S.L. 123.66 Art. 2Arrangements to have effect. Malta of Double This the (1) This State, (2) The (a) in (b) in (3) apply to tax section 56 of (4) The taxes on addition to, Contracting made in their (1) In this (a) of (b) of and any area with under the within which and their State" mean any other body entity which is o

It is hereby declared:-

(a) that the arrangements specified in the Agreement set out in the Schedule to this Order have been made with Malaysia with a view to affording relief from double taxation in relation to the following taxes imposed by the laws of Malaysia:

(i) the income tax;

(ii) the supplementary income tax, that is, the development tax; and

(iii) the petroleum income tax;

(b) that it is expedient that those arrangements should have effect;

(c) that the Agreement has entered into force on the 1st September, 2000. SCHEDULE

CONVENTION BETWEEN MALTA AND MALAYSIA FOR THE AVOIDANCE OF DOUBLE TAXATION

and Malaysia, desiring to conclude an Agreement for the Avoidance Taxation, have agreed as follows: Article 1

Personal Scope Agreement shall apply to persons who are residents of one or both of Contracting States. Article 2 Taxes Covered

Agreement shall apply to taxes on income imposed by a Contracting irrespective of the manner in which they are levied.

taxes which are the subject of this Agreement are: Malaysia:

(i) the income tax;

(ii) the supplementary income tax, that is, the development tax; and

(iii) the petroleum income tax; (hereinafter referred to as "Malaysian tax'). Malta, the income tax; (hereinafter referred to as "Malta tax"). Notwithstanding the other provisions of this Article this Agreement shall not paid or payable in Malta at the rate provided for in subsection (13) of the Income Tax Act. Agreement shall also apply to any identical or substantially similar income which are imposed after the date of signature of this Agreement in or in place of, the existing taxes. The competent authorities of the State shall notify each other of important changes which have been respective taxation laws. Article 3 General Definitions

Agreement, unless the context otherwise requires: the term "Malaysia" means the territories of the Federation of Malaysia, the territorial waters of Malaysia and the sea-bed and subsoil of the territorial waters, and includes any area extending beyond the limits of the territorial waters of Malaysia, and the sea-bed and subsoil of any such area, which has been or may hereafter be designated under the laws Malaysia and in accordance with international law as an area over which Malaysia has sovereign rights for the purposes of exploring and exploiting the natural resources, whether living or non-living; the term "Malta", when used in a geographical sense, means the Island Malta, the Island of Gozo and the other islands of the Maltese archipelago, including the territorial waters thereof, outside the territorial sea of Malta which, in accordance international law, has been or may hereafter be designated, law of Malta concerning the Continental Shelf, as an area the rights of Malta with respect to the sea-bed and sub-soil natural resources may be exercised;

(c) the terms "a Contracting State" and "the other Contracting Malaysia or Malta as the context requires;

(d) the term "person" includes an individual, a company and of persons which is treated as a person for tax purposes;

(e) the term "company" means any body corporate or any treated as a body corporate for tax purposes;

(f) the terms "enterprise of a Contracting State" and "enterprise Contracting State" mean respectively an enterprise carried resident of a Contracting State and an enterprise carried on of the other Contracting State;

(g) the term "tax" means Malaysian tax or Malta tax, requires;

(h) the term "national" means:

(i) any individual possessing the citizenship of a Contracting

(ii) any legal person, partnership, association and any deriving its status as such from the laws in force in State;

(i) the term "international traffic" means any transport by a operated by an enterprise of a Contracting State, except or aircraft is operated solely between places in the other State;

(j) the term "competent authority" means:

(i) in the case of Malaysia, the Minister of Finance or representative; and

(ii) in the case of Malta, the Minister responsible for authorised representative.

(2) In the application of this Agreement by a Contracting State, defined therein shall, unless the context otherwise requires, have the it has under the laws of that State concerning the taxes to which this applies. Article 4

Resident

(1) For the purposes of this Agreement, the term "resident of State" means:

(a) in the case of Malaysia, a person who is resident in Malaysia purposes of Malaysian tax; and

(b) in the case of Malta, a person who is resident in Malta for of Malta tax.

