Foreign tax relief
A tax resident is entitled to claim foreign tax credits against Malaysian tax. Where a treaty exists, the credit available is the whole of the foreign tax paid or the Malaysian tax levied, whichever is lower. In the absence of a tax treaty, the credit available is restricted to half of the foreign tax paid.
Below is the list of countries with which Malaysia has a double tax treaty (DTT):
|Argentina (Limited Agreement)*||Italy||Russian Federation|
|Bangladesh||Korea Republic||Seychelles Republic|
|Bosnia & Herzegovina||Kuwait||Slovak Republic|
|China, People's Republic||Malta||Sudan|
|Finland||New Zealand||United Arab Emirates|
|Germany||Pakistan||United States (Limited Agreement)*|
|Hong Kong||Papua New Guinea||Uzbekistan|
* Restricted to taxation of air and sea transport operations in international traffic.
** Pending ratification.
*** Malaysia also has an Air Transport Agreement with Saudi Arabia.