71/1998 Coll.
The COMMUNICATION FROM the
Ministry of Foreign Affairs
Ministry of Foreign Affairs says that the 8 March. March 1996
Kuala Lumpur signed an agreement between the Government of the United Kingdom and the Government of
Malaysia on the avoidance of double taxation and the prevention of fiscal evasion with respect
income taxes.
With the Treaty, its assent, Parliament of the Czech Republic and the President of the
the Republic has ratified it. The instruments of ratification were exchanged in Prague on
March 9, 1998.
Treaty has entered into force, pursuant to article 29, paragraph 1. 2 day 9.
on 31 March 1998.
The Czech version of the Treaty shall be designated at the same time. In the English version of the Treaty,
for its interpretation of the applicable, can be consulted at the Ministry of
Foreign Affairs and the Ministry of finance.
CONTRACT
between the Government of the United Kingdom and the Government of Malaysia to avoid double
taxation and the prevention of fiscal evasion with respect to taxes on income
The Government of the United Kingdom and the Government of Malaysia, desiring to conclude a contract of
avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on
income, have agreed as follows:
Article 1
The person to which the contract relates
This agreement shall apply to persons who are resident or established in
one or both of the Contracting States, (residents).
Article 2
The tax, to which the contract relates
1. this Agreement shall apply to taxes on income imposed on behalf of Malaysia and
on behalf of the United States or their subdivisions or lower
local authorities, irrespective of the method of selecting any.
2. Current taxes, to which the contract relates are:
and) in the Czech Republic:
(i) the tax on income of individuals; and
(ii) the tax on income of legal persons;
(hereinafter referred to as "Czech tax");
(b)) in Malaysia:
(i) income tax;
(ii) additional income tax, i.e.. development tax; and
(iii) the income tax on oil extraction;
(hereinafter referred to as "Malaysian tax").
3. this Agreement shall also apply to any income taxes
the same, or similar, in principle, that will be stored after the signature
This agreement in addition to or in place of current taxes. The competent authorities of
the Contracting States shall notify each other of any significant changes that will be
made in their respective taxation laws.
Article 3
General definitions
1. In this agreement, unless the context requires a different interpretation:
and) the term "Czech Republic" refers to the territory of the Czech Republic, which the
may be according to the Czech legislation and in accordance with international
the legislation of the sovereign rights of the United States;
(b)), the term "Malaysia" refers to the territory of the Federation of Malaysia, territorial waters
Malaysia and the seabed and subsoil waters, and includes any
the area outside the waters of Malaysia and the seabed and subsoil
such an area which has been or may be marked in accordance with the laws of Malaysia
and in accordance with international law as an area where they can be
exercised sovereign rights of Malaysia relating to the exploration and exploitation of
natural resources, whether living or non-living;
(c)) the terms "a Contracting State" and "the other Contracting State" mean respectively according to the
the context of the Czech Republic and Malaysia;
(d)) the term "person" refers to an individual, a company and any other
Association of persons considered per person for tax purposes;
(e)) the term "company" refers to any legal entity or
any of the rightholder, considered for the purposes of taxation under the legal
of the person;
(f)) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting
State "means the enterprise carried on by a resident under the circumstances of one
Enterprise carried on by a Contracting State or a resident of the other Contracting
State;
(g)) the term "tax" means, as the context of the Malaysian tax or Czech
tax;
h) the term "national" means:
(i) any natural person who is a citizen of a Contracting
State;
(ii) any legal person, partnership, association or
any other rightholder, constituted under the laws in force in the
any Contracting State;
I) "international transport" means any transport by road undertaken
boat or plane, which is operated by an undertaking of a Contracting
State, if the ship or aircraft is operated solely between places are not in
the other Contracting State;
j) the term "competent authority" means:
(i) in the case of the Czech Republic the Minister of Finance of the Czech Republic, or
his authorised representative; and
(ii) in the case of Malaysia Minister of finance or his authorised representative.
2. each expression that is not otherwise defined will have for the application of this
the contract to the Contracting State the importance of it under the law of that
the Contracting State which regulates the taxes which are the subject of this agreement,
unless the context requires a different interpretation.
Article 4
Tax residence
1. the term "resident of a Contracting State" means for the purposes of this
of the Treaty, any person who, under the law of that State, subject to the
that State taxation because of their place of residence, permanent residence, place of
management, or any other similar criteria.
