Malaysian-German Agreement on Double TaxationEnlarge image (© German Embassy)
On 23 February 2010, Deputy Minister of Fincance II, Senator Datuk Dr. Awang Adek Hussin, and the German Ambassador, Dr. Guenter Gruber, signed the revised Malaysian-German agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (DTA).
In a statement, the Ministry of Finance said the agreement would provide for the avoidance of the incidence of double taxation on income such as business profits, dividends, interests and royalties derived in Malaysia and remitted to Germany or vice versa.
"The other main objective of the agreement is to avoid fiscal evasion with respect to taxes though mutual agreement procedures and exchange of information between the two countries," it said.
The ministry said the conclusion of this agreement would strengthen bilateral relations between the two countries in the fields of trade, investment, social and cultural affairs.
It said with the agreement would replace the previous DTA Malaysia and Germany signed on Apr 8, 1977.
"This is also the 13th agreement where Malaysia has included paragraphs four and five Article 26 (Exchange of Information) of the Organisation for Economic Co-operation and Development Model Tax Convention 2005 which enables effective exchange of information," it said.
The Double Taxation agreement entered into force on December 21, 2010 and will be applied as of January 1, 2011.