Act (2004:874) On The Tax Agreement Between Sweden And Malaysia

Original Language Title: Lag (2004:874) om skatteavtal mellan Sverige och Malaysia

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Get a Day Pass for only USD$19.99.
section 1 of the agreement for the avoidance of double taxation and

Prevention of tax evasion with respect to taxes on income

Sweden and Malaysia signed on 12 March 2002,

together with the Protocol and the exchange of letters is

annexed to the agreement and which are part of this, as

law in this country. Agreement and Protocol is drawn up in

Swedish, Malay and English. The exchange of letters is written

in the English language. The Swedish and English text appears in annex

to this law.



section 2 of the tax rules of the agreement shall apply only to the

some of these causes restriction of the tax liability in Sweden

that would otherwise exist.



section 3 Have been repealed by law (2011:1410).



Transitional provisions



2004:874



1. this law shall enter into force on the day the Government determines and

applied



(a)) with respect to tax content at source, on income

acquired on 1 January of the calendar year immediately following the year in which the

the law enters into force, or later, and



(b)) in respect of other taxes on income, to taxes levied

for tax years beginning on 1 January of the calendar year

immediately following the year in which the law comes into force or later.



2. by law repeals Act (1995:542) about

double taxation treaties between Sweden and Malaysia.



The repealed Constitution shall, however, continue to apply



(a)) with respect to tax content at source, on income

acquired before 1 January of the calendar year immediately following the year in

When the Act comes into force, and



(b)) in respect of other taxes on income, to taxes levied

for tax years beginning before 1 January of the calendar year

immediately following the year in which the law comes into force.



2005:654



The Government states that the Act (2004:874) on tax treaties

between Sweden and Malaysia shall enter into force on 31 december

2005.



The agreement entered into force on 29 January 2005.



Annex



Agreement between the Government of the Kingdom of Sweden and Malaysia

Government for the avoidance of double taxation and the prevention

of tax evasion with respect to taxes on income



The Government of the Kingdom of Sweden and the Government of Malaysia, as

wish to conclude an agreement for the avoidance of double taxation and

Prevention of tax evasion with respect to taxes on income,

agreed as follows:



Article 1



Persons to whom the agreement applies



This agreement shall apply to persons who are domiciled in a

Contracting State or in both Contracting States.



Article 2



Taxes covered by the agreement



1. The currently outgoing taxes, on which agreement

apply, are:



a) in Malaysia:



1) the income tax, and



2) income taxes on petroleum,



(referred to below as the "Malaysian tax");



b) in Sweden:



1) state income tax,



2) withholding tax,



3) the Special income tax for non-residents,



4) the Special income tax for non-resident artists

and others, and



5) the municipal income tax,



(referred to below as "Swedish tax").



2. this Agreement shall also apply to taxes on income of same

or essentially similar kind, as after the signing of the

the agreement is levied in addition to or in place of the

present output taxes. The competent authorities of the

Contracting States shall communicate to each other the essential

changes to the respective tax legislation.



Article 3



General definitions



1. Unless the context gives rise to different, have in the application

by this agreement the following expressions the following meaning:



a) "Malaysia" refers to the territory of the Federation of Malaysia, its

the territorial waters within the territorial waters and the ocean floor and

basis, and includes areas outside of Malaysia

territorial waters, as well as such the area seabed and surface,

who are or will be under Malaysian law and in accordance with

the rules of international law to become an area over which Malaysia

exercising sovereign rights to explore and exploit

natural resources, whether living or non-living,



b) "Sweden" refers to the Kingdom of Sweden and the includes, when

the expression is used in the geographical sense, the territory of Sweden,

Sweden's territorial sea and other maritime areas over which the

Sweden, in conformity with international law, exercises

sovereign rights or jurisdiction;



(c)) "a Contracting State" and "the other Contracting

the State "refers to Malaysia or Sweden, depending on

context,



d) "person" includes natural persons, companies and other

Association,



e) "company" refers to the legal person or other that at

taxation is treated as a legal person,



f) "enterprise of a Contracting State" and "enterprise of the other

Contracting State "refers to the business carried on by the person

resident in one Contracting State, the respective companies

conducted by the resident of the other Contracting

the State,



g) "national" refers to:



1) natural person which has the nationality of a Contracting

State,



2) a legal person or any association formed

According to the laws in force in a Contracting State,



h) "international traffic" refers to transport by ship or

aircraft used by enterprises of a Contracting State except

When the ship or aircraft are used exclusively between

places in the other Contracting State,



in) "competent authority" refers to:



1) in Malaysia: the Minister of finance or his authorised

agents, and



2) in Sweden: the Minister of finance or his authorised representative

or authority to whom be entrusted to be competent

authority for the purposes of this agreement.



2. Where a Contracting State applies the contract at any

time is deemed, unless the context shall give rise to different,

any expression that is not defined in the agreement, have the same meaning

that statement has at that time under the State's

legislation in respect of such taxes to which the agreement

applied, and the significance of the phrase under the

the applicable tax laws of that State primacy

in front of the importance of the expression given in other legislation in

This state.



Article 4



Resident



1. for the purposes of this agreement reference to the expression "person

resident in one Contracting State "person under

the tax laws of that State, is liable to tax there because

of domicile, residence, place of management or any other

similar circumstances and also includes that State, its

political subdivisions, local authorities,

public and State bodies. The term includes

trading companies and estates only to the extent that its income is

liable to tax in that State in the same way as income

acquired by resident there, either in

trading company or the estate, or of its part owner or

beneficiaries.



2. where by reason of the provisions of paragraph 1 an individual is

a resident of both Contracting States, is determined his residence on

the following ways:



(a)) he is considered to be resident only of the State in which he has a dwelling

permanently available to him; If he has a

such property in both States, he shall be deemed to be a resident only in the

State with which his personal and economic relations are

the strongest (Centre of life interests),



(b)) if it cannot be settled in the State he has Center for

their living interests or if he's not in either State have

a dwelling that is permanently available to him, shall be deemed to

he be a resident only of the State where he usually resides,



(c)) if he usually resides in both States, or if he

not reside permanently in any of them, he shall be deemed to be a resident

only in the State of which he is a national,



d) if he is a national of both States or if he is not

nationals of any of them, the competent authorities of the

Contracting States the question by mutual agreement.



3. where by reason of the provisions of paragraph 1 a person other than the

an individual is a resident of both Contracting States, shall

the competent authorities seek rule by mutual

agreement.



Article 5



Permanent establishment



1. for the purposes of this agreement reference to the expression "fixed

establishment means a fixed place of business, from

What a business is wholly or partly carried on.



2. The term "permanent establishment" includes especially:



a) place of business management,



b) branch,



c) offices,



d) factory,



e) workshop, and



f) mine, an oil or gas well, a quarry or any other place of

the extraction of natural resources.



3. Place for building, construction, installation or

Assembly operations constitutes a permanent establishment only if

the operation lasts more than twelve months.



4. Notwithstanding the preceding provisions of this article shall be deemed to

the term "permanent establishment" shall not include:



(a)) the use of facilities solely for storage,

exhibition or disclosure of company-owned goods,



(b) holding of a company belonging to) stock in trade solely

for storage, exhibition or distribution,



(c) holding of a company belonging to) stock in trade solely

for working or processing by other company,



d) holding of fixed place of business

exclusively for the purchase of goods or obtaining information

for the company,



e) holding of fixed place of business

exclusively for the enterprise carrying on other activities of the

preparatory or auxiliary nature,



f) holding of fixed place of business

exclusively for combining activities listed in

paragraphs a)-(e)), provided that all the activities

carried out from the permanent place of business


because of this combination is of a preparatory or

Deputy art.



5. An enterprise of a Contracting State shall be deemed to have a permanent

establishment situated in the other Contracting State if the company

conducts business that consists of monitoring in the second

the State for a period exceeding six months in

adjacent to the site for construction, construction,

the installation or assembly operations in the other State.



6. If a person, who is not such independent representative on

what paragraph 7 applies, is operating in a Contracting State

for an enterprise of the other Contracting State, it is considered to

company-notwithstanding the provisions of paragraphs 1 and 2

to have a permanent establishment in the first State, in respect of each

activity which that person carries on business, if

person:



a) have and which regularly uses full power to conclude agreements in

the company's name, unless the activities of such person

conduct is limited to that specified in paragraph 4 and which,

If it was done from a fixed place of

business, would not make this fixed place

for business to the permanent establishment according to the

the provisions of that paragraph, or



b) is the holder of a company of inventories in the former

the State from which he regularly receiving and dispatching

orders for the company.



7. Enterprises of a Contracting State are not considered to have fixed

establishment situated in the other Contracting State only on the

because the company carries on business in that other

State through the intermediary of brokers, Commissioner or other

independent representative, provided that such person

in doing so, conducts its usual business.



8. the fact that a company resident in a

Contracting State controls or is controlled by a

a company resident in the other Contracting State or in a

companies doing business in the other State

(either from a permanent establishment or otherwise),

not in and of itself to constitute either company a permanent establishment

for the other.



Article 6



Income from immovable property



1. income, as a person resident in one Contracting State

acquires immovable property (including income from agriculture

or forestry) situated in the other Contracting State, may

be taxed in that other State.



2. a) the term "immovable property" has the same meaning as the expression

under the laws of the Contracting State in which the

the property is situated, unless the provisions of b) and (c)) below

causing the other.



(b)) the term "immovable property" includes, however, always buildings,

accessory to immovable property, the living and the dead furniture in

Agriculture and forestry, rights to which the provisions of

private law on immovable property apply, usufruct of immovable

property, and the right of changing or fixed remuneration

for the use of, or the right to use mineral occurrence,

source or another natural resource.



c) Ships, boats and aircraft is not considered to be real property.



3. the provisions of paragraph 1 shall apply to income acquired

through immediate use, through rental or other

use of immovable property.



4. the provisions of paragraphs 1 and 3 shall also apply to income

of immovable property belonging to the company and on the income of the firm

property used by independent professional activities.



Article 7



Income from operating



1. the Income of an enterprise of a Contracting State

acquire, shall be taxable only in that State unless the enterprise

carries on business in the other Contracting State from where

permanent establishment situated. If the enterprise carries on business just now

specified manner, the company's income is taxed in the other

the State, but only so much of them as is attributable to that

permanent establishment.



