The Double Taxation Relief and International Tax Enforcement (Malaysia) Order 2010

Made15th December 2010

At the Court at Buckingham Palace, the 15th day of December 2010

Present,

The Queen’s Most Excellent Majesty in Council

A draft of this Order was laid before the House of Commons in accordance with section 5(2) of the Taxation (International and Other Provisions) Act 20101 and section 173(7) of the Finance Act 20062 and approved by a resolution of that House.

Accordingly, Her Majesty, in exercise of the powers conferred upon Her by section 2 of the Taxation (International and Other Provisions) Act 2010 and section 173(1) of the Finance Act 2006, by and with the advice of Her Privy Council, orders as follows—

Citation1

This Order may be cited as the Double Taxation Relief and International Tax Enforcement (Malaysia) Order 2010.

Double taxation and international tax enforcement arrangements to have effect2

It is declared that—

a

the arrangements specified in the Protocol set out in the Schedule to this Order, which vary the arrangements set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Malaysia) Order 19973, have been made with the Government of Malaysia;

b

the arrangements have been made with a view to affording relief from double taxation in relation to income tax, corporation tax, capital gains tax and taxes of a similar character imposed by the laws of Malaysia and for the purpose of assisting international tax enforcement; and

c

it is expedient that those arrangements should have effect.

Judith SimpsonClerk of the Privy Council

SCHEDULE

Article 2

EXPLANATORY NOTE

(This note is not part of the Order)

The Schedule to this Order contains a Protocol (“the Protocol”) which amends an agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Malaysia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (“the Agreement”), which was scheduled to the Double Taxation Relief (Taxes on Income) (Malaysia) Order 1997 (S.I. 1997/2987). This Order brings the Protocol into effect.

The Agreement aims to eliminate the double taxation of income arising in one country and paid to residents of the other country. It does this by allocating the taxing rights that each country has under its domestic law over the same income and gains, and/or by providing relief from double taxation. It also has specific measures which combat discriminatory tax treatment and provide for assistance in international tax enforcement.

The Protocol continues that approach by updating the exchange of information article in the Agreement to bring it into line with the new international standard for exchange of information as set out in the Model Tax Convention on Income and on Capital published by the Organisation for Economic Cooperation and Development (“OECD”) and to cover taxes of every kind and description imposed by the two countries.

Article 1 provides for citation.

Article 2 makes a declaration as to the effect and content of the arrangements set out in the Protocol.

The Protocol will enter into force on the later of the notifications by each country of the completion of its legislative procedures. It shall have effect for tax years beginning on or after 1st January of the calendar year next following the date of entry into force.

The date of entry into force will, in due course, be published in the London, Edinburgh and Belfast Gazettes.

A full and final Impact Assessment has not been produced for this Order as a negligible impact on the private or voluntary sectors is foreseen.