taxes of a substantially similar character to those referred to in the preceding paragraph imposed in Singapore or Malaysia after the date of signature of this Agreement.
3. The provisions of this Agreement in respect of the taxation of income or profits shall likewise apply to the development tax computed other than on the basis of income.
Article II
1. In this Agreement, unless the context otherwise requires —
(a)
the term “Singapore” means the Republic of Singapore;
(b)
the term “Malaysia” means the Federation of Malaysia;
(c)
the terms “one of the Contracting States” and “the other Contracting State” mean Singapore or Malaysia, as the context requires;
(d)
the term “tax” means Singapore tax or Malaysian tax, as the context requires;
(e)
the term “company” means a body corporate or any entity which is treated as a body corporate for tax purposes;
(f)
the term “individual” means a natural person;
(g)
the term “person” includes an individual, a company, a body of persons, a Hindu joint family and a corporation sole;
(h)
(i)
the term “resident of Singapore” in relation to a year of assessment means any person who is resident in Singapore for that year of assessment for the purposes of Singapore tax; and a company shall be deemed to be a resident of Singapore if it is managed and controlled in Singapore;
(ii)
the term “resident of Malaysia” in relation to a year of assessment means any person who is ordinarily resident in Malaysia for the basis year for that year of assessment for the purposes of Malaysian tax:
Provided that —
(aa)
for the purposes of this Agreement references to 30 days in section 7(1)(c) of the Malaysian Income Tax Act, 1967 shall be read as references to 90 days;
(bb)
an individual who is a resident of Singapore shall not be deemed to be ordinarily resident in Malaysia for the basis year 1968;
(cc)
an individual who is a resident of Singapore shall not be deemed to be ordinarily resident in Malaysia for the basis year 1969 solely by the application of the provisions of section 7(1)(b) of the Malaysian Income Tax Act, 1967;
(dd)
in calculating the number of days an individual is in Malaysia under the provisions of section 7(1)(c) of the Malaysian Income Tax Act, 1967, any day that he is in Malaysia solely for the purpose of medical treatment, vacation or recreation shall be disregarded if that individual has no source of income other than dividend or interest derived from Malaysia, and in the case of a person who derives income from any source any period of hospitalisation shall not be taken into account;
(iii)
a company shall be deemed to be a resident of Malaysia for the basis year for a year of assessment if its business, or if more than one, any of its businesses is controlled and managed in Malaysia in that basis year:
Provided that a company which is a resident of Singapore shall not be treated as a resident of Malaysia for the basis year or basis years which coincide with the Singapore year of assessment 1968 or year of assessment 1969;
(i)
the terms “resident of one of the Contracting States” and “resident of the other Contracting State” mean a resident of Singapore or a resident of Malaysia, as the context requires;
(j)
the terms “Singapore enterprise” and “Malaysian enterprise” mean respectively an industrial, mining, commercial, timber, plantation or agricultural enterprise or undertaking carried on by a resident of Singapore, and an industrial, mining, commercial, timber, plantation or agricultural enterprise or undertaking carried on by a resident of Malaysia;
(k)
the terms “enterprise of one of the Contracting States” and “enterprise of the other Contracting State” mean a Singapore enterprise or a Malaysian enterprise, as the context requires;
(l)
the terms “income or profits of a Singapore enterprise” and “income or profits of a Malaysian enterprise” do not include rents or royalties in respect of literary or artistic copyrights, motion picture films or of tapes for television or broadcasting or of mines, oil wells, quarries, or other places of extraction of natural resources or of timber or forest produce, or income in the form of dividends, interest, rents, royalties or fees or other remuneration derived from the management, control or supervision of the trade, business or other activity of another enterprise or concern or remuneration for labour or personal services or income derived from the operation of ships or aircraft;
(m)
(i)
subject to this sub-paragraph, the term “permanent establishment” means a fixed place of business in which the business of the enterprise is wholly or partly carried on;
(ii)
a permanent establishment shall include especially —
(aa)
a place of management;
(ff)
a mine, oil well, quarry or other place of extraction of natural resources;
(gg)
a building site or installation or construction or assembly project;
(hh)
a farm or plantation;
(ii)
a place of extraction of timber or forest produce;
(iii)
the term “permanent establishment” shall not be deemed to include —
(aa)
the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
(bb)
the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;
(cc)