(2) Where by reason of the provisions of paragraph 1 an individual of both Contracting States, then his status shall be determined in accordance following rules: shall be deemed to be a resident solely of the State in which he has a permanent home available to him. If he has a permanent home available him in both States, he shall be deemed to be a resident solely of the State with which his personal and economic relations are closer (centre vital interests); the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident solely of the State in which he has an habitual abode; he has an habitual abode in both States or in neither of them, he shall deemed to be a resident solely of the State of which he is a national; he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. by reason of the provisions of paragraph 1, a person other than an a resident of both Contracting States, then it shall be deemed to be a of the State in which its place of effective management is situated.

Article 5 Permanent Establishment the purposes of this Agreement, the term "permanent establishment" place of business through which the business of an enterprise is partly carried on. term "permanent establishment" shall include especially: place of management; branch; office; factory; workshop; mine, an oil or gas well (including an offshore drilling site), a quarry any other place of extraction of natural resources including timber or other forest produce; farm or plantation; building site or construction, installation or assembly project which exists for more than 12 months.

Notwithstanding the preceding provisions of this Article, the term establishment" shall be deemed not to include:

the use of facilities solely for the purpose of storage, display or delivery goods or merchandise belonging to the enterprise; the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or for collecting information, for the enterprise;

(e) the maintenance of a fixed place of business solely for carrying on, for the enterprise, any other activity of a auxiliary character.

(4) An enterprise of a Contracting State shall be deemed to have establishment in the other Contracting State if:

(a) it carries on supervisory activities in that other State for months in connection with a construction, installation project which is being undertaken in that other State; or

(b) substantial equipment is in that other State being used for or under contract with, the enterprise.

(5) A person (other than a broker, general commission agent or any of an independent status to whom paragraph 6 applies) acting in a Contracting on behalf of an enterprise of the other Contracting State shall be deemed permanent establishment in the first-mentioned State, if:

(a) he has, and habitually exercises in the first-mentioned authority to conclude contracts in the name of the enterprise, activities are limited to the purchase of goods or merchandise enterprise; or

(b) he maintains in the first-mentioned State a stock merchandise belonging to the enterprise from which he orders on behalf of the enterprise; or

(c) he manufactures or processes in the first-mentioned enterprise goods or merchandise belonging to the enterprise.

(6) An enterprise of a Contracting State shall not be deemed permanent establishment in the other Contracting State merely because business in that other State through a broker, general commission agent agent of an independent status, where such persons are acting in the ordinary of their business.

However, when the activities of such an agent are devoted wholly wholly on behalf of that enterprise, he shall not be considered independent status if the transactions between the agent and the enterprise made under arm’s length conditions.

(7) The fact that a company which is a resident of a Contracting or is controlled by a company which is a resident of the other Contracting which carries on business in that other State (whether through establishment or otherwise), shall not of itself constitute either permanent establishment of the other. Article 6 Income from Immovable Property

(1) Income derived by a resident of a Contracting State from property situated in the other Contracting State may be taxed in that other

(2) For the purposes of this Agreement, the term "immovable property" defined in accordance with the laws of the Contracting State in which question is situated. The term shall in any case include property immovable property, livestock and equipment used in agriculture and to which the provisions of general law respecting landed property apply, immovable property and rights to variable or fixed payments as consideration working of, or the right to work, mineral deposits, oil or gas wells drilling site), quarries and other places of extraction of natural resources timber or other forest produce. Ships, boats and aircraft shall not be immovable property.

provisions of paragraph 1 shall apply to income derived from the direct use in any other form of immovable property.

provisions of paragraphs 1 and 3 shall also apply to the income from property of an enterprise and to income from immovable property used performance of independent personal services. Article 7

