Malaysia is part of the DBA, which brings together countries on every continent of the world. It has also limited agreements with some other countries. There are also some countries for which ratification of a DBA with Malaysia has not yet taken place. If the person who is not an individual is established in the two contracting states, the residence is determined by the state in which his or her actual place of administration is located. If in doubt, the competent authorities of the contracting states agree on the place of residence, taking into account all relevant factors. Singapore added Malaysia to its list of double taxation conventions in 1968. The agreement was amended in 2004; These changes came into effect in 2007, both for Singapore and Malaysia. This agreement has made a significant contribution to improving trade and investment between Singapore and Malaysia. The DBA is a comprehensive document that deals with revenues from different types of sources such as corporate profits, personal income, shipping, aviation and road transport, etc. This article highlights the important provisions of the DBA between Malaysia and Singapore, its tax applicability, tax rates, the scope of the agreement and other benefits of the DBA. Malaysia`s double taxation conventions aim to create a more favourable tax environment. They are used to enable income-earning taxpayers to reduce or avoid the double taxation they would otherwise have suffered.
Some dbaBa in Malaysia also offer beneficiaries preferential tax rates. In the case of a person established in both countries, his or her tax residence is determined by the location of his permanent residence, but if permanent housing is in either country or in neither country, the centre of vital interest is taken into account. If permanent residence factors and vital factors do not determine habitual residence, habitual residence is considered and, if the person does not have a customary residence in both countries, nationality is taken into account and, if the person is a national of or is not a national of both countries, the States Parties determine the place of residence by mutual agreement. In the absence of a double taxation agreement, tax breaks can be granted by foreign tax credits. When a DBA is in effect, the available credit is the total international tax paid or Malaysian tax that is collected, depending on whether it is lower. However, if there is no DBA, the available credit is limited to half of the foreign tax paid.