the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
(dd)
the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;
(ee)
the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise;
(iv)
an enterprise of one of the Contracting States shall be deemed to have a permanent establishment in the other Contracting State if it carries on supervisory activities in that other Contracting State in connection with a construction, installation or assembly project which is being undertaken in that other Contracting State;
(v)
a person acting in one of the Contracting States on behalf of an enterprise of the other Contracting State (other than an agent of independent status to whom sub-paragraph (
m)(vi) applies) shall be deemed to be a permanent establishment of that enterprise in the first-mentioned Contracting State if —
(aa)
he has, and habitually exercises in that first-mentioned Contracting State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; or
(bb)
he maintains in the first-mentioned Contracting State a stock of goods or merchandise belonging to the enterprise from which he regularly fills orders on behalf of the enterprise;
(vi)
an enterprise of one of the Contracting States shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that Contracting State through a broker, general commission agent or any other agent of independent status where such a person is acting in the ordinary course of the business;
(vii)
the fact that a company which is a resident of one of the Contracting States controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other Contracting State (whether through a permanent establishment or otherwise) shall not of itself constitute either company a permanent establishment of the other;
(n)
the term “competent authorities” means, in the case of Singapore, the Minister for Finance or his authorised representative; and in the case of Malaysia, the Federal Minister of Finance or his authorised representative.
2. In the application of this Agreement by one of the Contracting States, any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Agreement.
Article III
Where this Agreement provides (with or without other conditions) that income from sources in one of the Contracting States shall be exempted from tax, or taxed at a reduced rate, by that Contracting State if it is subject to tax in the other Contracting State, and under the law in force in that other Contracting State the said income is subject to tax by reference to the amount thereof which is remitted to, or received in, that other Contracting State and not by reference to the full amount thereof, then the exemption or reduction of tax to be allowed under this Agreement in the former Contracting State shall apply only to so much of the income as is remitted to or received in the other Contracting State.
Article IV
1.—
(
a) The income or profits of a Singapore enterprise shall not be taxable in Malaysia unless the enterprise carries on business in Malaysia through a permanent establishment situated in Malaysia. If the enterprise carries on business as aforesaid, tax may be imposed in Malaysia on the income or profits of the enterprise but only on so much thereof as is derived by that permanent establishment in Malaysia.
(b) The income or profits of a Malaysian enterprise shall not be taxable in Singapore unless the enterprise carries on business in Singapore through a permanent establishment situated in Singapore. If the enterprise carries on business as aforesaid, tax may be imposed in Singapore on the income or profits of the enterprise but only on so much thereof as is attributable to that permanent establishment in Singapore.
2. Where an enterprise of one of the Contracting States 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 independently with the enterprise of which it is a permanent establishment.
3. In determining the income or profits of a permanent establishment, there shall be allowed as deductions all expenses including executive and general administrative expenses, which would be deductible if the permanent establishment were an independent enterprise in so far as they are reasonably allocable to the permanent establishment, whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere.
4. No income or profits shall be derived by or attributed to a permanent establishment by reason of the mere purchase and transportation by that permanent establishment of goods or merchandise for the enterprise.
Article V
Where —
(a)
an enterprise of one of the Contracting States participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or
(b)
the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the Contracting States and an enterprise of the other Contracting State,
and in either case, conditions are made or imposed between the two enterprises, in their commercial or financial relations, which differ from those which would be made between independent enterprises, any income or profits which would but for those conditions have accrued to one of the enterprises, but by reason of those conditions have not so accrued, may be included in the income or profits of that enterprise and taxed accordingly.