Business Profits profits of an enterprise of a Contracting State shall be taxable only in unless the enterprise carries on business in the other Contracting State permanent establishment situated therein. If the enterprise carries on aforesaid, the profits of the enterprise may be taxed in the other State but much thereof as is attributable to that permanent establishment. Subject to the provisions of paragraph 3, where an enterprise of a State carries on business in the other Contracting State through a establishment situated therein, there shall in each Contracting State be that permanent establishment the profits which it might be expected to were a distinct and separate enterprise engaged in the same or similar under the same or similar conditions and dealing wholly independently enterprise of which it is a permanent establishment. determining the profits of a permanent establishment, there shall be deductions expenses including executive and general administrative which would be deductible if the permanent establishment were an enterprise, insofar as they are reasonably allocable to the permanent whether incurred in the State in which the permanent establishment is elsewhere. information available to the competent authority is inadequate to profits to be attributed to the permanent establishment of an nothing in this Article shall affect the application of any law of that State determination of the tax liability of a person by the exercise of a the making of an estimate by the competent authority, provided that the applied, so far as the information available to the competent authority accordance with the principle of this Article. profits shall be attributed to a permanent establishment by reason of the by that permanent establishment of goods or merchandise for the purposes of the preceding paragraphs, the profits to be attributed to establishment shall be determined by the same method year by year good and sufficient reason to the contrary.

profits include items of income which are dealt with separately in of this Agreement, then the provisions of those Articles shall not be provisions of this Article. Article 8

Shipping and Air Transport derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

(2) Paragraph 1 shall also apply to the share of the profits from the ships or aircraft derived by a resident of a Contracting State through a pool, a joint business or an international operating agency.

(3) Notwithstanding the other provisions of this Article, profits operation of a ship in international traffic derived by a company which of Malta having more than 25 per cent of its capital owned, directly or persons not residents of Malta, may be taxed in Malaysia unless the company that the profits derived from the operation of such ship are subject without regard to any relief therefrom as provided for in section 86 of Shipping Act (Cap. 234) or in any identical or similar provision. Article 9

Associated Enterprises Where -

(a) an enterprise of a Contracting State participates directly the management, control or capital of an enterprise Contracting State, or

(b) the same persons participate directly or indirectly in the control or capital of an enterprise of a Contracting enterprise of the other Contracting State, and in either case conditions are made or imposed between the two their commercial or financial relations which differ from those which between independent enterprises, then any profits which would, conditions, have accrued to one of the enterprises, but, by reason of those have not so accrued, may be included in the profits of that enterprise accordingly. Article 10 Dividends

(1) Dividends paid by a company which is a resident of a Contracting resident of the other Contracting State may be taxed in that other State.

(2) Dividends paid by a company which is a resident of Malaysia Malta who is the beneficial owner thereof shall be exempt from any tax which is chargeable on dividends in addition to the tax chargeable in income of the company. Nothing in this paragraph shall affect the provisions Malaysian law under which the tax in respect of a dividend paid by a company is a resident of Malaysia from which Malaysian tax has been, or has deducted may be adjusted by reference to the rate of tax appropriate to year of assessment immediately following that in which the dividend

(3) (a) Dividends paid by a company which is a resident of Malta of Malaysia who is the beneficial owner thereof may be Malta tax on the gross amount of such dividends, but the shall not exceed that chargeable on the profits out dividends are paid.

(b) Where such dividends are paid out of profits of a company subject to tax at a reduced rate of tax under special provisions to promote investments necessary for the economic development Malta, the rate of Malta tax on the dividends shall not reduced rate. term ''dividends'' as used in this Article means income from shares or not being debt-claims, participating in profits, as well as income from corporate rights which is subjected to the same taxation treatment as income the laws of the State of which the company making the distribution is provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial dividends, being a resident of a Contracting State, carries on business Contracting State, of which the company paying the dividends is a through a permanent establishment situated therein, and the holding in which the dividends are paid is effectively connected with such permanent In such case, the provisions of Article 7 shall apply.

a company which is a resident of a Contracting State derives income the other Contracting State, that other State may not impose any tax dividends paid by the company to persons who are not residents of that other subject the company’s undistributed profits to a tax on undistributed profits, dividends paid or the undistributed profits consist wholly or partly of profits arising in that other State. Article 11

Interest Interest arising in a Contracting State and paid to a resident of the other State may be taxed in that other State. However, such interest may be taxed in the Contracting State in which it according to the laws of that State, but if the recipient is the beneficial interest, the tax so charged shall not exceed 15 per cent of the gross interest. Notwithstanding the provisions of paragraph 2, interest to which a resident beneficially entitled shall be exempt from Malaysian tax if the loan or indebtedness in respect of which the interest is paid is an approved loan as section 2(1) of the Income Tax Act, 1967 of Malaysia (as amended).

