Malaysia's Double Taxation Agreement Network — Treaty Rates by Country

A treaty is a ceiling, never a floor. If the domestic rate under Schedule 1 of the Income Tax Act 1967 is lower than the treaty rate, you withhold at the domestic rate. Malaysia’s domestic rates are 15 per cent on interest, 10 per cent on royalties and 10 per cent on special classes of income under s.4A, so a treaty showing 15 per cent interest buys nothing at all.

Every treaty shows NIL for dividends. That is not a negotiated concession — it follows from the single-tier system, under which Malaysia imposes no withholding tax on dividends paid to anyone.

Treaties take effect in Malaysia through an order made under s.132 and published in the Federal Gazette. The gazette reference in the last column is the instrument that gives the agreement force in Malaysian law.

Rates by country

Rates are percentages. NIL means no tax under the agreement.

Country	Dividends	Interest	Royalties	Technical fees	Treaty in force	Effective from	Gazette order
Albania	NIL	10	10	10	21 August 1995	1 January 1996	P.U.(A) 340/1994
Australia	NIL	15	10	NIL	26 June 1981	1 January 1980	P.U.(A) 347/1980
Austria	NIL	15	10	10	1 December 1990	1 January 1988	P.U.(A) 426/1989
Bahrain	NIL	5	8	10	31 July 2000	1 January 2001	P.U.(A) 439/1999
Bangladesh	NIL	15	10	10	31 December 1984	1 January 1982	P.U.(A) 113/1984
Belgium	NIL	15/10 (iv)	10	10	14 August 1975	1 January 1976	P.U.(A) 263/1976
Bosnia and Herzegovina	NIL	10	8	10	30 July 2012	1 January 2013	P.U.(A) 341/2007
Brunei	NIL	10	10	10	17 June 2010	1 January 2011	P.U.(A) 78/2010
Cambodia	NIL	10	10	10	28 December 2020	1 January 2021	P.U.(A) 377/2019
Canada	NIL	15	10	10	18 December 1980	1 January 1981	P.U.(A) 69/1977
Chile	NIL	15	10	5	25 August 2008	1 January 2009	P.U.(A) 84/2005
China	NIL	10	10	10	14 September 1986	1 January 1988	P.U.(A) 96/1986
Croatia	NIL	10	10	10	15 July 2004	1 January 2005	P.U.(A) 426/2003
Czech Republic	NIL	12	10	10	31 March 1997	9 March 1998	P.U.(A) 393/1996
Denmark	NIL	15	10	10	4 June 1971	1 January 1968	P.U.(A) 86/1971
Egypt	NIL	15	10	10	9 July 2002	1 January 2004	P.U.(A) 49/1998
Fiji	NIL	15	10	10	30 July 1997	1 January 1998	P.U.(A) 209/1996
Finland	NIL	15	10	10	23 February 1986	1 January 1988	P.U.(A) 353/1984
France	NIL	15	10	10	23 July 1976	1 January 1974	P.U.(A) 243/1975
Germany	NIL	10	7	7	21 October 2010	1 January 2011	P.U.(A) 193/2010
Hong Kong	NIL	10	8	5	28 December 2012	1 January 2013	P.U.(A) 366/2012
Hungary	NIL	15	10	10	25 December 1992	1 January 1993	P.U.(A) 425/1989
India	NIL	10	10	10	26 December 2012	1 January 2013	P.U.(A) 338/2012
Indonesia	NIL	10	10	10	11 August 1992	1 January 1987	P.U.(A) 31/1992
Iran	NIL	15	10	10	15 April 2005	1 January 2006	P.U.(A) 59/2004
Ireland	NIL	10	8	10	11 September 1999	1 January 2000	P.U.(A) 89/1999
Italy	NIL	15	10	10	18 April 1986	1 January 1977	P.U.(A) 167/1984
Japan	NIL	10	10	10	31 December 1999	1 January 2000	P.U.(A) 167/1999
Jordan	NIL	15	10	10	29 May 2000	1 January 2001	P.U.(A) 190/1999
Kazakhstan	NIL	10	10	10	20 May 2010	1 January 2011	P.U.(A) 228/2007
Korea Republic	NIL	15	10	10	2 January 1983	1 January 1983	P.U.(A) 292/1982