2. enterprises of a Contracting State carries on business in the

other Contracting State from where the permanent establishment situated,

are entered, unless the provisions of paragraph 3 shall give rise to another, in

Each Contracting State to the permanent establishment the

income as it can be assumed that the establishment would have acquired,

If it were a stand-alone company that operated by

the same or similar nature under the same or similar conditions

and independently completed the business with the undertaking to which the

establishment belongs.



3. In determining permanent establishment income deduction is allowed

for expenditure, including expenditure on the company involved

management and General Administration, which would have been

deductible if the permanent establishment were an independent

companies, to the extent that the expenditure is rightfully placed under the

permanent establishment, whether incurred in the State in spending

where the permanent establishment is situated or elsewhere.



4. If the available information is not sufficient

in order to determine the income that is attributable to a

company's permanent establishment, the provisions of this

article does not prevent a State that, with the application of internal

legislation, discretion determine a person's tax liability.

with the use of the information available and in

accordance with the provisions of this article.



5. income not attributable to a permanent establishment by reason only of the

the reason to purchase goods through the permanent establishment

merchandise for the enterprise.



6. for the purposes of the preceding paragraphs, income is determined as

is attributable to the permanent establishment by the same procedure

from year to year, unless good and sufficient reasons causing the

other things.



7. Included in income by operating income which are dealt with in particular in

other articles of this agreement, the provisions of these

articles of the rules contained in this article.



Article 8



Sea and air transport



1. income acquired by the company in a Contracting State

through the use of ships or aircraft in international

traffic shall be taxable only in that State.



2. the provisions of paragraph 1 shall also apply to income

acquired through participation in a pool, a joint business

or an international operating agency.



Article 9



Companies with associated enterprises



1. In cases where the



a) an enterprise of a Contracting State, either directly or indirectly

participate in the management or control of a company in the other

Contracting State or owns part of the company capital,

or



(b)) the same person participates directly or indirectly in the management,

or control of an enterprise of a Contracting State

as an enterprise of the other Contracting State or own

part in both of these corporate capital, observed the following.



If between businesses in terms of trade relations or

financial relations agreed upon or prescribed conditions, as

differ from those which would have been agreed between each other

independent company, receives all the income, that without such conditions

would have been one company but who, because of

the terms in question did not come about this company, be included in the

This company's income and taxed accordingly.



2. In cases where one Contracting State in the income of a company

in this State do-and accordingly, taxes

-income, for which an enterprise of the other Contracting

State is taxed in the other State, and it thus

ancillary income is such as would have been the company

in the first State on the terms agreed between

the enterprises had been those which would have been agreed between the

independent companies, that other State shall implement

proper adjustment of the amount of tax levied for

the income of that other State considers the adjustment justified.

When such adjustments are observed with the other provisions of this agreement

and the competent authorities of the Contracting States

If necessary, consult with each other.



Article 10



Dividend



1. Dividends paid by a company resident in one Contracting State

to a resident of the other Contracting State, may

be taxed in that other State.



2. Dividends paid by a company resident in Sweden

a resident of Malaysia may also be taxed in the

Sweden in accordance with Swedish law, but if the recipient

entitled to dividend tax may not exceed 15%

of the gross amount of the dividends. If the person who has the right to

the dividends is a company (other than a partnership) which

directly holds at least 10% of the paying company

total voting power distribution is exempt from

taxation in Sweden.



3. Dividends paid by a company resident in Malaysia

to a resident of Sweden, which has the right to

the dividend is exempt from any taxes that might be

is imposed on the dividends in Malaysia in addition to the taxes levied on the

the company's income or profit.



4. the provisions of paragraphs 2 and 3 shall not affect the company's

taxation of the profits of which the dividends are paid.



5. The term "dividends" is understood in this article income by

shares or other rights, not being debt-claims, with

right to share in profits, as well as income from other investments in companies,

who, under the law of the State in which the distributing company

is resident for tax purposes shall be treated in the same way as

income from shares.



6. the provisions of paragraphs 1, 2 and 3 shall not apply if the

who is entitled to the dividends is a resident of a Contracting

State and carries on business in the other Contracting State,

where the company paying the dividends is a resident, from where

permanent establishment situated or exercising independent

professional activities in the other State from where located

permanent device, and the proportion due to the


dividend paid owns actual relation to the Permanent

the establishment or the permanent devices. In such a case

apply the provisions of article 7 or article 15.



7. If the company resident in one Contracting State acquires

income from the other Contracting State, that other

State does not tax dividends paid by the company, except to the

so far as the dividend is paid to a resident of the other

State or insofar as the percentage due to the dividend payment

paid owns truly connected with a permanent establishment or

permanent device in that other State, nor on

the company's undistributed profits to a tax payable on

the company's undistributed profits, even if the delivery or the

undistributed profit consists wholly or partly of income

raised in that other State.



Article 11



Interest rate



1. interest, stemming from a Contracting State and which

paid to a resident of the other Contracting

the State, may be taxed in that other State.



2. interest may be taxed in the Contracting

State from which it is derived, under the laws of this

State, but if the beneficial owner of the interest is a resident of the

other Contracting State may not exceed 10

per cent of the gross amount of the interest.



3. Notwithstanding the provisions of paragraph 2, a

Government Contracting State be exempt from tax in the

other Contracting State in respect of the interest paid by the Government

obtains and derived from that other State.



4. For the purposes of paragraph 3, the expression "Government":



a) in Malaysia, the Government of Malaysia and includes:



1) State Governments;



2) Bank Negara Malaysia,



3) local authorities,



4) bodies governed by public law, and



5) Export-Import Bank of Malaysia Berhad (EXIM Bank),



b) in Sweden, the Government of Sweden and the includes:



1),



2) political subdivisions,



3) local authorities,



4) bodies governed by public law,



5) Swedish Export Credit Corporation (SEK) to the extent that the loan has

guaranteed by the Swedish State, and



6) Swedish International Development Cooperation Agency (SIDA).



5. The term "interest" for the purposes of this article the income of

each kind of claim, whether secured by mortgage

in immovable property or not, and whether it entails the right to

interest in the debtor's profits or not. The expression refers to

in particular, income from securities issued by State and

income from bonds or debentures, including

premiums and benefits pertaining to such securities,

bonds or debentures; Penalty fee for late

payment is not considered as interest for the purpose of this

article.



6. the provisions of paragraphs 1, 2 and 3 shall not apply if the

who is entitled to the interest is resident in a Contracting State

and carries on business in the other Contracting State, from

What interest rate are derived, from where the permanent establishment situated or

exercising independent professional activities in the other State from where

located permanent device, as well as the claim for which

the interest is paid owns truly connected with the permanent establishment

or the permanent devices. In such a case be applied

the provisions of article 7 or article 15.



7. interest shall be deemed to arise from a Contracting State if

the payer is a resident of this State, If

However, the person paying the interest, whether he is

resident in a Contracting State or not, in a

Contracting State has a permanent establishment or a permanent

device in connection with which the liability arose at the rate

paid, and the interest rate borne by the permanent establishment or the

permanent device, considered the rate obtained from the State

in which the permanent establishment or the permanent devices

There is.



8. By reason of a special relationship between the payer and the

the beneficial owner of the interest or between both of them and other

person the amount of the interest, having regard to the debt claim for which

the interest is paid, exceeds the amount which would have been agreed

between the payer and the beneficial owner of the interest on such

relations do not exist, the provisions of this

article only at the latter amount. In such a case be taxed

excess amounts in accordance with the legislation of each

Contracting State in compliance with the other provisions of

This agreement.



Article 12



Royalty



1. Royalty, as derived from a Contracting State and which

paid to a resident of the other Contracting

the State, may be taxed in that other State.



2. Royalties may be taxed in the Contracting

State from which it is derived, under the laws of this

State, but if the beneficial owner of royalties is a resident of the

other Contracting State may not exceed 8

per cent of the gross amount of the royaltyns.



3. The term "royalties" in this article, of course, every kind of

payments received as compensation for the use of, or

for the right to use copyright to literary, artistic

or scientific work, including cinematograph films and video

or tapes for radio or television broadcasting, any patent,

trademark, design or model, plan, secret formula or

secret manufacturing process or for the use of, or

the right to use, industrial, commercial or scientific

equipment, or for information (know-how) concerning evidence of

industrial, commercial or scientific experience.



4. the provisions of paragraphs 1 and 2 shall not apply if the

who is entitled to the royalty is a resident of a Contracting State

and carries on business in the other Contracting State, from

which the royalty arises, from which the permanent establishment or

exercising independent professional activities in the other State from where

located permanent device, as well as the right or

property in respect of which the royalties are paid owns real

connected with the permanent establishment or the Permanent

the device. In such cases, apply the provisions of article 7

and article 15.



5. Royalties shall be deemed to arise from a Contracting State if

the payer is a resident of this State, If

However, the person paying the royalties, whether he is

resident in a Contracting State or not, in a

Contracting State has a permanent establishment or a permanent

device in connection with which the obligation to pay the royalty

arose, and the royalty charged to the permanent establishment or

the permanent device, are considered royalty come from the

State in which the permanent establishment or the Permanent

the device is available.



6. where by reason of a special relationship between the payer and the

the person entitled to the royalties or between both of them and other

person the amount of the royalties, having regard to the use, the

right or the enlightenment for which royalties are payable,

exceeds the amount which would have been agreed between the payer

and the person entitled to the royalty for such relations not

exist, the provisions of this article shall apply only to

the latter amount. In such a case the taxable surplus amount

According to the law of each Contracting State with

observance of the other provisions of this agreement.



Article 13



Compensation for engineering services



1. Consideration for technical services, arising from a

Contracting State and paid to a resident of

the other Contracting State, may be taxed in that other

State.



2. The remuneration for technical services may be taxed

even in the Contracting State from which it is derived, according to

the laws of that State, but if the beneficial owner of

payment for technical services is a resident of the other

a Contracting State may not exceed 8% of the

the amount of the gross amount.



3. the expression "compensation for services" is understood in the

This article every kind of payment to a person, if not

is made to an employee of the person making the payment, for

services of technical or managerial nature or for

consulting services.



4. the provisions of paragraphs 1 and 2 shall not apply if the

who is entitled to compensation for technical services has

resident in a Contracting State, carries on business in the

other Contracting State from which compensation for

technical services are derived, from where the permanent establishment situated

or exercising independent professional activities in the other State

from there located a permanent device, as well as compensation for

technical services owns the actual relation to the Permanent

the establishment or the permanent devices. In such a case

apply the provisions of article 7 or article 15.