2. If the individual is under the provisions of paragraph 1, a resident in the
both of the Contracting States, its position will be determined in accordance with
the following rules:
and it is assumed that) this person is resident in the State in which the
He has a permanent home. If he has a permanent home in both States, it is assumed that
It is resident in the State, which has a strong personal and economic
relations (Centre of vital interests);
(b)) if it cannot be determined which state the person Center
their vital interests, or if it does not have a permanent home in any State
It is assumed that it is resident in the State in which it is usually
resides;
(c)) If this person usually resides in both States, or in any
of them, it is assumed that it is resident in the State of which he is a
National;
d) if that person is a national of both States or of any
of them, the competent authorities of the Contracting States shall adjust the question by mutual
by the agreement.
3. If a person other than an individual is subject to the provisions of paragraph 1,
a resident of both Contracting States, it is assumed, that is resident in
the State in which the place of effective management.
Article 5
Permanent establishment
1. the term "permanent establishment" means for the purposes of this agreement, the Permanent
equipment for the business, in which the undertaking carries out entirely or partly
their activity.
2. the term "permanent establishment" includes especially:
and instead of keeping);
(b)) race;
(c));
(d) a factory;)
e) a workshop;
f) mine, the site of diesel or gas, a quarry or any other place where the benefits
natural resources including timber or other forest products;
g) farm or plantation;
(h) a building site or construction), Assembly, installation or surveillance related,
If the last longer than 12 months.
3. It is assumed that the term "permanent establishment" shall not include:
and) device that is used only for storage or display of goods
belonging to the enterprise;
(b)) the supply of goods belonging to the enterprise solely for the purpose
storage or display;
(c)) the supply of goods belonging to the enterprise solely for the purpose
the processing of another undertaking;
d) durable equipment for the business, which is used only for the purpose of
purchase of goods, or collecting information for the enterprise;
e) durable equipment for the business, which is solely for the purpose
advertising, information, scientific research or similar
activities which have a preparatory or auxiliary to the company.
4. A person acting in a Contracting State on behalf of an undertaking of the second
Contracting State-other than an independent agent, which is subject to
paragraph 5-is considered to be a permanent establishment in the first-mentioned State,
If the first-mentioned State equipped with full powers, that there
usually uses, and that it allows to enter into contracts on behalf of the company,
When the activities of such person are limited to the purchase of goods for the undertaking, or
If the person maintains in the first-mentioned State a stock of goods
belonging to the enterprise from which regularly fills orders on behalf of the company.
5. Not considered that the enterprise of a Contracting State has a permanent
place of business in the other Contracting State merely because it carries on in this
the other State through a broker, his activities in General
agent or any other agent of an independent, if these
persons acting within their proper operation. However, if the activities of such
the agent is exercised wholly or almost wholly on behalf of that undertaking,
This agent will not be considered an independent agent, if the transaction
between this agent and undertaking do not comply with the principle of market prices.
6. the fact that a company which is resident in a Contracting
State, controlled by the company or is controlled by a company which is
a resident of the other Contracting State, or which carries on business in the
that other State (whether through a permanent establishment or otherwise),
does not make itself from any of the company's permanent establishment
the other company.
Article 6
Income from immovable property
1. the income accruing to a resident of a Contracting State from immovable
assets located in the other Contracting State may be taxed in that
the second State.
2. for the purposes of this agreement, the term "immovable property" is defined in the
conformity with the law of the Contracting State in which such property is located.
The term includes in any case the accessories of immovable property, live
and dead inventory used in agriculture and forestry, rights to which
the provisions of civil law relating to property, the right to
the enjoyment of immovable property and rights to variable or fixed payments for the
unfair advantage or consent to the mining of mineral deposits, deposits of diesel
or gas, quarries and other places of extraction of natural resources including wood
or other forest products. Ships, boats and aircraft shall not be regarded as
immovable property.
3. The provisions of paragraph 1 shall apply to income derived from the direct use,
hire or any other manner of use of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property
the assets of the company and to income from immovable property used for the performance of
an independent profession.
Article 7
The profits of enterprises
1. The profits of an enterprise of a Contracting State shall be subject to taxation only in
This State, if the undertaking does not pursue its activities in the other Contracting
State through a permanent establishment that is located there. If
the enterprise carries on business as described above, there may be gains
business taxed in that other State, but only to the extent
What is can be attributed to that permanent establishment.