Notwithstanding the provisions of paragraphs 2 and 3, the Government of a State shall be exempt from tax in the other Contracting State in respect derived by the Government from that other State. purposes of paragraph 4, the term "Government':

the case of Malaysia means the Government of Malaysia and shall include:

(i) the government of the States;

(ii) the local authorities;

(iii) the statutory bodies;

(iv) the Bank Negara Malaysia;

(v) such institutions, the capital of which is wholly owned by the Government of Malaysia or the governments of the States, or the local authorities or the statutory bodies thereof, as may be agreed upon from time to time between the competent authorities of the Contracting States; the case of Malta means the Government of Malta and shall include:

(i) the Central Bank of Malta;

(ii) the Malta Development Corporation;

(iii) the statutory bodies;

(iv) such institutions, the capital of which is wholly Government of Malta, as may be agreed upon from between the competent authorities of the Contracting

(6) The term "interest' as used in this Article means income from every kind, whether or not secured by mortgage, and whether or not carrying to participate in the debtor's profits, and in particular, income from securities and income from bonds or debentures.

(7) The provisions of paragraphs 1, 2 and 3 shall not apply if owner of the interest, being a resident of a Contracting state, carries the other Contracting State in which the interest arises, through establishment situated therein and the debt-claim in respect of which paid is effectively connected with such permanent establishment. In such provisions of Article 7 shall apply.

(8) Interest shall be deemed to arise in a Contracting State when that State itself, a political subdivision, a local authority or a statutory or a resident of that State. Where, however, the person paying the interest, he is a resident of a Contracting State or not, has in a Contracting State establishment in connection with which the indebtedness on which paid was incurred, and such interest is borne by such permanent establishment, such interest shall be deemed to arise in the State in which the establishment is situated.

(9) Where, by reason of a special relationship between the beneficial owner or between both of them and some other person, the interest paid, having regard to the debt-claim for which it is paid, amount which would have been agreed upon by the payer and the beneficial the absence of such relationship, the provisions of this Article shall apply last-mentioned amount. In such a case, the excess part of the payment taxable according to the laws of each Contracting State, due regard being other provisions of this Agreement. Article 12

Royalties

(1) Royalties arising in a Contracting State and paid to a resident Contracting State may be taxed in that other State.

(2) However such royalties may also be taxed in the Contracting they arise, and according to the laws of that State, but if the recipient beneficial owner of the royalties, the tax so charged shall not exceed the gross amount of the royalties.

(3) The term "royalties' as used in this Article means payments the extent to which they are paid as consideration for:

(a) the use of, or the right to use, any

(i) copyright, patent, design or model, plan, secret process, trade mark, or other like property or right;

(ii) industrial, commercial or scientific equipment; or

(iii) cinematograph film or tape for radio or television broadcasting;

(b) the supply of scientific, technical, industrial or commercial or information;