5. Compensation for technical services shall be deemed to arise from a

Contracting State where the payer is a resident of

This state. If, however, the person paying the remuneration

for technical services, whether he is a resident of a

Contracting State or not, has in a Contracting State

permanent establishment or permanent device in connection with which

the obligation to pay remuneration for technical services

arose, and the consideration for technical services are charged to the

permanent establishment or permanent device, are considered to

payment for technical services arise from the State of

the permanent establishment or the permanent devices

There is.



6. where by reason of a special relationship between the payer and the

the person entitled to payment for technical services or

between both of them and any other person the amount of the compensation, with

account of the services for which the remuneration for technical


services are paid, exceeds the amount which would have been agreed

between the payer and the person entitled to compensation if

such links do not exist, the provisions in

This article only on the latter amount. In such a case

excess amounts are taxed according to the legislation of each

Contracting State in compliance with the other provisions of

This agreement.



Article 14



Capital gain



1. Profit, as a person resident in one Contracting State

acquires from the alienation of such immovable property

referred to in article 6 and situated in the other Contracting

State, or from the alienation of shares in a company

whose principal assets consist of such property,

be taxed in that other State.



2. Gains from the alienation of movable property forming part

of the operating assets of a permanent establishment which an enterprise of the

a Contracting State has in the other Contracting State,

or of movable property, attributable to a permanent device

in order to exercise an independent profession, as a person with

resident of a Contracting State has in the other Contracting

the State, may be taxed in that other State. The same applies to profits

the alienation of such a permanent establishment (alone

or together with the whole enterprise) or of such a

permanent device.



3. Profit as a resident of a Contracting State

acquires from the alienation of ships or aircraft

used in international traffic, or movable property which is

attributable to the use of such ship or aircraft;

shall be taxable only in that State.



4. Gains from the alienation of property other than that

referred to in paragraphs 1, 2 and 3 shall be taxable only in the

Contracting State of which the alienator is a resident.



5. Gains from the alienation of property, acquired by the

a natural person who has been domiciled in a Contracting State

and a resident of the other Contracting State shall-without

by way of derogation from paragraph 4-taxed in the

first-mentioned Contracting State if the transfer of the property

occurs at some point that occurs during the ten years

immediately after the person ceased to be resident in

the first State.



Article 15



Independent professional activities



1. income, as a person resident in one Contracting State

acquires through the exercise of profession or other independent

activities, shall be taxable only in that State. The income may, however,

be taxed in the other Contracting State if:



a) he in the other Contracting State has a permanent

device which are regularly available to him in order to

exercise activities, but only so much of the income as is

attributable to the permanent device may be taxed in the

the other Contracting State, or



(b)) he is staying in the other Contracting State under

time period or periods totalling or

more than 183 days in any 12-month period beginning

or ending in the calendar year in question, but only so much

of the income as is attributable to the activities carried out in

the other State may be taxed in that other State.



2. The expression "liberal profession" includes especially independent

scientific, literary and artistic activities,

educational and teaching activities and such

independent operations, as a doctor, lawyer, engineer,

Architect, dentist and an accountant.



Article 16



Single service



1. the provisions of articles 17, 19, 20 and 21

causing the other, taxable wages and other similar remuneration,

as a resident of a Contracting State carries on the basis

of employment, only in that State unless the work is carried out

in the other Contracting State. If the work is performed in this

other State, compensation received for work are taxed

there.



2. Notwithstanding the provisions of paragraph 1 shall be taxable

compensation, as a person resident in one Contracting State

receipt for work performed in the other Contracting State,

only in the first-mentioned State, if:



(a)) the recipient resides in the other Contracting State under

time period or periods totalling not more than

183 days during a 12-month period commencing or ending

during the calendar year concerned, and



b) the remuneration is paid by the employer who is not domiciled in

the other State or on his behalf, and



c) compensation does not affect the establishment or

permanent device which the employer has in the other

State.



3. Notwithstanding the preceding provisions of this article,

remuneration for work performed on board the ship or

aircraft in international traffic by an enterprise of a

Contracting State, be taxed in that State.



Article 17



Directors ' fees



Directors ' fees and other similar remuneration, as a person with

resident in one Contracting State receives as a member of the

Board or other similar bodies in companies established in the

other Contracting State, may be taxed in that other State.



Article 18



Artists and athletes



1. Notwithstanding the provisions of articles 15 and 16 shall

income, as a resident of a Contracting State

acquire through their personal activities in the other

Contracting State in his capacity as a performer, such as theatre or

movie actor, radio or television artiste, or a musician,

or as athletes, be taxed in that other State.



2. In cases where the income through personal activities, artist

or athletes engaged in that capacity, not become the property of

artist or sportutövaren yourself without the other person, this

income, notwithstanding the provisions of articles 7, 15 and

16, be taxed in the Contracting State in which the artist or

sportutövaren conducts business.



3. the provisions of paragraphs 1 and 2 shall not apply to

remuneration or income acquired due to business

carried on in a Contracting State if the visit to that State, directly

or indirectly, funded, completely or almost completely, by

public funds of the other Contracting State, one of

its political subdivision, local authority or

bodies governed by public law.



Article 19



Pensions, annuities and similar payments



1. Pensions and other similar remuneration, payment under

social security legislation and annuities arising from

a Contracting State and paid to a resident of

the other Contracting State, may be taxed in the

first-mentioned Contracting State.



2. The term "annuity" means a prescribed amount, which

be paid periodically at specified times during a person's

lifetime or during a specified or ascertainable period of time, and

that is because of the obligation to give effect to these

However, payments made as remuneration for fully answering

consideration in money or money value.



Article 20



Public service



1. a) salaries and other similar compensation (with the exception of

pension), paid by a Contracting State, one of its

political subdivision, local authority or

bodies governed by public law to natural person because of work

performed in this State, its political underavdelningars,

local authorities or public law bodies ' service,

shall be taxable only in that State.



b) Such salary and other similar remuneration shall be taxable, however,

only in the other Contracting State if the work is performed in

that other State and the person concerned is resident in that other

State and



1) is a national of that other State, or



2) didn't get a resident of that other State solely for

carry out the work.



2. the provisions of articles 16 and 17 shall apply to salaries and

other similar remuneration paid for work as

performed in connection with business carried on by a Contracting

State, its political subdivisions, local authorities

or bodies governed by public law.



Article 21



Students and business apprentices



A natural person domiciled in a Contracting State

immediately before a stay in the other Contracting State

and who is staying temporarily in the other State solely in

as



a) students at a recognised University, school or other

similar recognized educational institution in the other State,



b) commercial or professional intern, or



c) recipients of scholarships, maintenance intended to cover

specific costs or amounts for the main purpose of

study, research or practice and obtained from

the Government of any of the States or from a scientific or

religious organization or an educational or

charity or as a technical

assistance programs entered into by the Government of one of the States,

shall be exempt from taxation in the other State

as regards



1) compensation from abroad who intend to cover the costs of

his living, training, studies, research or practice,



2) previously specified scholarship, maintenance intended to cover

specific expenditure or premium, and



3) remuneration for work performed in the other State that does not

more than 2 500 US dollars per calendar year, where the work carried out in

the course of study, research or training or are

required for his livelihood. The said amount shall

include basic allowance for the calendar year in question.



Article 22



Other income



Income as a resident of a Contracting State

acquires and not specifically addressed in the previous

articles of this Agreement shall be taxable only in that Contracting

State If such income is derived by the other Contracting


State may however also be taxed in that other State.



Article 23



The Elimination of double taxation



1. in the case of Malaysia, double taxation shall be avoided in

the following ways:



With regard to the Malaysian legislation which allows to

tax paid in a country other than Malaysia to offset

Malaysian tax, resident of Malaysia who

received income derived from Sweden shall be allowed a deduction for

the Swedish tax paid under Swedish law and in

accordance with the provisions of this agreement from the Malaysian

tax paid on income. When such income constitutes

dividends paid by a company resident in Sweden

to a company resident in Malaysia, which owns at least 10 per cent

of the voting rights of the shares of the company paying the dividends shall be at

settlement account shall be taken of the Swedish tax paying dividends

the company paid for income from the dividend paid.

The deduction shall not, however, exceed that part of the

Malaysian tax, as calculated before the deduction, which is attributable

to such income.



2. in the case of Sweden, double taxation shall be avoided in

the following ways:



a) where a resident of Sweden acquires income according to

Malaysian law and in accordance with the provisions of

This agreement may be taxed in Malaysia, Sweden-with

subject to the provisions of Swedish legislation concerning

deduction of foreign taxes (even in the version in the future

can get through to change without the general principle set out

This change)-from the Swedish tax on income offset a

the Malaysian tax paid on

income.



b) where a resident of Sweden receives income, which

in accordance with the provisions of this Agreement shall be taxable only in

Malaysia, Sweden-in determining Swedish progressive

tax-take account of such income which shall be taxable only in Malaysia.



c) Notwithstanding the provisions of subparagraph (a)) in this paragraph is

dividends from companies established in Malaysia to companies with

resident in Sweden exempt from Swedish tax according to the

the provisions of Swedish law on tax exemption for dividends

obtained by Swedish companies by companies abroad.



d) If a Swedish company has a permanent establishment in Malaysia

for the purposes of a) of this paragraph the expression '

Malaysian tax paid "is considered to include the Malay

tax on such permanent establishment the income that would have been paid

but that has not been paid, or paid with lower amounts due

temporary provisions on incentives in the

law in Malaysia that is intended to promote economic

development to the extent that such exemption or

tax credit granted for profits from industrial activities

or production operations or from agriculture, forestry,

fishing or tourism industry (in that included restaurants and

Hotels), provided that the activities exercised in the

Malaysia. For the purposes of c) in this paragraph, a tax

of 15 per cent on a Swedish tax bases deemed to have

paid for such activities and under the conditions

as stated in the previous sentence even if the tax actually

paid in Malaysia is less than 15 percent.



e) (d)) shall be applied only during the first

ten years that this agreement is applied. This time period may

may be extended by mutual agreement between the competent

authorities.



Article 24



Prohibition of discrimination



1. nationals of a Contracting State shall not, in the second

Contracting State be subject to taxation or

coherent demands that are of a different kind or more onerous than

the taxation and related requirements as nationals of

the other State under the same circumstances are or may be

subject to. Notwithstanding the provisions of article 1

This provision also applies to any person who is not domiciled

of a Contracting State or in both Contracting States.