2. If an enterprise of a Contracting State, carries on business in the
the other Contracting State through a permanent establishment that is there
placed, attach, subject to the provisions of paragraph 3 in any
Contracting State of such permanent establishment profits which could
so if it were a separate enterprise carried out the same or
similar activities under the same or similar conditions and was completely
independent contact with the enterprise of which it is a permanent establishment.
3. when calculating the profits of a permanent establishment shall be allowed to deduct the costs of
the company, including Executive and general administrative expenses, which would
have been odečítatelné, if the permanent establishment were a separate enterprise,
If it can be reasonably attributed to the permanent establishment, whether incurred in the
State in which the permanent establishment is situated or elsewhere.
4. If a Contracting State determine the gains that
to be attributed to a permanent establishment on the basis of allocation of the total
the profits of the enterprise to its various parts, nothing in paragraph 2 shall not preclude the
This Contracting State the profits to be taxed by the usual
the allocation. The method used for distribution of profits must, however, be such that the
the result was in accordance with the principles laid down in this article.
5. no permanent establishment of nepřičtou gains based on the fact that
only goods for the company.
6. the Profits to be attributed to a permanent establishment for purposes of the
the preceding paragraphs shall each year, in the same way, if the
There are insufficient grounds for a different procedure.
7. where profits include the part of the income which are dealt with separately
in the other articles of this agreement, the provisions of those articles shall not affect the
the provisions of this article.
Article 8
Shipping and air transport
1. the Profits incurred by an enterprise of a Contracting State from the operation of
ships or aircraft in international traffic, shall be subject to taxation only in
This Contracting State.
2. paragraph 1 shall also apply to shares in the profits from the operation of ships or
the aircraft incurred by a resident of a Contracting State from the participation in the
the pool, in a joint venture or an international operating agency.
Article 9
Associated enterprises
If
and the company) of a Contracting State participates directly or indirectly in the
management, control or capital of an undertaking of the other Contracting State, or
(b)) the same persons participate directly or indirectly in the management, control or
the assets of the enterprise of a Contracting State and enterprise of the other Contracting State
and if in these cases are both enterprises in their commercial or
financial relations terms that agree or they were
stored and which differ from those which would have been agreed upon between the
companies independent, can any profits which would, but for those
conditions have been accrued to one of the enterprises, but due to these
conditions were not achieved, be included in the profits of this business and
subsequently taxed.
Article 10
Dividends
1. dividends paid by a company which is resident in the same
a Contracting State to a resident of the other Contracting State may be taxed in the
that other State.
2. However, such dividends may also be taxed in the Contracting State in
which is a company that is paid, a resident, and according to the laws
the laws of this State, but the tax so determined shall not exceed 10 per cent of the
the gross amount of the dividends.
3. dividends paid by a company which is a resident of Malaysia,
a resident of the United States, which is the beneficial owner of the dividends, are
be exempt from any tax in Malaysia which is levied on dividends
In addition to the tax imposed on the income of the company. This paragraph shall not affect the
the provisions of the Malaysian law under which the tax on dividends
paid by a company which is a resident of Malaysia, of which was
or should be Malaysian tax deducted may be adjusted with reference to the
the malajsijskému rate of taxation year in which the amount of the tax,
following immediately after the year in which the dividends were paid.
4. the term "dividends" as used in this article means income from shares
or other rights-with the exception of claims-with profit, as well as
income from other rights to companies which are subjected to the same
taxation as income from shares by the tax legislation of the State in which it is
the company that rozdílí profit, a resident.
5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial
owner of the dividends, being a resident in a Contracting State,
exercised in the other Contracting State in which it is a resident company
paying the dividends, industrial or commercial activity
through a permanent establishment situated therein, or independent
occupation and participation for which dividends are paid, the
actually binds to that permanent establishment or to the profession. In such a
If the provisions of article 7 or article 15, depending on
What matters.
6. Where a company which is resident in a Contracting State,
achieves profits or income from the other Contracting State, that
the second State to tax dividends paid by the company, unless such
dividends are paid to a resident of that other State or to participate,
for which the dividends are paid is effectively tied to the Permanent
the establishment is situated in that other State, nor subject the
undistributed profits tax on retained profits of the company, and
When dividends paid or the undistributed profits consists wholly or
partly of profits or income realised in that other State.
Article 11
Interest
1. interest arising in a Contracting State and paid to a resident of the
of the other Contracting State may be taxed in that other State.