Article VI
1. Notwithstanding the provisions of Article IV of this Agreement the income or profits of an enterprise of one of the Contracting States from the operation of ships or aircraft in international traffic may be taxed in the other Contracting State only if such income or profits are derived from that other Contracting State:
Provided that —
(a)
where a Singapore enterprise derives income or profits from Malaysia from such operations, the tax charged in Malaysia on such income or profits shall be reduced by an amount equal to fifty per cent thereof;
(b)
where a Malaysian enterprise derives income or profits from Singapore from such operations, the tax charged in Singapore on such income or profits shall be reduced by an amount equal to fifty per cent thereof.
2. The provisions of paragraph 1 shall likewise apply to income or profits arising from participation in shipping or aircraft pools of any kind by such enterprise engaged in shipping or air transport.
3. For the purposes of this Article income or profits derived from the other Contracting State shall mean income or profits from the carriage of passengers, mails, livestock or goods shipped or loaded into an aircraft in that other Contracting State:
Provided that there shall be excluded the income or profits accruing from passengers, mails, livestock or goods which are brought to that other Contracting State solely for transhipment, or for transfer from one aircraft to another or from an aircraft to a ship or from a ship to an aircraft.
Article VII
1. Dividends paid by a company which is a resident of one of the Contracting States shall be treated as derived from that Contracting State.
2. Where a company which is a resident of Malaysia for the basis year for a year of assessment for the purposes of Malaysian tax is also a resident of Singapore for the purposes of Singapore tax for the year of assessment which coincides with that basis year, a dividend paid by the company shall be deemed to be derived from the Contracting State in which the meeting at which the dividend was declared was held.
3. For the purpose of this Article only, a company which is a resident of one of the Contracting States may when paying a dividend declare itself to be a resident of the other Contracting State.
4. Where a dividend is derived or deemed to have been derived from one of the Contracting States in accordance with the provisions of this Article, the Contracting State in which the dividend is derived or deemed to have been derived shall allow to the recipient of such dividend a tax set-off under section 46 of the Income Tax Ordinance (Singapore) or section 110 of the Income Tax Act, 1967 (Malaysia) as the case may be, equal to the tax which would have been deducted from such dividend under the provisions of section 44 of the Income Tax Ordinance (Singapore) or section 108 of the Income Tax Act, 1967 (Malaysia) as the case may be, had the dividend been paid by a company resident in that Contracting State.
5. Nothing in this Article shall affect the provisions of the law of either Contracting State in which the tax in respect of a dividend paid by a company resident in either Contracting State has been, or has been deemed to be, deducted may be adjusted by reference to the rate of tax appropriate to the year of assessment immediately following that in which the dividend was paid.
6. Where a company which is a resident of one of the Contracting States derives income or profits from sources within the other Contracting State, there shall not be imposed in that other Contracting State any form of taxation on dividends paid by the company to persons not resident in that other Contracting State or any tax in the nature of an undistributed profits tax on the undistributed profits of the company, whether or not those dividends represent, in whole or in part, income or profits so derived.
7. The provisions of paragraphs 1, 2 and 3 shall not apply if the recipient of the dividends, being a resident of one of the Contracting States, has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment with which the holding by virtue of which the dividends are paid is effectively connected. In such a case Article IV shall apply.
8. If the system of taxation applicable in either Contracting State to the income and distributions of companies is altered, the taxation authorities may consult each other in order to determine whether it is necessary for this reason to amend the provisions of this Article.
Article VIII
1. Royalties derived from sources within one of the Contracting States by a resident of the other Contracting State may be taxed in the Contracting State from which the royalties are derived.