2. the taxation on a permanent establishment which businesses in a

Contracting State has in the other Contracting State,

in that other State shall not be less favourable than

taxation of the company in the other State, that carries

activities of the same kind.



3. Except where the provisions of article 9, paragraph 1,

Article 11, paragraph 8, article 12, paragraph 6, or article 13, paragraph 6

apply, interest, royalties, compensation for engineering services

and other payments from the company in a Contracting State to the

a resident of the other Contracting State

deductible in determining taxable income

for such a company on the same terms and conditions as the payment to the person

established in the first State. However, this does

not for a Contracting State's domestic law

provides that the tax should be withheld at source and this

obligation is not fulfilled.



4. Enterprises of a Contracting State, the capital of which is wholly or

partly owned or controlled, directly or indirectly, by a

or more persons resident in the other Contracting

the State shall not be subjected in the first State for

taxation or related requirements of other

kind or more burdensome than the taxation and thus

coherent requirements as other similar companies in the

first State are or may be subjected.



5. This article does not have the obligation of



(a)) a Contracting State to provide for physical person resident in

the other Contracting State such personal deductions for

taxation, such exemptions or reductions for

because of marital status or dependants for family

granted resident in their own State;



b) Malaysia to allow Swedish citizens who do not live in

Malaysia, the personal deduction for tax purposes,

the exemption or reduction in taxation at the time of

the signing of this agreement by law is available

only for Malaysian citizens who do not live in

Malaysia.



6. The term "taxation" means the taxes of this article

to which the agreement applies.



Article 25



The procedure for the mutual agreement



1. If a person believes that a Contracting State or both

Contracting States took measures to him causes

or will result in taxation contrary to

the provisions of this agreement, he may, without prejudice to

his right to make use of the remedies contained in these

the internal legal order of States, submit the matter to the competent

authority of the Contracting State in which he is domiciled,

or, in the case of application of article 24, paragraph 1, of the

Contracting State of which he is a national. The matter shall be

within three years from the time the person in question had

knowing the action giving rise to taxation as

contrary to the provisions of the agreement.



2. If the competent authority finds the complaint justified but

Unable to achieve a satisfactory solution,

the authority shall seek decide by mutual

agreement with the competent authority of the other

Contracting State in order to avoid taxation which

contrary to the agreement. Agreement is implemented

Notwithstanding the time limits in the Contracting States

internal legislation.



3. the competent authorities of the Contracting States shall

by mutual agreement, seek to determine or

doubts arising concerning the interpretation or

the application of the agreement. They can also initiate consultations with a view to

eliminate double taxation in cases not covered by

the agreement.



4. the competent authorities of the Contracting States may

enter into direct relations with each other in order to meet

agreement in the sense of the preceding paragraphs.



Article 26



Exchange of information



1. the competent authorities of the Contracting States shall

Exchange such information as is necessary to implement the

the provisions of this agreement or of the Contracting

States ' internal legislation on taxes covered

by the agreement, insofar as the taxation thereunder

not contrary to the agreement. Exchange of information is limited

not by article 1. Information which a Contracting State

received shall be treated as secret in the same manner as

information obtained in accordance with the internal legislation of the

This State and shall be disclosed only to persons or authorities

(including courts and administrative bodies)

establishes, or collect the taxes which are the subject of

agreement or deal with prosecution or appeal in respect of

These taxes. Such persons or authorities shall use the

the information only for such purposes. They may disclose

the information in public court proceedings or in

Court decisions.



2. the provisions of paragraph 1 is not considered to entail the obligation for

a Contracting State to



a) take administrative measures derogating from the legislation

or administrative practices in force in that Contracting State, or in the

the other Contracting State,



b) provide information that is not available under

legislation or the usual administrative practice in this

Contracting State or of the other Contracting State,



c) supply information which would disclose any trade secret,

industrial, commercial or professional secret, or in

trade used the process or information,

the surrender would be contrary to ordre public considerations (

public).



Article 27



Limitation of benefits



1. If the income due to the provision of this agreement does not fully


out may be taxed in a Contracting State and, under the applicable

laws in force in the other Contracting State a person, what

of this income, taxed on the portion of income that

transmitted or received in that other State and not to

earnings of the whole amount, such limitation of

the right to tax in the first-mentioned Contracting State

apply only to the portion of income that is transferred to or

received in that other Contracting State.



2. the provisions of this agreement which allows exemption from or

reduction of taxes shall not apply to persons who are

entitled to any tax benefit by:



a) legislation in any of the States referred to in the notes,

exchanged between States, or



b) someone in substantially similar tax legislation.



Article 28



Members of the diplomatic mission and consular posts



The provisions of this Agreement shall not affect the privileges at the

taxation which, according to the General rules of international law or

provisions of specific agreements apply members

the diplomatic mission or consular post.



Article 29



Date of entry into force



1. the Contracting States shall notify each other when they

measures have been taken as required by the legislation of the State in

respect to this Agreement shall enter into force.



2. the agreement shall enter into force on the thirtieth day after the date of

the last of these notifications is received and applied:



a) in Malaysia:



1) with respect to other Malaysian tax than income tax at

petroleum, the tax imposed for the tax year beginning 1

January of the calendar year immediately following the year in which the agreement enters into

force or later,



2) with respect to income tax on petroleum, the tax imposed

for the tax year that begins on 1 January of the second calendar year

following the year in which the agreement enters into force or later,



b) in Sweden:



1) with respect to tax content at source, on income

acquired on 1 January of the calendar year immediately following the year in which the

the agreement enters into force or later,



2) in respect of other taxes on income, to taxes imposed

for tax years beginning on 1 January of the calendar year

immediately following the year in which the agreement enters into force or later.



3. the agreement between the Government of Malaysia and the Kingdom of Sweden

Government for the avoidance of double taxation and the prevention

of fiscal evasion with respect to taxes on income, signed at Kuala

Lumpur on 21 november 1970, shall cease to be valid and its

provisions shall no longer apply from the date on which

This agreement shall apply in accordance with the provisions of paragraph 2 of

This article.



Article 30



Termination



This agreement will remain in force until further notice. Each

Contracting State may by diplomatic means in writing

the contract by notice to the other Contracting

State thereof by 30 June in any calendar year

following a period of five years from the date on which the contract

enters into force. In the event of such termination, the agreement will terminate

to apply



a) in Malaysia:



1) with respect to other Malaysian tax than income tax at

petroleum, the tax imposed for the tax year beginning 1

January of the calendar year immediately following the year in which the termination takes place

or later,



2) with respect to income tax on petroleum, the tax imposed

for the tax year that begins on 1 January of the second calendar year

following the year in which the termination occurs or later,



b) in Sweden:



1) with respect to tax content at source, on income

acquired on 1 January of the calendar year immediately following the year in which the

termination or later,



2) in respect of other taxes on income, to taxes imposed

for tax years beginning on 1 January of the calendar year

immediately following the year in which the termination occurs or later.



In witness whereof the undersigned, being duly

authorised, have signed this agreement.



Done at Stockholm on 12 March 2002 in duplicate in

Malaysian, Swedish and English languages which are equally

an official record. In the event that a dispute arises concerning the interpretation or

the application of the agreement, the English text shall be

seniority.



For the Government of the Kingdom of Sweden



Leif Pagrotsky



For the Government of Malaysia



Seri Rafidah Aziz



PROTOCOL



1. Upon signature of the agreement between the Kingdom of Sweden

Government and the Government of Malaysia for the avoidance of

double taxation and the prevention of fiscal evasion with respect to

taxes on income, the two Governments agreed on

the following provisions shall form an integral part of the

the agreement.



2. It is understood that:



(a)) the provisions of article 8 paragraph 1 shall apply to income

acquired by the air transport Consortium Scandinavian Airlines System

(SAS) but only in respect of that part of the income corresponding to

the share in the Consortium held by SAS Sweden AB, the

Swedish shareholder in SAS,



(b)) the provisions of article 14 paragraph 3 apply in respect of

profits acquired by the air transport Consortium Scandinavian

Scandinavian Airlines System (SAS) but only in respect of the part of the gain

equal to the share in the Consortium held by SAS Sweden

AB, the Swedish partner of SAS, and



c) for the purposes of the provisions of article 16, paragraph 3,

be income which a resident of Sweden claiming for

work, which is performed on board an aircraft which is used in

international traffic by the air transport Consortium Scandinavian

Scandinavian Airlines System (SAS), shall be taxable only in Sweden.



In witness whereof the undersigned, being

duly authorized, have signed this Protocol.



Done at Stockholm on 12 March 2002 in duplicate in

Malaysian, Swedish and English languages which are equally

an official record. In the event that a dispute arises concerning the interpretation or

the application of the Protocol, the English text shall be

seniority.



For the Government of the Kingdom of Sweden



Leif Pagrotsky



For the Government of Malaysia



Seri Rafidah Aziz



EXCHANGE of LETTERS



Sweden's note concerning article 27, paragraph 2



I have the honour to refer to the Agreement between the

The Government of the Kingdom of Sweden and the Government of

Malaysia for the avoidance of double taxation and the

Prevention of fiscal evasion with respect to taxes on income

which has been signed today and to propose on behalf of the

The Government of the Kingdom of Sweden that with reference to

paragraph 2 of Article 27:



The provisions of this Agreement shall not apply to persons

carrying on offshore business activity under the Labuan

Offshore Business Activity Tax Act 1990 (as amended).



"Offshore business activity" means an offshore business

activity as defined in Section 2 (1) of the Labuan Offshore

Business Activity Tax Act 1990 (as amended).



If the foregoing proposal is acceptable to the Government of

Malaysia, I have the honour to suggest that the present Note

and Your Excellency's reply to that effect should be regarded

as constituting an agreement that shall form an integral part

of the Agreement for the avoidance of double taxation in this

matter, which shall enter into force at the same time as the

entry into force of this Agreement.



For the Government of the Kingdom of Sweden



Leif Pagrotsky



Malaysia's note concerning article 27, paragraph 2



I have the honour to acknowledge receipt of Your Excellency's

Note of today, which reads as follows:



"I have the honour to refer to the Agreement between the

The Government of the Kingdom of Sweden and the Government of

Malaysia for the avoidance of double taxation and the

Prevention of fiscal evasion with respect to taxes on income

which has been signed today and to propose on behalf of the

The Government of the Kingdom of Sweden that with reference to

paragraph 2 of Article 27:



The provisions of this Agreement shall not apply to persons

carrying on offshore business activity under the Labuan

Offshore Business Activity Tax Act 1990 (as amended).