(c) the supply of any assistance that is ancillary and subsidiary furnished as a means of enabling the application or enjoyment of, any such property or right as is mentioned in subparagraph (a)(i), any such equipment as is mentioned in subparagraph (a)(ii), or any such knowledge or information as is mentioned in subparagraph (b). provisions of paragraphs 1 and 2 shall not apply if the beneficial owner royalties, being a resident of a Contracting State, carries on business in the Contracting State in which the royalties arise through a permanent situated therein and the right or property in respect of which the paid is effectively connected with such permanent establishment. In the provisions of Article 7 shall apply. Royalties shall be deemed to arise in a Contracting State when the payer is itself, a political subdivision, a local authority or a statutory body thereof, of that State. Where, however, the person paying such royalties, a resident of a Contracting State or not, has in a Contracting State a establishment in connection with which the obligation to pay the royalties and such royalties are borne by such permanent establishment, then shall be deemed to arise in the State in which the permanent is situated. by reason of a special relationship between the payer and the owner or between both of them and some other person, the amount of the or credited, having regard to the use, right or information for which or credited, exceeds the amount which would have been agreed upon and the beneficial owner in the absence of such relationship, the this Article shall apply only to the last-mentioned amount. In such a excess part of the royalties paid or credited shall remain taxable according each Contracting State, due regard being had to the other provisions of Agreement.

Article 13 Technical fees Technical fees arising in a Contracting State which are derived by a resident Contracting State may be taxed in that other State. However, such technical fees may also be taxed in the Contracting State in arise, and according to the laws of that State; but if the recipient is a owner of the technical fees, the tax so charged shall not exceed 10 per cent amount of the technical fees.

term "technical fees" as used in this Article means payments of any kind other than to an employee of the person making the payments, in for any services of a technical, managerial or consultancy nature. provisions of paragraph 1 and 2 of this Article shall not apply if the owner of the technical fees, being a resident of a Contracting State, carries the other Contracting State in which the technical fees arise through a establishment situated therein, or performs in that other State independent services, and the technical fees are effectively connected with such establishment or such services. In such case, the provisions of Article 7 or the case may be, shall apply.

Technical fees shall be deemed to arise in a Contracting State when the State itself, a political subdivision, a local authority or a statutory body resident of that State. Where, however, the person paying the technical he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the obligation technical fees was incurred, and such technical fees are borne by that establishment, then such technical fees shall be deemed to arise in the State in which the permanent establishment is situated.

(6) Where, by reason of a special relationship between the recipient or between both of them and some other person, the technical fees paid exceeds, for whatever reason, the amount which would agreed upon by the payer and the beneficial owner in the absence relationship, the provisions of this Article shall apply only to the amount. In such case, the excess part of the payments shall remain taxable to the law of each Contracting State due regard being had to the other this Agreement. Article 14

Alienation of property

(1) Income or gains from the alienation of immovable property, paragraph 2 of Article 6, may be taxed in the Contracting State property is situated.

(2) Income or gains from the alienation of movable property forming business property of a permanent establishment which an enterprise of State has in the other Contracting State or of movable property resident of a Contracting State in the other Contracting State for performing professional services, including such income or gains from of such a permanent establishment (alone or together with the whole enterprise) be taxed in that other State. However, income or gains from the alienation aircraft operated by an enterprise of a Contracting State in international movable property pertaining to the operation of such ships or aircraft taxable only in the State of which the enterprise is a resident.

(3) Income or gains from the alienation of shares of a company, which consists principally of immovable property situated in a Contracting may be taxed in that State. Income or gains from the alienation of partnership or a trust, the property of which consists principally property situated in a Contracting State, may be taxed in that State.

(4) Income or gains from the alienation of any property or assets, those mentioned in paragraphs 1, 2 and 3 of this Article, shall be taxable Contracting State of which the alienator is a resident.

Article 15 Independent personal services

(1) Subject to the provisions of Article 13, income derived by Contracting State in respect of professional services or other independent of a similar character shall be taxable only in that State. However, if derived from the other Contracting State it may be taxed in that other

(a) his stay in that other State is for a period or periods amounting exceeding in the aggregate 183 days during any calendar

(b) the remuneration for his services in that other State is from residents of that State or borne by a permanent which the person paying the remuneration has in that State case it exceeds the equivalent in the currency of that thousand U.S. dollars (US $5,000) during the calendar year. term "professional services" includes, especially, independent literary, artistic, educational or teaching activities as well as the activities of physicians, lawyers, engineers, architects, dentists and