2. The term “royalties” as used in this Article means payments of any kind received as consideration for the use of, or the right to use, any copyright, patent, trademark, design or model, plan, secret formula or process or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience, but does not include any royalty or other amount paid in respect of literary or artistic copyrights or of motion picture films or of tapes for television or broadcasting or of the operations of a mine, oil well, quarry or other place of extraction of natural resources or of timber or forest produce.
3. Sums derived by a resident of one of the Contracting States from sources within the other Contracting State from the alienation of any right or property from which royalties, as defined in paragraph 2 of this Article, are or may be derived, may be taxed in the Contracting State from which the sums are derived.
4. The provisions of paragraphs 1 and 3 of this Article shall not apply if the recipient of the royalties or sums, being a resident of one of the Contracting States, has in the other Contracting State from which the royalties or sums are derived, a permanent establishment with which the right or property giving rise to the royalties or sums is effectively connected. In such event, the provisions of Article IV shall apply.
5. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of royalties or sums paid, having regard to the use, right, property or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.
6. Royalties as defined in paragraph 2 of this Article shall be treated as derived from sources within the Contracting State in which the property from which such royalties are derived is used.
7. Sums derived from the alienation of any right or property referred to in paragraph 3 of this Article shall be treated as derived from sources within the Contracting State in which such right or property is used.
Article IX
1. Income from immovable property may be taxed in the Contracting State in which such property is situated.
2. The term “immovable property” shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall in any case include rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, oil wells, quarries or other places of extraction of natural resources or of timber or forest produce.
3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting or use in any other form of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise.
Article X
1. Remuneration other than a pension paid by the Government of one of the Contracting States to an individual who is a citizen of that Contracting State and who is subject to tax therein in respect of the services rendered in the discharge of governmental functions in the other Contracting State shall be exempt from tax in that other Contracting State.
2. This Article shall not apply to any remuneration in respect of services rendered in connection with any trade or business carried on for purposes of profit:
Provided that nothing in this paragraph shall affect the right of the Governments of the Contracting States mutually agreeing that any activity shall be deemed to be not carried on for the purposes of profit.
3. Any remuneration to which this Article applies shall be deemed to be income from a source within the Contracting State the Government of which pays the remuneration.
4. For the purposes of this Article, the word “Government” shall include any State Government, or local or statutory authority of either Contracting State.
Article XI
1. Subject to the provisions of this Article and Articles X, XII, XIII and XIV, salaries, wages and other similar remuneration derived by a resident of one of the Contracting States in respect of an employment shall be deemed to have been derived from a source in, and may be taxed in the other Contracting State if the employment is exercised in that other Contracting State.
2. In relation to remuneration of a director of a company from the company, this Article and Article XII shall apply as if the remuneration were remuneration of an employee in respect of an employment. Director’s fees and similar payments derived by a resident of one of the Contracting States in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State shall be deemed to have been derived from an employment exercised in, and may be taxed in, that other Contracting State.
Article XII
1. An individual who is a resident of Singapore shall be exempt from Malaysian tax on income in respect of an employment exercised in Malaysia in the basis year for a year of assessment which coincides with a year of assessment for which he is a resident of Singapore, if —
(a)
he is present within Malaysia for a period or periods not exceeding in the aggregate 120 days during that basis year;
(b)
the services are performed for or on behalf of a person who is a resident of Singapore;
(c)
the income is subject to Singapore tax; and
(d)
the income is not directly deductible for Malaysian tax purposes from the income or profits of a permanent establishment in Malaysia of that person.
2. An individual who is a resident of Malaysia shall be exempt from Singapore tax on income in respect of an employment exercised in Singapore in a year of assessment which coincides with the basis year for a year of assessment for which he is a resident of Malaysia, if —
(a)
he is present within Singapore for a period or periods not exceeding in the aggregate 120 days during that year of assessment;
(b)
the services are performed for or on behalf of a person who is a resident of Malaysia;
(c)
the income is subject to Malaysian tax; and
(d)
the income is not directly deductible for Singapore tax purposes from the income or profits of a permanent establishment in Singapore of that person.
