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Double Tax Treaties and Withholding Tax Rates

Withholding tax is a method of collecting taxes from non-residents who have derived income which is subject to Malaysian tax. Any tax resident person who is liable to make certain specified types of payments to a non-resident is required to deduct withholding tax at a prescribed rate applicable to the gross payment and remit it to the Malaysian IRB within one month of paying or crediting.

Payments subject to Withholding Tax

Rates (%)*

Interest

15

Royalties

10

Dividends

Nil

Contract payments (services rendered in Malaysia)

  • Contractor’s liability
  • Employees’ liability

 

10

3

Special classes of income

  • Advice, assistance or services rendered in Malaysia
  • Rental of movable properties

10

Section 4(f) gains or profits

  • Other income not of a business / employment source

10

* A reduced rate may be provided under the double tax agreement with certain treaty partners

The following countries have concluded double tax treaties with Malaysia:

Treaty countries

Rate of withholding tax %

Interest

Royalties

Technical Fees

Albania

10 or Nil

10

10

Australia

15 or Nil

10 or Nil

Nil

Austria

15 or Nil

10

10

Bahrain

5 or Nil

8

10

Bangladesh

15 or Nil

10 or Nil

10

Belgium

10 or 15 or Nil

10

10

Bosnia & Herzegovina

10 or Nil

8

10

Brunei

10 or Nil

10

10

Cambodia1 10 or Nil 10 10

Canada

15 or Nil

10 or Nil

10

Chile

15 or Nil

10

5

China, People’s Republic

10 or Nil

10

10

Croatia

10 or Nil

10

10

Czech Republic

12 or Nil

10

10

Denmark

15 or Nil

10

10

Egypt

15 or Nil

10

10

Fiji

15 or Nil

10

10

Finland

15 or Nil

10 or Nil

10

France

15 or Nil

10 or Nil

10

Germany

10 or Nil

7

7

Hong Kong

10 or Nil

8

5

Hungary

15 or Nil

10

10

India

10 or Nil

10

10

Indonesia

10 or Nil

10

10

Iran

15 or Nil

10

10

Ireland

10 or Nil

8

10

Italy

15 or Nil

10 or Nil

10

Japan

10 or Nil

10

10

Jordan

15 or Nil

10

10

Kazakhstan

10 or Nil

10

10

Korea Republic

15 or Nil

10 or Nil

10

Kuwait

10 or Nil

10

10

Kyrgyz Republic

10 or Nil

10

10

Laos

10 or Nil

10

10

Lebanese Republic

10 or Nil

8

10

Luxembourg

10 or Nil

8

8

Malta

15 or Nil

10

10

Mauritius

15 or Nil

10

10

Mongolia

10 or Nil

10

10

Morocco

10 or Nil

10

10

Myanmar

10 or Nil

10

10

Namibia

10 or Nil

5

5

Netherlands

10 or Nil

8 or Nil

8

New Zealand

15 or Nil

10 or Nil

10

Norway

15 or Nil

10 or Nil

10

Pakistan

15 or Nil

10 or Nil

10

Papua New Guinea

15 or Nil

10

10

Philippines

15 or Nil

10 or Nil

10

Poland

15 or Nil

10 or Nil

10

Poland (New)1

10 or Nil

8

8

Qatar

5 or Nil

8

8

Romania

15 or Nil

10 or Nil

10

Russian Federation

15 or Nil

10

10

San Marino

10 or Nil

10

10

Saudi Arabia2

5 or Nil

8

8

Senegal1

10 or Nil

10

10

Seychelles Republic

10 or Nil

10

10

Singapore

10 or Nil

8

5

Slovak Republic

10 or Nil

10

5

South Africa

10 or Nil

5

5

Spain

10 or Nil

7

5

Sri Lanka

10 or Nil

10

10

Sudan

10 or Nil

10

10

Sweden

10 or Nil

8

8

Switzerland

10 or Nil

10 or Nil

10

Syria

10 or Nil

10

10

Thailand

15 or Nil

10 or Nil

10

Turkey

15 or Nil

10

10

Turkmenistan

10 or Nil

10

Nil

Ukraine1

10 or Nil

8

8

United Arab Emirates

5 or Nil

10

10

United Kingdom

10 or Nil

8

8

Uzbekistan

10 or Nil

10

10

Venezuela

15 or Nil

10

10

Vietnam

10 or Nil

10

10

Zimbabwe

10 or Nil

10

10

1Status pending
2Malaysia also has a limited double tax treaty covering air transport operations with Saudi Arabia

Notes:

  • Argentina and the United States of America – Limited double tax treaty covering air and sea transport operations in international traffic.
  • There is no withholding tax on dividends paid by Malaysian companies

 


This publication is a quick reference guide outlining Malaysian tax information which is based on taxation laws and current practices. This booklet also incorporates in coloured italics the 2022 Malaysian Budget proposals based on the Budget 2022 announcement on 29 October 2021 and the Finance Bill 2021. These proposals will not become law until their enactment and may be amended in the course of their passage through Parliament.

This booklet is intended to provide a general guide to the subject matter and should not be regarded as a basis for ascertaining the liability to tax in specific circumstances. No responsibility for loss to any person acting or refraining from acting as a result of any material in this publication can be accepted by PricewaterhouseCoopers. Readers should not act on the basis of this publication without seeking professional advice.

 

Published by
PricewaterhouseCoopers Taxation Services Sdn Bhd (464731-M)
Level 10, 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral,
P.O. Box 10192, 50706 Kuala Lumpur, Malaysia
Tel: 03-21731188 Fax: 03-21731288


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