2. However, such interest may also be taxed in the Contracting State in
which have a source, and according to the laws of that State, but if the
the recipient is the beneficial owner of the interest, the tax so charged shall not exceed 12
per cent of the gross amount of the interest.
3. Notwithstanding the provisions of paragraph 2 interest, whose actual
the owner is a resident of the United States, will be exempted from taxation in the
Malaysia, if the loan or other debt in respect of which the interest
paid, it is the approved loan as defined by section 2 (1)
Malaysian income tax Act, 1967.
4. Notwithstanding the provisions of paragraphs 2 and 3 will be the Government of a Contracting
State shall be exempt from tax in the other Contracting State from interest received
This administration from the other State. For the purposes of this paragraph, the expression
"Government":
and in the case of Malaysia) means the Government of Malaysia and includes:
(i) Governments;
(ii) local authorities;
(iii) Bank Negara Malaysia;
(iv) the own funds of such institutions, the Government-owned Malaysia
or Governments or local authorities, on which he occasionally agree
the competent authorities of the Contracting States;
(b)) in the case of the United States means the Government of the United States, and includes:
(i) Governments;
(ii) local authorities;
(iii) the Czech National Bank;
(iv) the own funds of such institutions, Government-owned United
States or Governments or local authorities, on which it is occasionally
agreed between the competent authorities of the Contracting States.
5. The term "interest" as used in this article means income from debt-claims
any kind, secured or not secured the right to
real estate or whether or not the clause concerning the participation in the profits
of the debtor, and in particular, income from government securities and income from
bonds or debentures.
6. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial
owner of the interest, being a resident in a Contracting State, carries on business in the
the other Contracting State in which they have interest, industrial or source
business through a permanent establishment or independent
profession, and if the claim from which the interest is paid,
actually binds to that permanent establishment or to the profession. In such a
If the provisions of article 7 or article 15, depending on
What matters.
7. It is anticipated that interest to arise in a Contracting State when the
the payer is that State itself, a lower administrative unit, a local authority or
a resident of that State. However, if the payer of the interest, whether he is a resident of
of a Contracting State or not, has in a Contracting State a permanent
the establishment, in the context of the debt occurred, from which the interest
paid, and such interest shall be charged to such permanent establishment, it is considered that,
the source of the interest is in the State in which the permanent establishment is situated.
8. If the amount of interest that are applicable to the claim from which they are
paid exceeds the due to the special relationship between the
the payer and the beneficial owner of interest or that one or the other, it maintains with
other person, for any reason, the amount which would have been had given the payer
the beneficial owner, if it wasn't for such relationships, the
the provisions of this article to the latter amount. The amount of the
the salaries that it exceeds, in this case will be taxed according to the legal
the laws of each Contracting State, taking into account the other provisions
of this agreement.
Article 12
License fees
1. Royalties arising in a Contracting State and paid to the
a resident of the other Contracting State may be taxed in that other
State.
2. However, Such royalties may also be taxed in the Contracting
State in which it is their source, according to the legislation of that
State, but if the recipient is the beneficial owner of the royalties,
the amount of tax thus determined shall not exceed 12 per cent of the gross amount
license fees.
3. the term "royalties" as used in this article means payments
of any kind received as a consideration for the use of, or the right to use
any patent, trade mark, design or model, plan, secret
formula or manufacturing process or any copyright to the
the scientific part, or for the use or right to use, industrial,
commercial or scientific equipment, or for information that is subject to the
the experience acquired in the field of industrial, commercial or scientific, and
any copyright to literary and artistic.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of
of the royalties, being a resident in a Contracting State,
carries on in the other Contracting State in which the royalties
source, industrial or commercial activity through a fixed
the establishment, which is located there, or an independent profession and if
the right or property giving the emergence of royalty actually
attaching to such permanent establishment or to the profession. In this case,
the provisions of article 7 or article 15, depending on which case
it comes.
5. It is assumed that the licence fees to arise in a Contracting State,
When the payer is that Contracting State itself, a lower administrative department, local
the authority or a resident of that State. However, if the payer of royalties,
whether it is a resident of a Contracting State or not, has in a Contracting
State a permanent establishment in connection with which the obligation to pay arose
license fees, and those royalties are borne by such permanent
the establishment, it is considered that these licence fees should arise in the
State in which the permanent establishment is situated.