Kuwait	NIL	10	10	10	29 May 2007	1 January 1988	P.U.(A) 210/2006
Kyrgyz Republic	NIL	10	10	10	26 December 2006	1 January 2007	P.U.(A) 449/2000
Laos	NIL	10	10	10	23 February 2011	1 January 2012	P.U.(A) 379/2010
Lebanon	NIL	10	8	10	10 November 2004	1 January 2005	P.U.(A) 418/2003
Luxembourg	NIL	10	8	8	29 December 2004	1 January 2005	P.U.(A) 271/2003
Malta	NIL	15	10	10	1 September 2000	1 January 2002	P.U.(A) 61/1996
Mauritius	NIL	15	10	10	19 August 1993	1 January 1991	P.U.(A) 14/1993
Mongolia	NIL	10	10	10	7 November 1996	1 January 1997	P.U.(A) 397/1995
Morocco	NIL	10	10	10	29 December 2006	1 January 2007	P.U.(A) 61/2004
Myanmar	NIL	10	10	10	21 July 2008	1 January 2009	P.U.(A) 302/1999
Namibia	NIL	10	5	5	13 December 2004	1 January 2005	P.U.(A) 465/1999
Netherlands	NIL	10	8	8	2 February 1989	1 January 1986	P.U.(A) 214/1988
New Zealand	NIL	15	10	10	2 September 1976	1 January 1975	P.U.(A) 276/1976
Norway	NIL	15	10	10	9 September 1971	1 January 1968	P.U.(A) 182/1972
Pakistan	NIL	15	10	10	9 November 1982	1 January 1980	P.U.(A) 369/1982
Papua New Guinea	NIL	15	10	10	11 June 1999	1 January 2000	P.U.(A) 327/1994
Philippines	NIL	15	10	10	27 July 1984	1 January 1985	P.U.(A) 296/1982
Poland	NIL	10	8	8	12 January 2023	1 January 2024	P.U.(A) 168/2014 and P.U.(A) 78/2022
Qatar	NIL	5	8	8	28 January 2009	1 January 2010	P.U.(A) 405/2008
Romania	NIL	15	10	10	7 April 1984	1 January 1985	P.U.(A) 156/1983
Russia	NIL	10	10	10	4 July 1988	1 January 1989	P.U.(A) 58/1988
San Marino	NIL	10	10	10	28 December 2010	1 January 2011	P.U.(A) 302/2010
Saudi Arabia	NIL	5	8	8	1 July 2007	1 January 2008	P.U.(A) 225/2006
Senegal	NIL	10	10	10	1 January 2017	1 January 2017	P.U.(A) 176/2010
Seychelles	NIL	10	10	10	10 July 2006	1 January 2007	P.U.(A) 159/2004
Singapore	NIL	10	8	5	13 February 2006	1 January 2007	P.U.(A) 200/2005
Slovak Republic	NIL	10	10	5	11 April 2016	1 January 2017	P.U.(A) 256/2015
South Africa	NIL	10	5	5	6 July 2006	1 January 2007	P.U.(A) 385/2005
Spain	NIL	10	7	5	28 December 2007	1 January 2008	P.U.(A) 258/2007
Sri Lanka	NIL	10	10	10	13 August 1998	1 January 1999	P.U.(A) 491/1997
Sudan	NIL	10	10	10	18 December 2002	1 January 2002	P.U.(A) 354/1994
Sweden	NIL	10	8	8	28 January 2005	1 January 2006	P.U.(A) 272/2003
Switzerland	NIL	10	10	10	12 November 1975	1 January 1974	P.U.(A) 242/1975
Syrian Arab Republic (Syria)	NIL	10	10	10	31 August 2007	1 January 2008	P.U.(A) 197/2007
Thailand	NIL	15	10	10	2 February 1983	1 January 1983	P.U.(A) 157/1983
Türkiye	NIL	15	10	10	28 January 1997	1 January 1998	P.U.(A) 489/1996
Turkmenistan	NIL	10	10	NIL	6 October 2009	1 January 2010	P.U.(A) 218/2009
Ukraine	NIL	10	8	8	29 December 2021	1 January 2022	P.U.(A) 223/2021
United Arab Emirates	NIL	5	10	10	18 September 1996	1 January 1996	P.U.(A) 127/1996
United Kingdom	NIL	10	8	8	8 July 1998	1 January 1999	P.U.(A) 251/1997
Uzbekistan	NIL	10	10	10	10 August 1999	1 January 2000	P.U.(A) 88/1999
Venezuela	NIL	15	10	10	8 January 2008	1 January 2009	P.U.(A) 175/2007
Vietnam	NIL	10	10	10	13 August 1996	1 January 1997	P.U.(A) 60/1996
Zimbabwe	NIL	10	10	10	8 August 1996	1 January 1997	P.U.(A) 124/1995

