Double Tax Agreement Malaysia

Double Tax Agreement Malaysia: All You Need to Know

Double Tax Agreements (DTAs) are arrangements between two countries to eliminate the issue of double taxation on the same income. DTAs are signed to ensure that income earned by individuals or companies is taxed only in the country where it is earned. Malaysia has signed numerous DTAs with other countries, and this article focuses on the Double Tax Agreement Malaysia.

What is a Double Tax Agreement?

In simple terms, a Double Tax Agreement is a treaty between two countries that aims to avoid double taxation by ensuring that income earned in one country is not taxed again in the other country. The Agreement provides a framework for deciding which country has the taxing rights on specific types of income, such as dividends, interest, and royalties.

Double Tax Agreement Malaysia Overview

Malaysia has signed over 80 DTAs with other countries to provide tax relief for their residents and businesses. The Agreement covers areas such as business profits, income from employment, pensions, and annuities, royalties, and fees for technical services. The list of countries that Malaysia has signed DTAs with includes the United States, the United Kingdom, France, Australia, and many others.

How Does Double Tax Agreement Malaysia Help Businesses and Individuals?

DTAs are beneficial to both businesses and individuals as they ensure that they do not pay double taxes on their income. For businesses, the Agreement provides a level of certainty on how their income will be taxed, which can help them plan their operations and investments. For individuals, the Agreement helps them avoid paying taxes on the same income in two countries.

For example, if a Malaysian resident receives income from a business in the United States, the income will be taxed in the United States. However, if the same individual pays taxes on that income in Malaysia, they may end up paying double tax. The DTA between Malaysia and the United States ensures that the individual will not have to pay double taxes on the same income.


Double Tax Agreement Malaysia provides a framework for taxing income earned in Malaysia by residents of other countries. The Agreement eliminates the issue of double taxation and provides certainty on how income will be taxed. Companies and individuals can benefit from DTAs as they help them avoid paying taxes on the same income in two countries. If you are doing business or earning income in Malaysia, it is essential to understand the DTA between your country and Malaysia to avoid double taxation.