Article 16

Dependent personal services Subject to the provisions of Articles 17, 19, 20, 21 and 22, salaries, wages similar remuneration derived by a resident of a Contracting State in respect employment shall be taxable only in that State unless the employment is the other Contracting State. If the employment is so exercised, such as is derived therefrom may be taxed in that other State. Notwithstanding the provisions of paragraph 1, remuneration derived by a Contracting State in respect of an employment exercised in the other State shall be taxable only in the first-mentioned State if:

the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the calendar year concerned; and the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and the remuneration is not borne by a permanent establishment which the employer has in the other State. Notwithstanding the preceding provisions of this Article, remuneration in employment exercised on board a ship or aircraft operated in traffic by an enterprise of a Contracting State may be taxed in that

Article 17

Directors’ fees Directors’ fees and similar payments derived by a resident of a Contracting capacity as a member of the board of directors, or other comparable body described, of a company which is a resident of the other Contracting State in that other State. Article 18

Artistes and athletes Notwithstanding the provisions of Articles 15 and 16, income derived by a Contracting State as an entertainer, such as a theatre, motion picture, television artiste, or a musician, or as an athlete, from his personal activities exercised in the other Contracting State, may be taxed in that other State. income in respect of personal activities exercised by an entertainer or his capacity as such accrues not to the entertainer or athlete himself but person, that income may, notwithstanding the provisions of Articles 7, 15 taxed in the Contracting State in which the activities of the entertainer or exercised. provisions of paragraphs 1 and 2 shall not apply to remuneration or from activities exercised in a Contracting State if the visit to that directly or indirectly supported wholly or substantially from the public funds Contracting State, a political subdivision, a local authority or a statutory

Article 19 Pensions and annuities

(1) Subject to the provisions of paragraph 2 of Article 20, any other similar remuneration for past employment or any annuity Contracting State and paid to a resident of the other Contracting taxable only in that other State.

(2) Pensions and other payments made under the social security Contracting State shall be taxable only in that State.

(3) The term "annuity" includes a stated sum payable periodically times, during life or during a specified or ascertainable period of obligation to make the payments in return for adequate and full consideration money or money's worth. Article 20

Government service

(1) (a) Remuneration, other than a pension, paid by a Contracting political subdivision or a local authority or a statutory body any individual in respect of services rendered to that State subdivision or a local authority or statutory body thereof taxable only in that State.

(b) However, such remuneration shall be taxable only Contracting State if the services are rendered in that individual is a resident of that State who:

(i) is a national of that State, or

(ii) did not become a resident of that State solely for performing the services.

(2) Any pension paid by, or out of funds created by, a Contracting political subdivision or a local authority or a statutory body thereof to in respect of services rendered to that State or political subdivision or or a statutory body thereof shall be taxable only in that State.

(3) The provisions of Articles 16, 17 and 19 shall apply to remuneration pensions in respect of services rendered in connection with any trade carried on by a Contracting State or a political subdivision or a local statutory body thereof. Article 21 Students and trainees

An individual who is a resident of a Contracting State immediately a visit to the other Contracting State and is temporarily present in solely:

(a) as a student at a recognised university, college, school or recognised educational institution in that other State;

(b) as a business or technical apprentice; or

(c) as a recipient of a grant, allowance or award for the primary study, research or training from the government of either scientific, educational, religious or charitable organisation technical assistance programme entered into by the Government either State, exempt from tax in that other State on: remittances from abroad for the purposes of his maintenance, education, study, research or training; the amount of such grant, allowance or award; and any remuneration not exceeding the equivalent in the currency of that other State of two thousand U.S. dollars (US $2,000) in respect of services in that other State provided the services are performed in connection with his study, research or training or are necessary for the purposes of his maintenance. Article 22 Teachers and researchers individual who is a resident of a Contracting State immediately before to the other Contracting State, and who, at the invitation of any college, school or other similar educational institution, visits that other period not exceeding two years solely for the purpose of teaching or both at such educational institution shall be exempt from tax in that other remuneration for such teaching or research or both. Article shall not apply to income from research if such research is primarily for the private benefit of a specific person or persons. Article 23