6. If the amount of the license fees that are related to the use,
law or information for which they are paid, exceeds the due
the special relationship between the payer and the beneficial owner or
that one and the other keeps with the third party, for any reason,
the amount you would have been had given the Bill-to customer is the beneficial owner, if
There was no such relationship, the provisions of this article shall apply only to that
latter amount. The amount of salaries, which will be in excess
this case taxed pursuant to the legislation of each Contracting State to the
reference to the other provisions of this agreement.
7. License fees by a resident of the United States, and that
as payment for the rental of movies in Malaysia are subject to the fee for the
rental of cinematographic films, will not be subject to Malaysian tax.
Article 13
Fees for technical services
1. fees for technical services arising in a Contracting
State and a resident of the other Contracting State, that is their
the beneficial owner, and these fees are subject to taxation in this second
the State, may be taxed in the first-mentioned Contracting State rate
not exceeding 10 per cent of the gross amount of the fees for technical services.
2. the term "fees for technical services" as used in this article means
payments of any kind to any person, other than the staff person
paying the fees, in connection with the services of a technical, managerial or
Advisory in nature.
3. the provisions of paragraph 1 of this article shall not apply if the beneficial
the owner of the fees for technical services, being a resident of one
a Contracting State, carries on business in the other Contracting State in which they have
the source of the fees for technical services, industrial or commercial activity
through a permanent establishment situated therein, or independent
profession and if these charges for technical services actually bind
with such permanent establishment or to the profession. In this case,
provisions of article 7 or article 15, depending on which case
it comes.
4. It is anticipated that fees for technical services have a source in the
a Contracting State when the payer is that Contracting State itself, a lower
the administrative unit, a local authority or a resident of that State. However, if the
the payer of the fees for technical services, whether he is a resident of a
of a Contracting State or not, has in a Contracting State a permanent establishment in
the connection with which the obligation to pay established fees for technical services, and
the fees for technical services are borne by such permanent establishment,
It is considered that these fees for technical services arise in the
State in which the permanent establishment is situated.
5. If the amount of the fees for technical services exceeds as a result
the special relationship between the payer and the beneficial owner or
that one and the other keeps with the third party, for any reason,
the amount you would have been had given the Bill-to customer is the beneficial owner, if
There was no such relationship, the provisions of this article shall apply only to that
latter amount. The amount of salaries, which will be in excess
this case taxed pursuant to the legislation of each Contracting State to the
reference to the other provisions of this agreement.
Article 14
Gains from the alienation of property
1. Gains from the alienation of immovable property, as defined in article 6 (1). 2
may be taxed in the Contracting State in which such immovable
the property is located.
2. Gains from the alienation of movable property forming part of the assets of a permanent
establishment which an enterprise of a Contracting State in the other Contracting
State, or movable property, which is a resident of a Contracting State
in the other Contracting State to exercise an independent profession, including the profits
realised from the alienation of such a permanent establishment (alone or together with the
the whole enterprise), may be taxed in that other State. Profits from the
the alienation of ships or aircraft operated by an undertaking of a Contracting
of the State in international traffic and movable property, that serves to operate the
these ships or aircraft may be taxed only in the Contracting State,
in which the enterprise is a resident.
3. Gains from the alienation of any property or assets other than that which is
referred to in paragraphs 1 and 2, shall be taxable only in the Contracting State in
which the alienator is a resident.
Article 15
An independent profession
1. Income derived by a resident of a Contracting State receives from the free
the profession or other independent activities of a similar nature, will be
taxed only in that State. However, if the independent activity performed
in the other Contracting State, such income may be taxed in that
the second State in the following circumstances:
and) if its stay in the other State for a period or multiple periods equal to the
or exceeds in the aggregate 183 days in the calendar year; or
(b)) if the remuneration for his services in the other State are either received from
residents of this State, or are borne by permanent establishment, which has
person who is not a resident of this State, in this State, and that in both
cases exceed US $ 4000 in the calendar year, regardless of
the fact that his stay in that State for one or more periods
not exceeding in the aggregate 183 days in the calendar year.
2. the term "professional services" includes especially independent activity
scientific, literary, artistic, educational or teaching, as well as
the independent activities of physicians, lawyers, engineers, architects, dentists and
accounting experts.
Article 16
Employment
1. a salaries, wages and other similar remuneration derived by a resident of a Contracting
the State is receiving due to paid employment, shall, subject to
the provisions of articles 17, 19 and 20 of the taxable only in that State, if the
employment is exercised in the other Contracting State. If there is
employment exercised, can be taxed for them received rewards in this
the second State.