"Offshore business activity" means an offshore business

activity as defined in Section 2 (1) of the Labuan Offshore

Business Activity Tax Act 1990 (as amended).



If the foregoing proposal is acceptable to the Government of

Malaysia, I have the honour to suggest that the present Note

and Your Excellency's reply to that effect should be regarded

as constituting an agreement that shall form an integral part

of the Agreement for the avoidance of double taxation in this

matter, which shall enter into force at the same time as the

entry into force of this Agreement. "



The above proposal being acceptable to the Government of

Malaysia, l have the honour to confirm that Your Excellency's

Note and this reply shall be regarded as constituting an

agreement that shall form an integral part of the Agreement for

the avoidance of double taxation in this matter, which shall

enter into force at the same time as the entry into force of

This Agreement.



For the Government of Malaysia



Seri Rafidah Aziz



Agreement between the Government of the Kingdom of Sweden 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 Kingdom of Sweden 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 1



Persons covered



This Agreement shall apply to persons who are residents of one

or both of the Contracting States.



Article 2



Taxes covered



1. The existing taxes which are the subject of this Agreement

the are:



(a) in Malaysia:



(i) the income tax; and



(ii) the petroleum income tax;



(hereinafter referred to as "Malaysian tax");




(b) in Sweden:



(i) the national income tax (State income tax);



(ii) the withholding tax on dividends (withholding tax);



(iii) the income tax on non-residents (the Special

income tax for non-residents);



(iv) the income tax on non-residents artistes and athletes (the

Special income tax for non-resident artists, etc.);

and



(v) the municipal income tax (municipal income tax);



(hereinafter referred to as "Swedish tax").



2. This Agreement shall apply also to any identical or

substantially similar taxes on income which are imposed after

the date of signature of this Agreement in addition to, or in

place of, the existing taxes. The competent authorities of the

Contracting States shall notify each other of important changes

which have been made in their respective taxation laws.



Article 3



General definition



1. For the purposes of this Agreement, unless the context

otherwise requires:



(a) the term "Malaysia" means the territories of the Federation

of Malaysia, the territorial waters of Malaysia and the sea-bed

and subsoil of the territorial waters, and includes any area

extending beyond the limits of the territorial waters of

Malaysia, and the sea-bed and subsoil of any such area, which

has been or may hereafter be designated, under the laws of

Malaysia and in accordance with international law as an area

over which Malaysia has sovereign rights for the purposes of

exploring and exploiting the natural resources, whether living

or non-living;



(b) the term "Sweden" means the Kingdom of Sweden and, when

used in a geographical sense, includes the national territory,

the territorial sea of Canada as well as other maritime areas

over which Sweden in accordance with international law

exercises sovereign rights or jurisdiction;



(c) the terms "a Contracting State" and "the other Contracting

State "mean Malaysia or Singapore as the context requires;



(d) the term "person" includes an individual, a company and any

other body of persons;



(e) the term "company" means any body corporate or any entity

which is treated as a body corporate for tax purposes;



(f) the terms "enterprise of a Contracting State" and

"enterprise of the other Contracting State" mean respectively

an enterprise carried on by a resident of a Contracting State

and an enterprise carried on by a resident of the other

Contracting State;



(g) the term "national" means:



(i) any individual possessing the citizenship of a Contracting

State;



(ii) any legal person, partnership or association deriving its

status as such from the laws in force in a Contracting State;



(h) the term "international traffic" means any transport by a

ship or aircraft operated by an enterprise of a Contracting

State, except when the ship or aircraft is operated solely

between places in the other Contracting State;



(i) the term "competent authority" means:



(i) in the case of Malaysia, the Minister of Finance or his

authorised representative; and



(ii) in the case of Canada, the Minister of Finance, his

authorised representative or the authority which is designated

as a competent authority for the purpose of this Agreement.



2. As regards the application of this Agreement at any time by

a Contracting State, any term not defined therein shall, unless

the context otherwise requires, have the meaning that it has at

that time under the law of that State for the purposes of the

taxes to which this Agreement applies, any meaning under the

applicable tax laws of that State prevailing over a meaning

given to the term under other laws of that State.



Article 4



Resident



1. For the purposes of this Agreement, the term "resident of a

Contracting State "means any person who, under the tax laws of

that State, is liable to tax therein by reason of his domicile,

residence, place of management or any other criterion of a

similar nature, and also includes that State and a political

Subdivision, a local authority and any statutory body or

governmental agency thereof. However, in the case of a

partnership or estate the term applies only to the extent that

the income derived by such partnership or estate is subject to

tax in that State as the income of a resident, either in its

hands or in the hands of its partners or with.



2. Where by reason of the provisions of paragraph 1 an

individual is a resident of both Contracting States, then his

status shall be determined as follows:



(a) he shall be deemed to be a resident only of the State in

which he has a permanent home available to him; If he has a

a permanent home available to him in both States, he shall be

deemed to be a resident only of the State with which his

personal and economic relations are closer (centre of vital

interests);



(b) if the State in which he has his centre of vital interests

cannot be determined, or if he has not a permanent home

available to him in either State, he shall be deemed to be a

resident only of the State in which he has an habitual abode;



(c) if he has an habitual abode in both States or in neither of

them, he shall be deemed to be a resident only of the State of

which he is a national;



(d) if he is a national of both States or of neither of them,

the competent authorities of the Contracting States shall

settle the question by mutual agreement.



3. Where by reason of the provisions of paragraph 1 a person

other than an individual is a resident of both Contracting

States, the competent authorities of the Contracting States

shall endeavour to settle the question by mutual agreement.



Article 5



Permanent establishment



1. For the purposes of this Agreement, the term "permanent

establishment "means a fixed place of business through which

the business of an enterprise is wholly or partly carried on.



2. The term "permanent establishment" includes especially:



(a) a place of management;



(b) a branch;



(c) an office;



(d) a factory;



(e) a workshop; and



(f) a mine, an oil or gas well, a quarry or any other place of

extraction of natural resources.



3. A building site or construction, installation or assembly

the project constitutes a permanent establishment only if it load

more than 12 months.



4. Notwithstanding the preceding provisions of this Article,

the term "permanent establishment" shall be deemed not to

include:



(a) the use of facilities solely for the purpose of storage,

display or delivery of goods or merchandise belonging to the

Enterprise;



(b) the maintenance of a stock of goods or merchandise

belonging to the enterprise solely for the purpose of storage,

display or delivery;



(c) the maintenance of a stock of goods or merchandise

belonging to the enterprise solely for the purpose of

processing by another enterprise;



(d) the maintenance of a fixed place of business solely for the

purpose of purchasing goods or merchandise, or of collecting

information, for the enterprise;



(e) the maintenance of a fixed place of business solely for the

purpose of carrying on, for the enterprise, any other activity

of a preparatory or auxiliary character;



(f) the maintenance of a fixed place of business solely for any

combination of activities mentioned in sub paragraphs (a) to

(e), provided that the overall activity of the fixed place of

business resulting from this combination is of a preparatory or

auxiliary character.



5. An enterprise of a Contracting State shall be deemed to have

a permanent establishment in the other Contracting State if it

carries on supervisory activities in that other State for more

than six months in connection with a building site or a

construction, installation or assembly project which is being

under the ceilings in that other State.



6. Notwithstanding the provisions of paragraphs 1 and 2, where

a person-other than an agent of an independent status to whom

paragraph 7 applies-is acting in a Contracting State on

behalf of an enterprise of the other Contracting State, that

the Enterprise shall be deemed to have a permanent establishment in

the first-mentioned Contracting State in respect of any

activities which that person undertakes for the enterprise, if

such a person:



(a) has and habitually exercises in that State an authority to

conclude contracts in the name of the enterprise, unless the

activities of such a person are limited to those mentioned in

paragraph 4 which, if exercised through a fixed place of

business, would not make this fixed place of business (a)

permanent establishment under the provisions of that paragraph;

or



(b) maintains in the first-mentioned State a stock of goods or

merchandise belonging to the enterprise from which he regularly

receives and fills orders on behalf of the enterprise.



7. An enterprise of a Contracting State shall not be deemed to

have a permanent establishment in the other Contracting State

merely because it carries on business in that other State

through a broker, general commission agent or any other agent

of an independent status, provided that such persons are acting

in the ordinary course of their business.



8. The fact that a company which is a resident of a Contracting

State controls or is controlled by a company which is a

resident of the other Contracting State, or which carries on

business in that other State (whether through a permanent

establishment or otherwise), shall not of itself constitute

either company a permanent establishment of the other.



Article 6



Income from immovable property



1. Income derived by a resident of a Contracting State from

immovable property (including income from agriculture or

forestry) situated in the other Contracting State may be taxed

in that other State.



2. (a) The term "immovable property" shall, subject to the

the provisions of subparagraphs (b) and (c), have the meaning which


It has under the law of the Contracting State in which the

property in question is situated.



(b) The term "immovable property" shall in any case include

buildings, property accessory to immovable property, livestock

and equipment used in agriculture and forestry, rights to which

the provisions of general law respecting landed property apply,

usufruct of immovable property and rights to variable or fixed

payments as consideration for the working of, or the right to

work, mineral deposits, sources and other natural resources.



(c) 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, 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 and to income

from immovable property used for the performance of independent

personal services.



Article 7



Business profits



1. The profits of an enterprise of a Contracting State shall be

taxable only in that State unless the enterprise carries on

business in the other Contracting State through a permanent

establishment situated therein. If the enterprise carries on

business as aforesaid, the profits of the enterprise may be

taxed in the other State but only so much of them as is

attributable to that permanent establishment.



2. Subject to the provisions of paragraph 3, where an

Enterprise of a Contracting State 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

the same or similar conditions and dealing wholly independently

with the enterprise of which it is a permanent establishment.



3. In determining the profits of a permanent establishment,

There shall be allowed as deductions expenses including

Executive and general administrative expenses, which would be

deductible if the permanent establishment were an independent

Enterprise, insofar as they are reasonably allocable to the

permanent establishment, whether incurred in the State in which

the permanent establishment is situated or elsewhere.



4. If the information available is inadequate to determine the

profits to be attributed to a permanent establishment of an

Enterprise, nothing in this Article shall affect the

the application of any law of that State relating to the

determination of the tax liability of a person by the exercise

of a discretion or the making of an estimate, provided that the

law shall be applied, so far as the information available

permits, in accordance with the principles of this Article.