Income not expressly mentioned of income of a resident of a Contracting State which are not expressly the foregoing Articles of this Agreement shall be taxable only in that State except that if such income is derived from sources in the other State, it may also be taxed in that other State. Article 24

Elimination of double taxation Subject to the laws of Malaysia regarding the allowance as a credit against of tax payable in any country other than Malaysia, Malta tax payable of Malta and in accordance with this Agreement by a resident of respect of income derived from Malta shall be allowed as a credit Malaysian tax payable in respect of that income. The credit shall not, exceed that part of the Malaysian tax, as computed before the credit is is appropriate to such item of income. the purposes of paragraph 1, the term "Malta tax payable" shall be include the amount of Malta tax which would, under the laws of Malta accordance with this Agreement, have been payable on any income derived in Malta had the income not been taxed at a reduced rate or exempted in accordance with: the Aids to Industries Ordinance, 1959 and Industrial Development Act, 1988 in so far as they were in force on, and have not been modified since, the date of signature of this Agreement or have been modified only in minor respects so as not to affect their general character; or any other provisions which may subsequently be introduced in Malta in modification of or in addition to, the existing special incentive laws so as they are agreed by the competent authorities of the Contracting States to be of a substantially similar character.

(3) Subject to the laws of Malta regarding the allowance as a Malta tax of tax payable in any country other than Malta, Malaysian under the laws of Malaysia and in accordance with this Agreement by Malta in respect of income derived from Malaysia shall be allowed against the Malta tax payable in respect of that income. The credit however, exceed that part of the Malta tax, as computed before the which is appropriate to such item of income.

(4) For the purposes of paragraph 3, the term "Malaysian tax payable" deemed to include Malaysian tax which would, under the laws of Malaysia accordance with this Agreement, have been payable on any income sources in Malaysia had the income not been taxed at a reduced rate from Malaysian tax in accordance with:

(a) the Income Tax Act, 1967 and the Promotion of Investment so far as they were in force on, and have not been modified date of signature of this Agreement or have been modified respects so as not to affect their general character; or

(b) any other provisions which may subsequently be introduced in modification of, or in addition to, the investment incentives far as they are agreed by the competent authorities of the States to be of a substantially similar character; and

(c) interest to which paragraph 3 of Article 11 applies had that been exempted from Malaysian tax in accordance with that

(5) For the purposes of paragraph 3, where royalties derived by Malta are, as film rentals, subject to cinematograph film-hire duty in duty shall be deemed to be Malaysian tax. Article 25 Non-discrimination

(1) The nationals of a Contracting State shall not be subjected Contracting State to any taxation or any requirement connected therewith other or more burdensome than the taxation and connected requirements nationals of that other State in the same circumstances are or may be

(2) The taxation on a permanent establishment which an enterprise Contracting State has in the other Contracting State shall not be less levied in that other State than the taxation levied on enterprises of that carrying on the same activities.

(3) Enterprises of a Contracting State, the capital of which is wholly owned or controlled, directly or indirectly, by one or more residents Contracting State, shall not be subjected in the first-mentioned State or any requirement connected therewith which is other or more burdensome taxation and connected requirements to which other similar enterprises mentioned State are or may be subjected.

(4) Nothing in this Article shall be construed as obliging:

(a) a Contracting State to grant to individuals who are resident Contracting State any personal allowances, reliefs and tax purposes on account of civil status, family responsibilities other personal circumstances which it grants to its own residents;

(b) Malaysia to grant to nationals of Malta not resident in personal allowances, reliefs and reductions for tax purposes by law available on the date of signature of this Agreement nationals of Malaysia who are not resident in Malaysia. Article, the term "taxation" means taxes to which this Agreement

Article 26

Mutual agreement procedure a resident of a Contracting State considers that the actions of one or Contracting States result or will result for him in taxation not in with this Agreement, he may, notwithstanding the remedies provided by laws of those States, present his case to the competent authority of the he is a resident or, if his case comes under paragraph 1 of Article 25, State of which he is a national. The case must be presented within three first notification of the action resulting in taxation not in accordance provisions of this Agreement. competent authority shall endeavour, if the objection appears to be it is not itself able to arrive at an appropriate solution, to resolve the mutual agreement with the competent authority of the other Contracting view to the avoidance of taxation which is not in accordance with this Any agreement reached shall be implemented notwithstanding any time domestic law of the Contracting States.

competent authorities of the Contracting States shall endeavour to mutual agreement any difficulties or doubts arising as to the or application of this Agreement. They may also consult together for of double taxation in cases not provided for in this Agreement. competent authorities of the Contracting State may communicate with directly for the purpose of reaching an agreement in the sense of the paragraphs.