2. remuneration which a resident of a Contracting State is receiving because of the
employment exercised in the other Contracting State, regardless of the
the provisions of paragraph 1 be taxed only in the first-mentioned State, if:)
the recipient is present in the other State for a period or periods,
which shall not exceed in the aggregate 183 days in the calendar year, and
(b)) the rewards are paid by the employer or by the employer, that
is not a resident of the other State, and
(c) the remuneration is not borne by) of a permanent establishment which the employer has in the
the second State.
3. Notwithstanding the preceding provisions of this article may be rewards
received because of employment exercised aboard a ship or aircraft
operated in international traffic by the enterprise of a Contracting State
taxed in that State.
Article 17
Royalties
Directors ' fees and other similar remuneration, which a resident of a Contracting State receives
as a member of the Board of Directors of a company which is a resident in the second
a Contracting State may be taxed in that other State.
Article 18
Artists and athletes
1. the revenue that they receive in public performers, such as
Theatre, film, radio or television artists, and musicians, or
athletes from such person executing activities, may be without
Notwithstanding the provisions of articles 15 and 16, be taxed in the Contracting State in
which these activities are carried out.
2. If the income from artistic or sports activities that personally
performs an artist or athlete accrues not to that artists or athletes
self, but to another person, may be those revenues regardless of the
the provisions of articles 7, 15 and 16, be taxed in the Contracting State in which the
an artist or an athlete carries out its activities.
3. the income received from the activities defined in paragraph 1, carried out in
under the cultural exchange between the Governments of the two States will be regardless of the
the provisions of paragraphs 1 and 2 shall be exempt from tax in the Contracting State in
which these activities are carried out.
Article 19
Public function
1.
(a) Remuneration other than pensions paid by one Contracting State or lower
administrative unit or a local authority thereof to an individual in
services rendered to that State or an administrative subdivision or lower
the local authority shall be taxable only in that State.
(b) However, Such remuneration will be taxed only in the other Contracting State,
If the services are rendered in that other State and the recipient who
is a resident of the other State:
(i) is a national of that other State, or
(ii) did not become a resident of that other State merely by reason of the provision of
These services.
2. a Any pension paid by one Contracting State, lower administrative
Department or local authority thereof either directly or from the funds, which
set up the physical person for services rendered to that State, lower
the Administrative Department or local authority shall be taxable only in that
State.
3. the provisions of articles 15, 17 and 18 shall apply to remuneration or pensions in
services rendered in connection with any industrial or commercial
the activities carried out by any Contracting State or lower administrative
Department or local authority of that State.
Article 20
Pensions and annuities
1. any pension and other similar salaries for the previous employment or
any annuity arising in a Contracting State and paid to
a resident of the other Contracting State shall be subject to subject to article
19 para. 2 taxed only in that other State.
2. the term "annuity" means the amounts paid in
dates for the life or during a specified or exactly
identifiable period of time based on the commitment to this performance
a substitute for the full corresponding value in cash or money
ocenitelnou.
Article 21
Students and trainees
A natural person who is a resident in one Contracting State
immediately prior to their arrival in the other Contracting State and who is
temporarily resides in that other State only:
and as a student at) officially recognized University, College, school or
other similar officially recognised educational Institute in that other State;
(b)) as a business or a technical apprentice; or
(c)) as the recipient of the cash donations, contributions and premiums received
for the purpose of study, research or training from the Government of one of the
States or from scientific, educational, religious and charitable
organizations, or within the framework of the programme of technical assistance, which the Government has entered into
one of the States, will be exempt from taxation in that other State from:
(i) all payments made from abroad for the purpose of necessary sustenance,
education, study, research or training;
(ii) the amounts of such cash donation, contribution or premium; and
(iii) the gratuity received because of services in that other State for the
provided that these services are performed in connection with its
study, research or training or are necessary for the purposes of its
nutrition and the length of her stay in that other State shall not exceed 183 days in
any calendar year.
Article 22
Professors and researchers
1. A natural person who is a resident of a Contracting State
immediately before arriving in the other Contracting State and who
This second State visit at the invitation of any University, College
or other similar educational institution for a period not exceeding two
years for the sole purpose of teaching or research, or both on this
the educational Institute, will be exempt from taxation in that other State of the
any remuneration for such teaching or research, which will be taxed at
the first-mentioned Contracting State.