5. No profits shall be attributed to a permanent establishment

by reason of the mere purchase by that permanent establishment

of goods or merchandise for the enterprise.



6. For the purposes of the preceding paragraphs, the profits to

be attributed to the permanent establishment shall be

determined by the same method year by year unless there is good

and sufficient reason to the contrary.



7. Where profits include items of income which are dealt with

separately in other Articles of this Agreement, then the

the provisions of those Articles shall not be affected by the

the provisions of this Article.



Article 8



Shipping and air transport



1. Profits of an enterprise of a Contracting State from the

operation of ships or aircraft in international traffic shall

be taxable only in that State.



2. The provisions of paragraph 1 shall also apply to the

profits from the participation in a pool, a joint business or

an international operating agency.



Article 9



Associated enterprises



1. The Where clause



(a) an enterprise of a Contracting State 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 a

Contracting State and an enterprise of the other Contracting

State,



and in either case conditions are made or imposed between the

the two enterprises in their commercial or financial relations

which differ from those which would be made between independent

enterprises, then any 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 profits of that enterprise and taxed

accordingly.



2. Where a Contracting State includes in the profits of an

Enterprise of that State-and taxes accordingly-profits on

which an enterprise of the other Contracting State has been

charged to tax in that other State and the profits so included

are profits which would have accrued to the enterprise of the

the first-mentioned State if the conditions made between the two

enterprises had been those which would have been made between

independent enterprises, then that other State shall make an

appropriate adjustment to the amount of the tax charged therein

on those profits where that other State considers the

adjustment justified. In determining such adjustment, due

regard shall be had to the other provisions of this Agreement

and the competent authorities of the Contracting States shall

If necessary consult each other.



Article 10



Dividends



1. Dividends paid by a company which is a resident of a

Contracting State to a resident of the other Contracting State

may be taxed in that other State.



2. Dividends paid by a company which is a resident of Sweden to

a resident of Malaysia may also be taxed in Sweden according to

Swedish laws, but if the recipient is the beneficial owner of

the dividends the tax so charged shall not exceed 15 per cent.

of the gross amount of the dividends. Where, however, the

beneficial owner of the dividends is a company (other than a

partnership) which holds directly at least 10 per cent of the

voting power of the company paying the dividends, the dividends

shall be exempt from tax in Canada.



3. Dividends paid by a company which is a resident of Malaysia

to a resident of Canada who is the beneficial owner thereof

shall be exempt from any tax in Malaysia which is chargeable on

dividends in addition to the tax chargeable in respect of

the income or profits of the company.



4. The provisions of paragraphs 2 and 3 shall not affect the

taxation of the company in respect of the profits out of which

the dividends are paid.



5. The term "dividends" as used in this Article means income

from shares or other rights, not being debt-claims,

participating in profits, as well as income from other

corporate rights which is subjected to the same taxation

treatment as income from shares by the laws of the State of

which the company making the distribution is a resident.



6. The provisions of paragraphs 1, 2 and 3 shall not apply if

the beneficial owner of the dividends, being a resident of a

Contracting State, carries on business in the other Contracting

State, of which the company paying the dividends is a resident,

through a permanent establishment situated therein, or performs

in that other State independent personal services from a fixed

base situated therein, and the holding in respect of which the

dividends are paid is effectively connected with such permanent

establishment or fixed base. In such case the provisions of

Article 7 or Article 15, as the case may be, shall apply.



7. Where a company which is a resident of a Contracting State

derives income or profits from the other Contracting State,

that other State may not impose any tax on the dividends paid

by the company, except insofar as such dividends are paid to a

the resident of that other State or insofar as the holding in

respect of which the dividends are paid is effectively

connected with a permanent establishment or a fixed base

situated in that other State, nor subject the company's

undistributed profits to a tax on the company's undistributed

profits, even if the dividends paid or the undistributed

profits consist wholly or partly of income or profits arising

in such other State.



Article 11



Interest



1. Interest arising in a Contracting State and paid to a

resident 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 it arises and according to the laws of that

State, but if the beneficial owner of the interest is a

resident of the other Contracting State, the tax so charged

shall not exceed 10 per cent of the gross amount of the

interest.



3. Notwithstanding the provisions of paragraph 2, the

The Government of a Contracting State shall be exempt from tax in

the other Contracting State in respect of interest derived by

the Government from that other State.



4. For the purposes of paragraph 3, the term "Government":



(a) in the case of Malaysia means the Government of Malaysia

and shall include:



(i) the governments of the states;



(ii) the Bank Negara Malaysia;



(iii) the local authorities;



(iv) the statutory bodies; and



(v) the Export-Import Bank of Malaysia Berhad (EXIM Bank);



(b) in the case of Sweden means the Government of Canada and

shall include:



(i) the Central Bank of Sweden;



(ii) the political subdivisions;



(iii) the local authorities;



(iv) the statutory bodies;



(v) the Swedish Export Credit Corporation (SEK), to the extent

that the loan is guaranteed by the Government of Sweden; and



(vi) the Swedish International Development Authority (SIDA).



5. The term "interest" as used in this Article means income

from debt-claims of every kind, whether or not secured by


mortgage and whether or not carrying a right to participate in

the debtor's profits, and in particular, income from government

Securities and income from bonds or debentures, including

premiums and prizes attaching to such securities, bonds or

debentures. Penalty charges for late payment shall not be

regarded as interest for the purpose of this Article.



6. The provisions of paragraphs 1, 2 and 3 shall not apply if

the beneficial owner of the interest, being a resident of a

Contracting State, carries on business in the other Contracting

State in which the interest arises, through a permanent

establishment situated therein, or performs in that other State

independent personal services from a fixed base situated

therein, and the debt-claim in respect of which the interest is

paid is effectively connected with such permanent establishment

or fixed base. In such case the provisions of Article 7 or

Article 15, as the case may be, shall apply.



7. Interest shall be deemed to arise in a Contracting State

When the payer is a resident of that State. Where, however, the

the person paying the interest, whether he is a resident of a

Contracting State or not, has in a Contracting State (a)

permanent establishment or a fixed base in connection with

which the indebtedness on which the interest is paid was

incurred, and such interest is borne by such permanent

establishment or fixed base, then such interest shall be deemed

to arise in the State in which the permanent establishment or

fixed base is situated.



8. Where, by reason of a special relationship between the payer

and the beneficial owner or between both of them and some other

person, the amount of the interest, having regard to the debt-

claim for which it is paid, exceeds the amount which would have

been agreed upon by the payer and the beneficial owner in the

absence of such relationship, the provisions of this Article

shall apply only to the last-mentioned amount. In such 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 12



Royalties



1. Royalties arising in a Contracting State and paid to 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 they arise, and according to the laws of that

State, but if the beneficial owner of the royalties is a

resident of the other Contracting State, the tax so charged

shall not exceed 8 per cent of the gross amount of the

royalties.



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 copyright of literary, artistic or scientific

work (including cinematograph films, and films or tapes for

radio or television broadcasting), any patent, trade mark,

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 (know-how) concerning

industrial, commercial or scientific experience.



4. The provisions of paragraphs 1 and 2 shall not apply if the

beneficial owner of the royalties, being a resident of a

Contracting State, carries on business in the other Contracting

State in which the royalties arise, through a permanent

establishment situated therein, or performs in that other State

independent personal services from a fixed base situated

therein, and the right or property in respect of which the

the royalties are paid is effectively connected with such permanent

establishment or fixed base. In such a case the provisions of

Article 7 or Article 15, as the case may be, shall apply.



5. Royalties shall be deemed to arise in a Contracting State

When the payer is a resident of that State. Where, however, the

person paying such royalties, whether he is a resident of a

Contracting State or not, has in a Contracting State (a)

permanent establishment or a fixed base in connection with

which the liability to pay the royalties was incurred, and such

royalties are borne by such permanent establishment or fixed

base, then such royalties shall be deemed to arise in the State

in which the permanent establishment or fixed base is situated.



6. Where, by reason of a special relationship between the payer

and the beneficial owner or between both of them and some other

person, the amount of the royalties, having regard to the use,

right or information for which they are paid, exceeds the

the amount which would have been agreed upon by the payer and the

beneficial owner in the absence of such relationship, the

the provisions of this Article shall apply only to the last-

mentioned amount. In such 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 13



Fees for technical services



1. Fees for technical services arising in a Contracting State

and paid to a resident of the other Contracting State may be

taxed in that other State.



2. However, such fees for technical services may also be taxed

in the Contracting State in which they arise and according to

the laws of that State, but where the beneficial owner of the

fees for technical services is a resident of the other

Contracting State, the tax so charged shall not exceed 8 per

cent of the gross amount of the fees for technical services.



3. The term "fees for technical services" as used in this

Article means payments of any kind to any person, other than to

an employee of the person making the payments, in consideration

for any services of a technical, managerial or consultancy

nature.



4. The provisions of paragraphs 1 and 2 shall not apply if the

beneficial owner of the fees for technical services, being a

the resident of a Contracting State, carries on business in the

other Contracting State in which the fees for technical

services arise through a permanent establishment situated

therein, or performs in that other State independent personal

services from a fixed base situated therein, and the fees for

technical services are effectively connected with such

permanent establishment or fixed base. In such a case the

the provisions of Article 7 or Article 15, as the case may be,

shall apply.



5. Fees for technical services shall be deemed to arise in a

Contracting State when the payer is a resident of that State.

Where, however, the person paying the fees for technical

services, whether he is a resident of a Contracting State or

Note, has in a Contracting State a permanent establishment or a

fixed base in connection with which the liability to pay the

fees for technical services was incurred, and such fees for

technical services are borne by such permanent establishment or

fixed base, then such fees for technical services shall be

deemed to arise in the Contracting State in which the permanent

establishment or fixed base is situated.



6. Where, by reason of a special relationship between the payer

and the beneficial owner or between both of them and some other

person, the amount of the fees for technical services having

regard to the services for which they are paid, exceeds the

the amount which would have been agreed upon by the payer and the

beneficial owner in the absence of such relationship, the

the provisions of this Article shall apply only to the last-

mentioned amount. In such case, the excess part of the payments

shall remain taxable according to the law of each Contracting

State, due regard being had to the other provisions of this

Agreement.



Article 14



Capital gains



1. Gains derived by a resident of a Contracting State from the

alienation of immovable property referred to in Article 6 and

situated in the other Contracting State, or from the alienation

of shares in a company the assets of which consist principally

of such property, may be taxed in that other State.



