The Assistant Treasurer, Senator Rod Kemp, today announced that an exchange of Letters extending the application of the tax sparing provisions in the comprehensive taxation agreement between Australia and Malaysia took place in Canberra yesterday, 9 November 1999.
The Letters also entered into force on the same day.
The comprehensive taxation agreement between Australia and Malaysia contains tax sparing relief provisions which apply in relation to certain income derived by Australian residents that Malaysia exempts or taxes at a reduced rate under special incentive measures to promote economic development in Malaysia.
The agreement provides for such relief by treating as paid for tax credit purposes the tax forgone by Malaysia under specified development incentive provisions of its law up to the end of the 1983-84 year of income.
In 1986 the Malaysian Government introduced some new tax incentives in its tax incentive legislation.
The Letters ensure that the tax sparing provisions in the agreement reflect the changes made to the Malaysian tax incentive legislation and also extend the operation of the tax sparing provisions in the agreement until the end of the 1986-87 year of income.
Thereafter the amendments contained in the recently signed Protocol with Malaysia will operate to provide new tax sparing arrangements in relation to certain designated Malaysian development incentives for an additional five year period.
Copies of the Letters are available at offices of the Australian Taxation Office (ATO) and can also be accessed via the ATO's internet site at: www.ato.gov.au under the heading What's New.
MELBOURNE
10 November 1999
Media contacts:
Ken Allen Australian Taxation Office 02 6216 1155
Matthew Guy Assistant Treasurers Office 03 9650 7274