India and Malaysia on Wednesday signed a double taxation avoidance agreement (DTAA) with a view to boosting bilateral trade and facilitating exchange of tax information.
The main objective of the agreement is to avoid the incidence of double taxation on income by determining the taxing rights between the countries.
The pact also provides for granting reduction in withholding tax rates on certain incomes such as dividend, interest, royalty and fee for technical services on a reciprocal basis, an official statement released in Kuala Lumpur said.
“The Malaysia-India DTAA also outlines provisions to avoid fiscal evasion in respect of taxes through Mutual Agreement Procedures and exchange of information between the two countries.
“This agreement will further strengthen bilateral relations between the countries in trade, investment, social and cultural affairs,” the statement said.
Indian envoy Vijay Gokhale signed on behalf of Government of India while Secretary-General of the Treasury, Dr. Wan Abdul Aziz Wan Abdullah signed for the Malaysian government.