2. Gains from the alienation of movable property forming part

of the business property of a permanent establishment which an

Enterprise of a Contracting State has in the other Contracting

State or of movable property pertaining to a fixed base

available to a resident of a Contracting State in the other

Contracting State for the purpose of performing independent

personal services, including such gains from the alienation of

such a permanent establishment (alone or with the whole

Enterprise) or of such fixed base, may be taxed in that other

State.



3. Gains derived by a resident of a Contracting State from the

alienation of ships or aircraft operated in international

traffic or movable property pertaining to the operation of such

ships or aircraft, shall be taxable only in that State.



4. Gains from the alienation of any property other than that

referred to in paragraphs 1, 2 and 3, shall be taxable only in

the Contracting State of which the alienator is a resident.



5. Notwithstanding the provisions of paragraph 4, gains from

the alienation of any property derived by an individual who has

been a resident of a Contracting State and who has become a

resident of the other Contracting State, may be taxed in the

the first-mentioned State if the alienation of the property occurs

at any time during the ten years next following the date on

which the individual has ceased to be a resident of the first-

mentioned State.



Article 15



Independent personal services



1. Income derived by a resident of a Contracting State in

respect of professional services or other activities of an

independent character shall be taxable only in that State

except in the following circumstances, when such income may

also be taxed in the other Contracting State:



(a) if he has a fixed base regularly available to him in the


other Contracting State for the purpose of performing his

activities; in that case, only so much of the income as is

attributable to that fixed base may be taxed in that other

Contracting State; or



(b) if his stay in the other Contracting State is for a period

or periods amounting to or exceeding in the aggregate 183 days

in any twelve month period commencing or ending in the calendar

year concerned; in that case, only so much of the income as is

derived from his activities performed in that other State may

be taxed in that other State.



2. The term "professional services" includes especially

independent scientific, literary, artistic, educational or

teaching activities as well as the independent activities of

physicians, lawyers, engineers, architects, dentists and

Accountants.



Article 16



Dependent personal services



1. Subject to the provisions of Articles 17, 19, 20 and 21,

salaries, wages and other similar remuneration derived by a

the resident of a Contracting State in respect of an employment

shall be taxable only in that State unless the employment is

exercised in the other Contracting State. If the employment is

so exercised, such remuneration as is derived therefrom may be

taxed in that other State.



2. Notwithstanding the provisions of paragraph 1, remuneration

derived by a resident of a Contracting State in respect of an

the employment exercised in the other Contracting State shall be

taxable only in the first-mentioned State if:



(a) the recipient is present in the other Contracting State for

a period or periods not exceeding in the aggregate 183 days in

any twelve month period commencing or ending in the calendar

year concerned; and



(b) the remuneration is paid by, or on behalf of, an employer

the who is not a resident of the other State; and



(c) the remuneration is not borne by a permanent establishment

or a fixed base which the employer has in the other State.



3. Notwithstanding the preceding provisions of this Article,

remuneration derived in respect of an employment exercised

aboard a ship or aircraft operated in international traffic by

an enterprise of a Contracting State may be taxed in that

State.



Article 17



Directors ' fees



Directors ' fees and other similar payments derived by a

the resident of a Contracting State in his capacity as a member of

the board of directors of a company which is a resident of the

other Contracting State, may be taxed in that other State.



Article 18



Artistes and sportsmen



1. Notwithstanding the provisions of Articles 15 and 16, income

derived by a resident of a Contracting State as an artiste,

such as a theatre, motion picture, radio or television artiste,

or a musician, or as a sportsman, from his personal activities

as such exercised in the other Contracting State, may be taxed

in that other State.



2. Where income in respect of personal activities exercised by

an artiste or a sportsman in his capacity as such accrues not

to the artiste or sportsman himself but to another person, that

income may, notwithstanding the provisions of Articles 7, 15

and 16, be taxed in the Contracting State in which the

the activities of the artiste or sportsman are exercised.



3. The provisions of paragraphs 1 and 2 shall not apply to

remuneration or profits derived from activities exercised in a

Contracting State if the visit to that State is directly or

indirectly supported wholly or almost wholly from the public

funds of the other Contracting State, a political subdivision,

a local authority or a statutory body thereof.



Article 19



Pensions, annuities and similar payments



1. Pensions and other similar remuneration, disbursement under

the Social Security legislation and annuities arising in a

Contracting State and paid to a resident of 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.



Article 20



Government service



1. (a) Salaries, wages and other similar remuneration, other

than a pension, paid by a Contracting State or a political

subdivision or a local authority or a statutory body thereof to

an individual in respect of services rendered to that State or

political subdivision or local authority or statutory body

thereof shall be taxable only in that State.



(b) However, such salaries, wages and other similar

remuneration, shall be taxable only in the other Contracting

State if the services are rendered in that other State and the

individual is a resident of that other State who:



(i) is a national of that other State, or



(ii) did not become a resident of that other State solely for

the purpose of rendering the services.



2. The provisions of Articles 16 and 17 shall apply to

salaries, wages and other similar remuneration in respect of

services rendered in connection with a business carried on by a

Contracting State or a political subdivision or a local

authority or a statutory body thereof.



Article 21



Students and trainees



An individual who is a resident of a Contracting State

immediately before making a visit to the other Contracting

State and is temporarily present in the other State solely:



(a) as a student at a recognised university, college, school or

other similar recognised educational institution in that other

State;



(b) as a business or technical apprentice; or



(c) as a recipient of a grant, allowances to compensate for

specific expenses or award for the primary purpose of study,

research or training from the Government of either State or

from a scientific, educational, religious or charitable

organization or under a technical assistance programme entered

into by the Government of either State, shall be exempt from

tax in that other State on:



(i) all remittances from abroad for the purposes of his

maintenance, education, study, research or training;



(ii) the amount of such grant, allowances to compensate for

specific expenses or award; and



(iii) any remuneration not exceeding 2.500 US dollars per annum

in respect of services in that other State, provided the

services are performed in connection with his study, research

or training or are necessary for the purposes of his

maintenance. The amount stated above shall include the staff

allowance for the calendar year in question.



Article 22



Other income



Items of income of a resident of a Contracting State which are

not expressly mentioned in the foregoing Articles of this

Agreement shall be taxable only in that Contracting State

except that if such income is derived from sources in the other

Contracting State, it may also be taxed in that other State.



Article 23



Elimination of double taxation



1. In the case of Malaysia, double taxation shall be avoided as

follows:



Subject to the laws of Malaysia regarding the allowance as a

credit against Malaysian tax of tax payable in any country

other than Malaysia, the Swedish tax payable under the laws of

Sweden and in accordance with this Agreement by a resident of

Malaysia in respect of income derived from Sweden shall be

allowed as a credit against Malaysian tax payable in respect of

that income. Where such income is a dividend paid by a company

which is a resident of Sweden to a company which is a resident

of Malaysia and which owns not less than 10 per cent of the

voting shares of the company paying the dividend, the credit

shall take into account Swedish tax payable by that company in

respect of its income out of which the dividend is paid. The

credit shall not, however, exceed that part of the Malaysian

the tax, as computed before the credit is given, which is

appropriate to such item of income.



2. In the case of Sweden, double taxation shall be avoided as

follows:



(a) Where a resident of Sweden derives income which under the

laws of Malaysia and in accordance with the provisions of this

Agreement may be taxed in Malaysia, Sweden shall allow-

subject to the provisions of the laws of Sweden concerning

credit for foreign tax (as it may be amended from time to time

without changing the general principle hereof)-as a deduction

from the tax on such income, an amount equal to the Malaysian

tax paid in respect of such income.



(b) Where a resident of Sweden derives income which, in

accordance with the provisions of this Agreement, shall be

taxable only in Malaysia, Sweden may, when determining the

graduated rate of Swedish tax, take into account the income

which shall be taxable only in Malaysia.



(c) Notwithstanding the provisions of sub-paragraph (a) of this

paragraph, dividends paid by a company which is a resident of

Malaysia to a company which is a resident of Sweden shall be

exempt from Swedish tax according to the provisions of Swedish

law governing the exemption of tax on dividends paid to Swedish

companies by companies abroad.



(d) For the purposes of sub-paragraph (a) of this paragraph,

When a Swedish company has a permanent establishment in

Malaysia, the term "Malaysian tax paid" shall be deemed to

include the Malaysian tax on profits attributable to such

permanent establishment which would have been paid but for any

time-limited exemption or reduction of tax granted under

incentive provisions contained in the laws of Malaysia designed

to promote economic development to the extent that such

exemption or reduction is granted for profits from industrial

or manufacturing activities or from the agriculture, forestry,

fishing or tourism sectors (including restaurants and hotels)

provided that the activities have been carried out in Malaysia.

For the purposes of sub-paragraph (c) of this paragraph a tax


of 15 per cent calculated on a Swedish tax base shall be

considered to have been paid for such activities and in the

those conditions mentioned in the previous sentence even if the

tax actually paid in Malaysia is less than 15 per cent.



(e) The provisions of sub-paragraph (d) shall apply only for

the first ten years during which this Agreement is effective.

This period may be extended by a mutual agreement between the

competent authorities.



Article 24



Non-discrimination



1. Nationals of a Contracting State shall not be subjected in

the other Contracting State to any taxation or any requirement

connected therewith which is other or more burdensome than the

taxation and connected requirements to which nationals of that

other State in the same circumstances are or may be subjected.

This provision shall, notwithstanding the provisions of Article

1, also apply to persons who are not residents of one or both

of the Contracting States.



2. The taxation on a permanent establishment which an

Enterprise of a Contracting State has in the other Contracting

State shall not be less favourably levied in that other State

than the taxation levied on enterprises of that other State

carrying on the same activities.



3. Except where the provisions of paragraph 1 of Article 9,

paragraph 8 of Article 11, paragraph 6 of Article 12 and

paragraph 6 of Article 13 apply, interest, royalties, fees for

technical services and other disbursements paid by an

Enterprise of a Contracting State to a resident of the other

Contracting State shall, for the purpose of determining the

the taxable profits of such enterprise, be deductible under the

same conditions as if they had been paid to a resident of the

the first-mentioned State. When, however, the domestic laws of a

Contracting State provide that (a) the tax shall be withheld at

source and this bond has not been ugly file led the aforesaid

requirements may be set aside.



