India Malaysia Double Taxation Avoidance Agreement

India Malaysia Double Taxation Avoidance Agreement

In addition to a mechanism for the exchange of banking information for the tax administration, the new agreement also contains a limitation clause on benefits, a provision to combat abuse. The double taxation convention is a convention signed by two countries. The agreement is signed to make a country an attractive tourist destination and allow NGOs to get rid of the multiple payment of taxes. The DTAA does not mean that NRA can avoid taxes altogether, but it does mean that NRA can avoid higher taxes in both countries. DTAA allows an NRA to reduce its tax impact on income generated in India. DTAA also reduces cases of tax evasion. One of the new features of the deal is that it provides for a corresponding transfer pricing adjustment in the other country, said Amit Maheshwari, partner, Ashok Maheshwary &Associates, an audit firm. With regard to the elimination of double taxation, India applies a deduction, while Malaysia would use a credit method. Both countries also offer a tax-saving credit.

THE INIs can avoid the payment of double taxation under the double taxation convention. Previously, this facility did not exist, which led to double taxation. The new agreement, signed in May, will enter into force in India from 1 April. In the case of Malaysia, it entered into force on 1 January. INIs can avoid the payment of double taxation under the Double Tax Avoidance Agreement (DBAA). Normally, non-resident Indians (NRIs) live abroad, but earn income in India. .


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