3. The provisions of this Article shall apply to the remuneration or profits derived from sources within one of the Contracting States by public entertainers (such as stage, motion picture, radio or television artistes, musicians and athletes) only if the visit to that Contracting State is supported, wholly or substantially, from the public funds of the Government of the other Contracting State.
4. Notwithstanding anything contained in this Agreement, while services are provided in one of the Contracting States by an enterprise of the other Contracting State, then the profits derived from providing those services by such an enterprise may be taxed in the first-mentioned Contracting State unless the enterprise is substantially supported by the public funds of the Government of the other Contracting State in connection with the provision of such services.
5. For the purposes of this Article, the term “Government” has the same meaning as in paragraph 5 of Article X.
6. For the purposes of this Article, income or profits to which this Article applies shall be treated as derived from sources within the Contracting State in which the services are rendered.
Article XIII
1. Any pension or annuity derived by an individual who is a resident of one of the Contracting States from sources within the other Contracting State may be taxed in the first-mentioned Contracting State.
2. The term “annuity” means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money’s worth.
3. The term “pension” means periodical payments made, whether voluntarily or otherwise, in consideration for services rendered or by way of compensation for injuries received.
4. Any pension paid by the Government of one of the Contracting States shall be deemed to be derived from a source within that Contracting State. Any other pension shall be deemed to be derived from a source within the Contracting State of which the person paying the pension is a resident.
Article XIV
1. An individual who is a resident of one of the Contracting States immediately before making a visit to the other Contracting State and is temporarily present in the other Contracting State solely as a student at a recognised university, college, school or other similar recognised educational institution in that other Contracting State or as an approved business or technical apprentice therein, for a period not exceeding two years (or such further period as may be approved) from the date of his first arrival in that other Contracting State in connection with that visit, shall be exempt from tax in that other Contracting State on —
(a)
any income not derived from that other Contracting State;
(b)
any grant, allowance or award whether or not in connection with the employment;
(c)
any income derived from that other Contracting State in respect of services rendered in that other Contracting State and which is paid by his employer in the first-mentioned Contracting State; and
(d)
any income (other than income of the kind referred to in paragraph (c) above) derived from the other Contracting State, in respect of services rendered in that other Contracting State with a view to supplementing the resources available to him for such purposes, not exceeding the sum of $3,000 in a calendar year.
2. An individual who is a resident of one of the Contracting States immediately before making a visit to the other Contracting State and is temporarily present in the other Contracting State for the purposes of study, research or training solely as a recipient of a grant, allowance or award from the Government of either of the Contracting States or from a scientific, educational, religious or charitable organisation or under a technical assistance programme entered into by the Government of either of the Contracting States for a period not exceeding two years from the date of his first arrival in that other Contracting State in connection with that visit shall be exempt from tax in that other Contracting State on —
(a)
the amount of such grant, allowance or award; and
(b)
any income derived from that other Contracting State in respect of services in that other Contracting State if the services are performed in connection with his study, research or training or are incidental thereto.
3. An individual who is a resident of one of the Contracting States immediately before making a visit to the other Contracting State and is temporarily present in the other Contracting State solely as an employee of, or under contract with, the Government or an enterprise of the first-mentioned Contracting State solely for the purpose of acquiring technical, professional or business experience for a period not exceeding twelve months from the date of his first arrival in that other Contracting State shall be exempt in that other Contracting State on any income derived from the first-mentioned Contracting State and any income derived from that other Contracting State in respect of services rendered in that other Contracting State if the services are performed in connection with his studies or training or are incidental thereto:
Provided that where that individual is an employee of, or under contract with an enterprise of one of the Contracting States, this paragraph shall apply only in respect of approved employees.
4. In this Article “approved” means approved by the Contracting State in which the individual will be temporarily present.
