The Assistant Treasurer, Senator Rod Kemp, today announced that the protocol to the Australia-Malaysia Double Taxation Agreement entered into force on 27 June 2000. This followed an exchange of notes through the diplomatic channel indicating that the necessary procedures to give the protocol the force of law had been completed in each country.
Signature of the protocol took place in Sydney on 2 August 1999. Details of the protocol were made public at that time and legislation providing for the protocol to be given the force of law in Australia - the International Tax Agreements Amendment Act 1999 - received Royal Assent on 11 November 1999.
The protocol clarifies the taxation position of fees for technical services and certain other categories of income. It also provides new tax sparing arrangements in relation to certain designated Malaysian development incentives from 1 July 1987 for a period of 5 years.
The protocol will generally have effect in Australia in relation to the tax sparing provisions for any year of income beginning on or after 1 July 1985 or 1 July 1987 (depending on the nature of the development incentives).
In respect of fees for technical services, the protocol will have effect in Australia for any year of income beginning on or after 1 July 1993. In all other cases the protocol will have effect in Australia for any year of income beginning on or after 1 July 2001.
The protocol will have effect in Malaysia in relation to the tax sparing provisions for any year of assessment beginning on or after 1 January 1988. In relation to fees for technical services, the protocol will have effect in Malaysia for any year of assessment beginning on or after 1 January 1994. In all other cases the protocol will have effect in Malaysia for any year of assessment beginning on or after 1 January 2002.
Formal notification of the entry into force of the protocol will be published in the Gazette as soon as practicable.
CANBERRA
17 August 2000
Contacts: Richard Allsop Assistant Treasurer’s Office (02) 6277 7360
Michael Lennard Australian Taxation Office (02) 6216 2611