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Malaysia Brunei Double Tax Agreement

Malaysia and Brunei have recently signed a double tax agreement (DTA) to prevent double taxation and promote cross-border investment between the two countries. The agreement was signed on 23 July 2019, and it marks an important milestone in the bilateral economic relations between Malaysia and Brunei.

Double taxation occurs when a person or company is taxed twice on the same income in two different countries. This can occur when a person or company is a resident of one country but earns income from another country. Such double taxation can be a deterrent to cross-border investment and can lead to a reduction in trade and economic activity between countries.

To prevent double taxation, countries often enter into DTAs to allocate taxing rights between them. The DTA between Malaysia and Brunei aims to avoid double taxation and to provide certainty to businesses and individuals on their tax liabilities in both countries.

Under the DTA, income derived by a resident of one country from the other country will only be taxed in the country of residence. This means that if a Malaysian company earns income from Brunei, it will only be taxed in Malaysia and not in Brunei. Similarly, if a Brunei resident earns income from Malaysia, it will only be taxed in Brunei and not in Malaysia.

The DTA also includes provisions for the exchange of information between the tax authorities of the two countries. This will help to prevent tax evasion and ensure that both countries collect the correct amount of tax from their residents.

The signing of the DTA between Malaysia and Brunei is expected to promote cross-border investment and trade between the two countries. It will provide businesses and investors with greater certainty on their tax liabilities and reduce the compliance costs associated with cross-border transactions.

In conclusion, the Malaysia-Brunei double tax agreement is a significant development in the bilateral economic relations between the two countries. The agreement will help to prevent double taxation, promote cross-border investment, and reduce compliance costs for businesses and individuals. The DTA is expected to further strengthen the economic ties between Malaysia and Brunei and pave the way for greater economic cooperation in the future.


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