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section 3 Have been repealed by law (2011:1410).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The repealed Constitution shall, however, continue to apply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