Limited agreements and special arrangements

Counterparty	Scope	Dividends	Interest	Royalties	Technical fees
Argentina	Limited — air and sea transport	NIL	15	10	10
United States of America	Limited — air and sea transport	NIL	15	10	10
Chinese Taipei	Arrangement via the Taipei Economic and Cultural Office	NIL	10	10	7.5

A limited agreement covers only the income it names. Interest, royalties and technical fees paid to a resident of Argentina or the United States fall back to the domestic rates in the row below, because those categories are outside the scope of the agreement.

For reference, the Malaysian domestic rates against which every treaty rate should be compared:

	Dividends	Interest	Royalties	Technical fees
Malaysia domestic rate	NIL	15	10	10

Agreements signed but not yet in force

LHDN’s page also lists agreements that have been signed and are awaiting entry into force, including Belgium (signed 18 December 2009), Indonesia (19 July 2012), Kuwait (26 August 2010) and Seychelles (26 August 2010). These are protocols or replacement agreements — the earlier treaty with each of those counterparties continues to apply until the new instrument enters into force.

The Multilateral Instrument overlay

Malaysia signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting on 24 January 2018. The convention entered into force generally on 1 July 2018 and, for Malaysia’s treaties, from 1 June 2021.

The MLI does not amend a treaty the way a protocol does. It sits alongside the treaty and modifies its application. LHDN publishes a synthesised text for each modified treaty as a reading aid, and states expressly that the synthesised text is not a source of law — the authentic treaty text and the MLI itself take precedence.

Where a treaty has been modified, both parties’ MLI positions matter. The Malaysia–Japan synthesised text, for example, applies MLI Article 12 on commissionaire arrangements and MLI Article 13 on the specific activity exemptions, including the anti-fragmentation rule. A dozen or so treaties are listed on LHDN’s MLI page as not modified, either because the counterparty has not signed or because positions do not match — Bangladesh, Brunei, Cambodia, Norway, Philippines, Sri Lanka, Sudan and Switzerland among them.

Never quote a treaty article from the original text alone if the treaty appears on the modified list. Read the synthesised text, then the MLI.

How to use this table

1. Identify the income class under Malaysian law first — interest under s.109, royalty under s.109 with the s.2 definition, or special classes of income under s.4A charged by s.109B. Characterisation is domestic.
2. Compare the domestic rate with the treaty rate and apply the lower.
3. Obtain the payee’s certificate of residence from its own tax authority before applying the treaty rate. Without it, withhold at the domestic rate.
4. If the treaty is MLI-modified, check the synthesised text for the article you are relying on, particularly the principal purpose test.
5. Where relief was not applied at source, the non-resident’s remedy is a refund claim or the mutual agreement procedure, not a retrospective adjustment by the payer.

What’s next

If you are the Malaysian payer, withholding-tax-rates sets out the domestic rate, form and remittance deadline for each payment type — that is the figure you start from. If you are the Malaysian recipient of foreign income and need to prove your own residence to a treaty partner, certificate-of-residence is the application walkthrough.