Article 27 Exchange of information competent authorities of the Contracting States shall exchange such is necessary for carrying out the provisions of this Agreement for the detection of evasion or avoidance of taxes covered by this Agreement. information so exchanged shall be treated as secret and shall be disclosed only or authorities (including a Court or reviewing authority) concerned assessment, collection, enforcement or prosecution in respect of, or the of appeals in relation to the taxes which are the subject of this Such persons or authorities shall use the information only for such They may disclose the information in public court proceedings or in decisions.

case shall the provisions of paragraph 1 be construed so as to impose Contracting State the obligation:

carry out administrative measures at variance with the laws or the administrative practice of that or of the other State; supply particulars which are not obtainable under the laws or in the normal course of the administration of that or of the other State; supply information which would disclose any trade, business, industrial, commercial or professional secret, trade process or information the disclosure of which would be contrary to public policy. Article 28 Diplomatic and consular officials

Nothing in this Agreement shall affect the fiscal privileges of consular officials under the general rules of international law or under of special agreements. Article 29

Entry into force

(1) The Governments of the Contracting States shall notify each constitutional requirements for the entry into force of this Agreement complied with.

(2) The Agreement shall enter into force thirty days after the date the notifications referred to in paragraph 1 of this Article and its provisions have effect in respect of taxes for any year of assessment beginning January 1st in the second calendar year following the year in which enters into force.

Article 30 Termination This Agreement shall remain in effect indefinitely, but either State may terminate the Agreement, through diplomatic channels, by other Contracting State written notice of termination on or before June calendar year beginning after the expiration of a period of five years from its entry into force. In such an event the Agreement shall cease to respect of taxes for the year of assessment beginning on January 1st calendar year next following the year in which the notice is given and years of assessment. IN WITNESS WHEREOF the undersigned, duly authorised thereto, respective Governments, have signed this Agreement. DONE in duplicate at Kingston, Jamaica this 3rd day of October in Bahasa Malaysia and the English language, both texts being equally

For the Government of Malaysia For the Government of Wong see Wah John Dalli Deputy Minister of Finance Minister of Finance

PROTOCOL

(1) At the time of signing the Agreement between the Government and the Government of Malta for the avoidance of Double Taxation Prevention of Fiscal Evasion with respect to Taxes on Income, both have agreed that the following provisions shall form an integral Agreement:

(2) In connection with Article 7 "Business Profits": Nothing in this Agreement shall affect the operation of State relating to the taxation of income or profits from any insurance provided that if the relevant law in force in either Contracting State at the signature of this Agreement is amended (otherwise than in minor respects so its general character) the States shall consult with each other with a agreeing to any amendment of this paragraph that may be appropriate. connection with Article 10 "Dividends": the Malta law in force, income tax paid by a company, as is referable its profits which is distributed by way of dividends, is assimilated with income tax of the shareholder in receipt of such a dividend. In the hands the dividend is charged to tax gross and the relevant amount of assimilated, is set off against the shareholder's tax liability on his income sources liable to tax. connection with paragraph 4 of Article 13 "Technical Fees' it is that where paragraph 1 (a) or (b) of Article 15 is applicable, the Article 15 shall apply.

WITNESS WHEREOF the undersigned, duly authorised thereto, by their Governments, have signed the Protocol.

in duplicate at Kingston, Jamaica this 3rd day of October 1995, each Bahasa Malaysia language, both texts being equally authentic.

Government of Malaysia For the Government of Malta Wah John Dalli

Minister of Finance Minister of Finance