Article XV
1. Interest paid by the Government or a resident of Singapore shall be treated as derived from sources within Singapore and interest paid by the Government or a resident of Malaysia shall be treated as derived from Malaysia. Where, however, the person paying the interest, whether he is a resident of one of the Contracting States or not, has in the other Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred and such interest is borne by such permanent establishment, then such interest shall be deemed to be derived from Singapore or from sources within Malaysia as the case may be in which the permanent establishment is situated.
2. The provisions of this Article shall not apply if the recipient of the interest, being a resident of one of the Contracting States, has in the other Contracting State from which the interest is derived a permanent establishment with which the indebtedness in respect of which the interest is derived is effectively connected. In such a case, the provisions of Article IV shall apply.
3. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of interest paid, having regard to the indebtedness for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship and dealing with each other at arm’s length, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.
Article XVI
1. The Government of one of the Contracting States shall be exempt from tax in respect of any income derived from sources within the other Contracting State.
2. For the purpose of this Article the term “Government” shall include —
(a)
in the case of Singapore —
(i)
the Board of Commissioners of Currency;
(ii)
any local or statutory authority exempt from tax in Singapore;
(iii)
such institutions, as may be agreed from time to time between the two Contracting States;
(b)
in the case of Malaysia —
(i)
the Government of the States;
(ii)
the Bank Negara, Malaysia;
(iii)
any local or statutory authority exempt from tax in Malaysia;
(iv)
such institutions, as may be agreed from time to time between the two Contracting States.
Article XVII
1. Individuals who are residents of Singapore shall for the purposes of Malaysian tax be treated as Malaysian citizens not resident in Malaysia.
2. Individuals who are residents of Malaysia shall for the purposes of Singapore tax be treated as Singapore citizens not resident in Singapore.
Article XVIII
1. The laws of Singapore shall continue to govern the taxation of income arising in Singapore except where express provision to the contrary is made in this Agreement. The laws of Malaysia shall continue to govern the taxation of income derived from Malaysia except where express provision to the contrary is made in this Agreement. Where income is subject to tax in both Contracting States, relief from double taxation shall be given in accordance with the following paragraphs of this Article.
2. Subject to the provisions of the laws of Singapore regarding the allowance as a credit against Singapore tax of tax payable in any country other than Singapore, Malaysian tax payable, whether directly or by deduction, in respect of income from sources within Malaysia shall be allowed as a credit against Singapore tax payable in respect of that income.
3.—
(i) Subject to the provisions of the laws of Malaysia regarding the allowance as a credit against Malaysian tax of tax payable in any country other than Malaysia, Singapore tax payable whether directly or by deduction, in respect of income derived from Singapore shall be allowed as a credit against Malaysian tax chargeable in respect of that income.
(ii) For the purposes of this paragraph, the tax chargeable on any income of a person derived from Singapore shall be taken to be so much of the tax chargeable on his chargeable income for a year of assessment as the aggregate of the statutory income for that year of assessment of those sources the income of which is derived from Singapore less the aggregate of losses which if they had been profits would have been derived from Singapore and deductible under sections 43(2) and 44(2) of the Malaysian Income Tax Act, 1967, bears to the total income for that year of assessment before the deduction of any gifts or donations allowable under section 44(6) or any deduction falling to be made pursuant to Schedule 4 to the same Act for that year of assessment.
4. Notwithstanding the provisions of this Article, where remuneration for services performed on ships or aircraft engaged in international traffic is received by a person who is by the taxation laws of Malaysia treated as resident in Malaysia for the basis year for a year of assessment which coincides with the year of assessment for which he is resident in Singapore and is chargeable to tax on such income in both Contracting States, credit shall be given by the Contracting State in which he does not have a permanent home available to him and if he has a permanent home in both Contracting States, by the Contracting State with which his personal and economic relations are less close.
5. Where the person paying the pension under paragraph 4 of Article XIII, or the person paying the interest under paragraph 1 of Article XV is a resident of both Contracting States, credit shall be given by the Contracting State in which he does not have a permanent home available to him, and if he has a permanent home in both Contracting States, by the Contracting State with which his personal and economic relations are less close.