4. Enterprises of a Contracting State, the capital of which is

wholly or partly owned or controlled, directly or indirectly,

by one or more residents of the other Contracting State, shall

not be subjected in the first-mentioned State to any taxation

or any requirement connected therewith which is other or more

burdensome than the taxation and connected requirements to

which other similar enterprises of that first-mentioned State

are or may be subjected.



5. Nothing in this Article shall be construed as obliging:



(a) a Contracting State to grant to individuals who are

resident of the other Contracting State any personal

allowances, reliefs and reductions for tax purposes on account

of civil status or family responsibilities which it grants to

its own residents;



(b) Malaysia to grant to nationals of Canada not resident in

Malaysia those personal allowances, reliefs and reductions for

tax purposes which are by law available on the date of

signature of this Agreement only to nationals of Malaysia who

are not resident in Malaysia.



6. In this Article, the term "taxation" means taxes to which

This Agreement applies.



Article 25



Mutual agreement procedure



1. Where a person considers that the actions of one or both of

the Contracting States result or will result for him in

taxation not in accordance with the provisions of this

The agreement, he may, irrespective of the remedies provided by the

the domestic law of those States, present his case to the competent

authority of the Contracting State of which he is a resident

or, if his case comes under paragraph 1 of Article 24, to that

of the Contracting State of which he is a national. The case

must be presented within three years from the first

notification of the action resulting in taxation not in

accordance with the provisions of this Agreement.



2. The competent authority shall endeavour, if the objection

appears to it to be justified and if it is not itself able to

arrive at a satisfactory solution, to resolve the case by

mutual agreement with the competent authority of the other

Contracting State, with a view to the avoidance of taxation

which is not in accordance with this Agreement. Any agreement

reached shall be implemented notwithstanding any time limits in

the domestic law of the Contracting States.



3. The competent authorities of the Contracting States shall

endeavour to resolve by mutual agreement any difficulties or

doubts arising as to the interpretation or application of this

Agreement. They may also consult together for the elimination

of double taxation in cases not provided for in this Agreement.



4. The competent authorities of the Contracting States may

communicate with each other directly for the purposes of

reaching an agreement in the sense of the preceding paragraphs.



Article 26



Exchange of information



1. The competent authorities of the Contracting States shall

Exchange such information as is necessary for carrying out the

the provisions of this Agreement or of the domestic laws of the

Contracting States concerning taxes covered by the Agreement

insofar as the taxation thereunder is not contrary to the

Agreement. The exchange of information is not restricted by

Article 1. Any information received by a Contracting State

shall be treated as secret in the same manner as information

obtained under the domestic laws of that State and shall be

disclosed only to persons or authorities (including courts and

administrative bodies) concerned with the assessment or

collection of, the enforcement or prosecution in respect of, or

the determination of appeals in relation to, the taxes covered

by the Agreement. Such persons or authorities shall use the

information only for such purposes. They may disclose the

information in public court proceedings or in judicial

decisions.



2. In no case shall the provisions of paragraph 1 be construed

so as to impose on a Contracting State the obligation:



(a) to carry out administrative measures at variance with the

the laws or the administrative practice of that or of the other

Contracting State;



(b) to supply information which are not obtainable under the

laws or in the normal course of the administration of that or

of the other Contracting State;



(c) to supply 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 27



Limitation of relief



1. Where under any provision of this Agreement any income is

relieved from tax in a Contracting State and, under the law in

force in the other Contracting State a person, in respect of

that 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 relief to be allowed under this Agreement in

the first-mentioned Contracting State shall apply only to so

much of the income as is remitted to or received in that other

Contracting State.



2. Any provision of this Agreement, conferring an exemption or a

reduction of taxes shall not apply to persons entitled to any tax

benefits below:



(a) a law of either one of the States which has been identified

in an Exchange of Notes between the States; or



(b) any other substantially similar tax law.



Article 28



Members of diplomatic missions and consular posts



Nothing in this Agreement shall affect the fiscal privileges of

members of diplomatic missions or consular posts under the

General rules of international law or under the provisions of

Special agreements.



Article 29



Entry into force



1. Each of the Contracting States shall notify the other of the

completion of the procedures required by its law for the entry

into force of this Agreement.



2. The Agreement shall enter into force on the thirtieth day

After the receipt of the later of these notifications and shall

thereupon have effect



(a) in Malaysia:



(i) in respect of Malaysian tax, other than petroleum income

tax, to tax chargeable for any year of assessment beginning on

or after the first day of January in the calendar year

following the year in which this Agreement enters into force;



(ii) in respect of petroleum income tax, to taxes chargeable for

any year of assessment beginning on or after the first day of

January of the second calendar year following the year in which

This Agreement enters into force;



(b) in Sweden:



(i) in respect of taxes withheld at source, to income derived

on or after the first day of January in the calendar year

following the year in which this Agreement enters into force;



(ii) in respect of other taxes on income, to taxes chargeable

for any tax year beginning on or after the first day of January

in the calendar year following the year in which this Agreement

enters into force.



3. The Agreement between the Government of Malaysia and the

The Government of the Kingdom of Sweden for the avoidance of double

taxation and the prevention of fiscal evasion with respect to

taxes on income signed at Kuala Lumpur on November 21, 1970,

shall terminate and cease to have effect from the dates upon

which this Agreement has effect in accordance with the

the provisions of paragraph 2 of this Article.



Article 30



Termination



This Agreement shall remain in effect indefinitely, but either

Contracting State may terminate the Agreement, through

diplomatic channels, by giving to the other Contracting State

written notice of termination on or before June 30th in any

calendar year after the period of five years from the date on

which this Agreement enters into force. In such an event this

The agreement shall cease to have effect:



(a) in Malaysia:



(i) in respect of Malaysian tax, other than petroleum income

tax, to tax chargeable for any year of assessment beginning on

or after the first day of January in the calendar year


following the year in which the notice is given;



(ii) in respect of petroleum income tax, to taxes chargeable for

any year of assessment beginning on or after the first day of

January of the second calendar year following the year in which

the notice is given;



(b) in Sweden:



(i) in respect of taxes withheld at source, to income derived

on or after the first day of January in the calendar year

following the year in which the notice is given;



(ii) in respect of other taxes on income, to taxes chargeable

for any tax year beginning on or after the first day of January

in the calendar year following the year in which the notice is

given.



In WITNESS whereof the undersigned, duly authorised thereto, by

their respective Governments, have signed this Agreement.



DONE in duplicate at Stockholm this twelfth day of March 2002,

each in the Malay, the Swedish and the English language, the

the three texts being equally authentic. In the event of there

being a dispute in the interpretation and the application of

This Agreement, the English text shall prevail.



For the Government of the Kingdom of Sweden



Leif Pagrotsky



For the Government of Malaysia



Seri Rafidah Aziz



PROTOCOL



1. At the time of signing the Agreement between the Government

of the Kingdom of Sweden and the Government of Malaysia for the

avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income, both Governments have

agreed that the following provisions shall form an integral

part of the Agreement.



2. It is understood that:



(a) with reference to Article 8, the profits derived by the air

transport consortium Scandinavian Airlines System (SAS) the

the provisions of paragraph 1 shall apply only to such part of the

profits as corresponds to the participation held in that

Consortium by SAS Sweden AB, the Swedish partner of SAS.



(b) with reference to paragraph 3 of Article 14, gains derived

by the air transport consortium Scandinavian Airlines System

(SAS) the provisions of this paragraph shall apply only to such

part of the profits as corresponds to the participation held in

that consortium by SAS Sweden AB, the Swedish partner of SAS.

and



(c) with reference to paragraph 3 of Article 16, where a

resident of Sweden derives remuneration in respect of an

the employment exercised aboard an aircraft operated in

international traffic by the air transport consortium

Scandinavian Airlines System (SAS), such remuneration shall be

taxable only in Sweden.



In WITNESS whereof the undersigned, duly authorised thereto, by

their respective Governments, have signed this Protocol.



DONE in duplicate at Stockholm this twelfth day of March 2002,

each in the Malay, the Swedish and the English language, the

the three texts being equally authentic. In the event of there

being a dispute in the interpretation and the application of

This Protocol, the English text shall prevail.



For the Government of the Kingdom of Sweden



Leif Pagrotsky



For the Government of Malaysia



Seri Rafidah Aziz



(Translation)



I have the honour to refer to the agreement between the Kingdom of

The Swedish Government and the Government of Malaysia for the avoidance of

double taxation and the prevention of fiscal evasion with respect to

taxes on income was signed today, and to propose

on behalf of the Kingdom of Sweden, with reference to

Article 27, paragraph 2:



The provisions of this Agreement shall not apply to persons

engaged in offshore work according to Labuan Offshore Activity

Business Tax Act 1990 (as amended).



"Offshore work" means offshore work as defined

under Section 2 (1) of the Labuan Offshore Business Activity Tax Act

1990 (as amended).



If this proposal is acceptable to the Government of Malaysia, I have

the honor to propose that this note and your Excellency's response on this

shall be considered as an agreement which forms an integral

part of the agreement for the avoidance of double taxation in this part,

which shall enter into force on the same date as the entry into force

of this agreement.



For the Government of the Kingdom of Sweden



Leif Pagrotsky



I have the honour to acknowledge receipt of your Excellency note by

today that is as follows.



"I have the honour to refer to the agreement between the Kingdom of

The Swedish Government and the Government of Malaysia for the avoidance of

double taxation and the prevention of fiscal evasion with respect to

taxes on income was signed today, and to propose

on behalf of the Kingdom of Sweden, with reference to

Article 27, paragraph 2:



The provisions of this Agreement shall not apply to persons

engaged in offshore work according to Labuan Offshore Activity

Business Tax Act 1990 (as amended).



"Offshore work" means offshore work as defined

under Section 2 (1) of the Labuan Offshore Business Activity Tax Act

1990 (as amended).



If this proposal is acceptable to the Government of Malaysia, I have

the honor to propose that this note and your Excellency's response on this

shall be considered as an agreement which forms an integral

part of the agreement for the avoidance of double taxation in this part,

which shall enter into force on the same date as the entry into force

of this agreement. "



The proposal above is acceptable to the Government of Malaysia, why I

have the honour to confirm that your Excellency note and this reply

shall be considered as an agreement which forms an integral

part of the agreement for the avoidance of double taxation in this part,

which shall enter into force on the same date as the entry into force

of this agreement.



For the Government of Malaysia



Seri Rafidah Aziz

Related Laws