In 2010, an additional clause was added to the Labuan Offshore Business Activity Tax Act, which will allow the island to adopt the Organisation for Economic Co-operation and Development`s international standard for the exchange of information for tax purposes in double taxation agreements (DBA). Here are some of the countries that have double taxation agreements with Malaysia (some other contracts have been signed and are awaiting ratification): it gives the Director General of Inland Revenue the power to demand information from anyone necessary to comply with the DBA concluded by the Malaysian government. It allows the disclosure of all DBA information to any authorized representative of the government with whom the Malaysian government has entered into such an agreement and, at the request of a tax authority, a government of a country outside Malaysia. Below is the list of countries with which Malaysia has a double taxation agreement (DTT): Malaysia has signed numerous double taxation agreements, of which more than 60 are in force, most of which are in force with low withholding rates on outgoing payments. Details of some of these contracts are listed below. Several other contracts are being negotiated. More information about this data is available in the summary texts developed for individual contracts (if any). Malaysia has also entered into an air transport agreement with Saudi Arabia. In many cases, Malaysian tax treaties contain “tax-efficient” provisions in which a dividend paid on tax-exempt profits under Malaysian tax incentive schemes is paid as taxable profits. This allows the recipient to claim a tax credit on the exempt dividend in his country of origin. There are no purchase clauses contrary to the treaties.

5 EOI jurisdictions are listed in the Taxation Administration Regulations 2017 r 34 and anyone can ask the Director General of Domestic Revenues for a preliminary decision on the application of a provision of the tax law to a certain type of agreement. Subject to certain qualifications, a decision made under this proposed section binds the person who requested such a decision and the Director General of Domestic Revenues. The Korean tax authorities have found that many of the companies they have accused of avoiding paying taxes on capital income have done so through offices registered in Labuan. However, South Korea has ensured that Labuan is excluded from a revised version of its Malaysian tax treaty. 2 The multilateral instrument is legally applicable under the International Tax Agreements Act of 1953. Their entry into force was notified on 10 January 2019, in accordance with Section 4A. The justification is given by the Amendment of the Treasury Laws (OECD Multilateral Instrument) Bill 2018. Although Labuan, as an integral part of the Malaysian state, benefits from the country`s tax agreements, which were signed largely before the Labuan offshore regime came into force, some countries have specific or general anti-avoidance laws that exclude Labuan`s offshore units from contractual benefits.