6. Notwithstanding the provisions of this Article, the income derived by any pension or provident fund or society of one of the Contracting States from the other Contracting State shall be exempt from tax in that other Contracting State if such fund or society is an approved fund or society under the taxation law of the first-mentioned Contracting State.
Article XIX
1. The taxation authorities of the Contracting States shall exchange such information (being information which is available under their respective taxation laws in the normal course of administration) as is necessary for carrying out the provisions of this Agreement or for the prevention of fraud or underpayment of taxes by reasons other than fraud or for the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of this Agreement. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than persons, including a court, concerned with the assessment and collection of those taxes or the determination of appeals in relation thereto.
2. In no case shall paragraph 1 be construed so as to impose on one of the Contracting States the obligation —
(a)
to carry out administrative measures at variance with the laws or the administrative practice of that or of the other Contracting State;
(b)
to supply particulars which are not obtainable under the laws or in the normal course of administration of that or of the other Contracting State;
(c)
to supply any information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy.
Article XX
1. Where a person who is a resident of one of the Contracting States considers that the actions of one or both of the Contracting States result or will result in taxation not in accordance with this Agreement he may, notwithstanding the remedies provided by the taxation laws in force in the Contracting States, appeal to the taxation authorities of the first-mentioned Contracting State. If the claim is justified, such taxation authorities shall endeavour to come to an agreement with the taxation authorities of the other Contracting State with a view to avoidance of taxation which is not in accordance with this Agreement.
2. The taxation authorities of the Contracting States may communicate with each other directly for the purposes of giving effect to this Agreement and for resolving difficulty or doubt as to the application or interpretation of this Agreement. In particular the taxation authorities may consult together to resolve disputes arising out of the application of paragraph 2 of Article IV or Article V or the determination of the source of a particular item of income or to endeavour to eliminate double taxation.
Article XXI
1. This Agreement shall come into force on the date when the last of all such things shall be done in Singapore and Malaysia as are necessary to give the Agreement the force of law in Singapore and Malaysia, and shall thereupon have the effect as respects —
(a)
Singapore tax for the year of assessment 1969 and subsequent years of assessment;
(b)
Malaysian tax for the year of assessment 1969 and subsequent years of assessment;
2. Nothing in this Agreement shall affect:
(a)
anything duly done or suffered to be done; or
(b)
any right, privilege, benefit, obligation or liability acquired, accrued or incurred,
under the provisions of the Agreement between the Government of the Republic of Singapore and the Government of Malaysia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed on the sixteenth day of August 1966 (hereinafter referred to as the 1966 Agreement).
3. For the purposes of this Agreement the balances as at 31st December 1968 under section 44(3) of the Income Tax Ordinance (Singapore) or section 108(6) of the Income Tax Act, 1967 (Malaysia) as determined under the provisions of the 1966 Agreement shall be carried forward.
Article XXII
This Agreement shall continue in effect indefinitely, but the Government of either Contracting State may, on or before 30th June in any calendar year (not earlier than the year 1972) give to the Government of the other Contracting State written notice of termination and in such event this Agreement shall cease to be effective as respects —
(a)
Singapore tax for the year of assessment next following that in which such notice is given and subsequent years of assessment;
(b)
Malaysian tax for the year of assessment next following that in which such notice is given and subsequent years of assessment.
IN WITNESS WHEREOF, the undersigned duly authorised thereto have signed this Agreement.
DONE in duplicate at Singapore this twenty-sixth day of December of the year one thousand nine hundred and sixty-eight in the English language.
|
For the Government of
the Republic of Singapore:
|
For the Government of
Malaysia:
|
|
GOH KENG SWEE
|
JAMAL BIN ABDUL LATIFF
|
[G.N. No. S 349/1968]