2. This article shall not apply to income from research if such
research is conducted primarily for the private benefit of a specific person or persons.
Article 23
The revenue of the implied
Income of a resident of a Contracting State which are not expressly provided for
in previous articles of this Convention shall be taxable only in that
Contracting State, but if the revenue accrued from sources within
the other Contracting State may also be taxed in that other State.
Article 24
Avoidance of double taxation
1. in accordance with Malaysian laws and regulations, which govern the compensation of
tax payable in any country other than in Malaysia, in Malaysia, the tax will be United
tax payable on the basis of the Czech legislation and in accordance with this
the Treaty, a resident of Malaysia from income from sources in the Czech Republic
offset against the tax due on this income of Malaysia. If there is such a
dividend income paid by a company which is resident in the United
Republic, a company which is a resident of Malaysia and which owns
at least 15 percent of the voting shares of the company
paying the dividend, the credit shall take into account the Czech tax
payable on the income of companies, out of which the dividend is paid. Course credit
However, shall not exceed the portion of the Malaysian tax, as calculated before the
compensation for such income.
2. for the purposes of paragraph 1, it will be considered that the expression "United tax payable"
includes any amount of Czech tax according to Czech law
regulations, and in accordance with this agreement was due in respect of any income
arising from sources in the Czech Republic, if that income was not
partially or fully released from the Czech taxes as a result of:
(i) the stimulus law to promote economic development in the Czech
Republic, if they were in force on the date of signature of this agreement, and have not been
amended since the date of signature of this agreement, or only a tiny
changes that do not affect their general character; or
(ii) any other provision which may subsequently be introduced in the United
Republic as amendments or additions to these laws, if the competent
the authorities of the Contracting States agree that, in principle, measures
a similar character.
3. in the case of a resident of the United Kingdom, double taxation will be avoided
in the following way: the Czech Republic may, when depositing your tax
residents include in the basis upon which such taxes are stored,
income that may be in accordance with the provisions of this Treaty also taxed in the
Malaysia, however, allows to reduce the amount of tax computed on such a base
an amount equal to the tax paid in Malaysia. If there is such a
dividend income paid by a company which is a resident of Malaysia,
the company, which is resident in the Czech Republic and which owns
at least 15 percent of the voting shares of the company
paying the dividend, the credit shall take into account the Malaysian tax
payable on the income of companies, out of which the dividend is paid. The amount of the
the tax to be reduced, however, shall not exceed such a part of Czech taxes are calculated
prior to its reduction, which rather falls on revenue that can be
According to the provisions of this Treaty are taxed in Malaysia.
4. for the purposes of paragraph 3, it will be considered that the expression "tax paid in
Malaysia "includes the Malaysian tax which under the law of
Malaysia and in accordance with this agreement was payable:
and) from any income from sources in Malaysia, if this
income was not taxed at a reduced rate or exemption from Malaysian tax
as a result of:
(i) Department of 54A, 60A, 60B, and table 7A of the Malaysian Tax Act
income from 1967; or
(ii) the stimulus law to promote economic development in Malaysia
If they were in force on the date of signature of this agreement, and have not been altered since
date of signature of this agreement, or only slight changes
did not affect their general character; or
(iii) any other provision which may subsequently be introduced in Malaysia
as the amendments or additions to these laws, if the competent authorities of the
the Contracting States agree that this is a fundamentally similar measures
character;
(b)) out of interest, which are covered by article 11 (1) 3 if such interest
were not exempt from Malaysian tax in accordance with this paragraph.
5. If the license fees by a resident of the United States,
are subject to in Malaysia as the rent for the rental fee movies
cinematographic films, the charge for the purposes of paragraph 3,
considered to be the Malaysian tax.
Article 25
The principle of equal treatment
1. nationals of a Contracting State shall not be subjected in the
the other Contracting State to any taxation or duties associated with him,
which is other or more burdensome than the taxation and connected requirements
which are or may be subjected to the State under the same conditions
members of the second State.
2. the taxation on a permanent establishment which an enterprise of a Contracting State in
the other Contracting State, that other State will not be less favourable than
taxation of enterprises of that other State carrying out the same activity.
This provision shall not be construed as an obligation of a Contracting State,
admitting to residents of the other Contracting State personal credits, deductions and
tax reduction for reasons of status or family obligations that
It grants to its own residents.
