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 Seychelles – Malaysia Double Tax Treaty

 Seychelles – Malaysia Double Tax Treaty

The Republic of Seychelles signed in 1993 an important agreement for the avoidance of double taxation and for the prevention of the fiscal evasion, under specific terms, with Malaysia. Even though the treaty remained the same, the document has been revised in 2003. Malaysian companies with establishments in Seychelles are protected by the double tax treaty signed by the two countries, concerning the taxes on profits which are paid in the country where they are registered. We invite you to talk to our team of company formation agents in Seychelles and solicit complete information about the double taxation treaty signed with Malaysia. Also, you can ask for support at the time you wish to register a company in Seychelles.

Taxes covered by the DTT signed by Seychelles and Malaysia

Even though Seychelles is considered a tax haven and an important offshore destination with a privileged tax regime, the double tax treaties signed by this country facilitate a lucrative business environment by avoiding the double taxation and strengthening the economic relations with countries worldwide, including Malaysia.

If you are interested in Seychelles offshore, please refer to our team. Our consultants can offer in-depth information on the legal requirements to set up a business and you can also find out the main immigration procedures you may required to respect. 

This can vary based on your nationality (applying for a business visa, obtaining residence permits, etc.) for you or for your family members. 

Our consultants can help you set up any of the legal entities that can be incorporated here, including the Seychelles IBC, which is the acronym of international business company. 

This company type can be set up for a wide range of purposes and it can benefit from many tax exemptions normally imposed for the corporate income of a business, which are regulated by the current lax legislation. 

The following provisions are of high importance when it comes to the taxation of profits in a company in Seychelles:

  • • the agreement applies to business tax and the petroleum income tax in Seychelles and in Malaysia;
  • • a withholding tax of 5% rate is applicable in companies with more than 10% foreign ownership;
  • • the capital gains of a Malaysian company in Seychelles are taxed only in Seychelles;
  • • tax credits can represent the necessary option for the avoidance of double taxation in Seychelles and Malaysia.

Let us remind you that our team of consultants is at your disposal with complete information about the taxes you need to pay in Seychelles. You can also solicit accounting services for your company in Seychelles and benefit from a wide range of solutions that suit most the financial needs in your firm.

Taxation of companies with activities in transportation

Malaysian companies with establishments in Seychelles and with shipping and air transportation operations are taxed only on the profits generated in Seychelles. The same thing is available for Seychelles companies opened in Malaysia due to the provisions of the double taxation convention signed by both countries.

The meaning of permanent establishment

A factory, a branch, a place of management, a warehouse, an office, or a workshop are considered permanent establishments as long as they are registered in Seychelles by foreign investors with businesses in the insular state. Even an installation project or a building site is considered a permanent establishment.

The taxes on dividends

According to the double taxation treaty signed by Seychelles and Malaysia, a 10% tax rate is applicable to dividends registered by companies in Seychelles. The same is available for interest arising in a contracting state and paid to a resident of the other contracting state which is taxable in that other state, not exceeding 10%. Feel free to ask any questions and solicit assistance in matters of taxation from our team of company formation representatives in Seychelles.

Details about the mutual agreement procedure

The same double taxation agreement between Seychelles and Malaysia mentions that if a resident of a contracting state considers that the above-mentioned provisions have not been respected, he/she can present the case to the competent authorities in the home country where the domestic laws are applicable. Such a situation needs to be presented within three years from the date the tax provision did not apply. A mutual agreement procedure is often the solution proposed by the local authorities in order to solve any misunderstandings in terms of taxation as stipulated by the double taxation agreement signed by Seychelles and Malaysia. In most cases, the legal support is highly recommended, especially if a mutual agreement enters the discussion. It is good to know that both contracting states can exchange information through the entitled authorities.

The double tax agreement between Seychelles and Malaysia is applicable on a long-term, but in major situations, this can be terminated through diplomatic arrangements set by both contracting states.

We kindly invite you to find out more details about the double taxation convention signed by Seychelles and Malaysia and about the taxes you need to pay in the insular state from our experienced team of company formation representatives in Seychelles. Feel free to contact us at any time and ask for complete support and information.