The Protocol scheduled to this Order makes certain alterations to the Agreement with Malaysia signed on 30th March 1973.

The principal amendments are as follows.

Malaysia’s Excess Profit Tax is brought within the scope of the Agreement, thus enabling the United Kingdom to give credit for it when computing the tax liability of persons resident in this country.

Two new Articles, dealing with technical fees and independent personal services, are inserted into the Agreement. The first provides that the rate of tax which may be imposed in the source country on technical fees is not to exceed 10% (Article 7). The second provides that income from professional services derived by temporary business visitors is, subject to certain conditions, to be taxed only in the taxpayer’s country of residence (Article 9).

The UK will give credit for tax spared under certain provisions of Malaysian law designed to promote development there.

The Protocol will take effect in the United Kingdom from April 1987 with regard to income tax, capital gains tax and corporation tax, and from 1st January 1986 for technical fees.