3. enterprises of a Contracting State, the capital of which is wholly or partly,
directly or indirectly owned or controlled by one or more residents of the
of the other Contracting State, shall not be subjected in the first-mentioned Contracting
State to any taxation or duties associated with him, other
or more burdensome than the taxation and connected requirements to which are or
may be subject to other similar businesses for the first-mentioned State.
4. the term "taxation" as used in this article means taxes covered
covered by this agreement.
Article 26
Deal with cases on the way of the agreement
1. where a resident of a Contracting State considers that the measures
one or both of the Contracting States result or will result for him in taxation,
that is not in accordance with this agreement, he may, irrespective of the correcting
resources that provides the right of those States, present your case
the competent authority of the Contracting State of which he is a resident.
2. If the competent authority of the objection to be justified and
If it is not itself able to find a satisfactory solution, it will try to
case solved by mutual agreement with the competent authority of the other Contracting
the State so as to avoid taxation which is not in conformity with this
the Treaty.
3. the competent authorities of the Contracting States shall endeavour to resolve by mutual
the agreement difficulties or concerns that may arise in the interpretation or
the application of this agreement. They may also consult together for the Elimination of double
taxation in cases for which this agreement is not.
4. the competent authorities of the Contracting States may come in direct contact with a view to
reaching an agreement in the sense of the preceding paragraphs.
Article 27
The exchange of information
1. the competent authorities of the Contracting States shall exchange the information necessary
for the application the provisions of this agreement or of national laws
regulations of the Contracting States shall apply to the taxes which are the subject
This Treaty, in particular to the prevention or detection of tax
evasion or tax avoidance, covered by this agreement. Information
information thus exchanged will be kept confidential and may be made available only to
to persons or authorities (including courts and administrative authorities), which deal with
charge of the assessment, collection, enforcement or criminal prosecution, or
decisions on appeals in the case of taxes, which are covered by
This agreement.
2. The provisions of paragraph 1 shall not be in any way interpreted as
store one of the Contracting States the obligation:
and management measures) to conduct that would violate the law or
the administrative practice of that or of the other Contracting State;
(b)) to divulge information that could not be obtained on the basis of the legal
regulations or in a normal administrative procedure of this or of the other Contracting
State;
(c)) to divulge information which would have revealed the commercial, industrial,
economic or professional secret or trade process, or whose
communication would be contrary to public policy.
Article 28
Diplomatic and consular officers
No provision of this Agreement shall not affect the tax privileges, which
It is for the diplomatic and consular officials under the General rules of
international law or on the basis of specific agreements.
Article 29
Entry into force
1. this Treaty is subject to ratification and the instruments of ratification shall be exchanged
in Prague as soon as possible.
2. the contract shall enter into force by the exchange of instruments of ratification and its
the provisions will take effect:
a) in Malaysia:
When it comes to Malaysian tax for any year of assessment shall be carried out
taxes, starting on 1 July. January or later of the second calendar year
following the year in which the Agreement enters into force;
(b)) in the Czech Republic:
(i) in respect of taxes withheld at source, to amounts received from the
on January 1, including the calendar year following the year in which
The Treaty enters into force.
(ii) in respect of other taxes on income, for taxes imposed for each
the tax year starting on 1 July. January or later calendar year
following the year in which the Agreement enters into force.
Article 30
Notice of termination
This agreement shall remain in force until denounced by one
Contracting State. Any Contracting State may withdraw from the Contract in writing
through diplomatic channels, within a period of at least six months before the end of each
the calendar year following after the period of five years from the date when the contract
entered into force.
In this case the Treaty cease to apply:
(a) in the Czech Republic:
(i) in respect of taxes withheld at source, to amounts received from the
on January 1, including the calendar year following the year in which the
given notice of termination;
(ii) in respect of other taxes on income for taxes levied for each tax
year starting on 1 July. January or later of the calendar year following the
year in which the notice of termination has been given;
(b) in Malaysia:
When it comes to Malaysian tax for any year of assessment shall be carried out
taxes, starting on 1 July. January or later of the second calendar year
following the year in which the notice of termination has been given.
In witness whereof, the duly authorised thereto by their respective Governments, have signed the
This contract.
Given in duplicate in Kuala Lumpur on 8. March 1996 in Czech,
Malaysia and English languages, all three texts being equally
force. In case of any differences in interpretation will be crucial
English text.
For the Government of the United States:
Ing. Ivan Hotěk in r.
For the Government of Malaysia:
Tan Sri Dato Clifford f. Herbert v. r.
