Signing Of The Agreement Between Singapore And Malaysia For The Avoidance Of Double Taxation And Prevention Of Fiscal Evasion With Respect To Taxes On Income

A new Agreement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income to replace the existing Agreement was signed today between the Government of the Republic of Singapore and the Government of Malaysia.

2 The signing took place in Putrajaya. Mr. Lee Hsien Loong, Prime Minister and Minister for Finance, signed on behalf of Singapore while Mr Abdullah Badawi, Prime Minister and Minister of Finance, signed on behalf of Malaysia.

3 The existing Agreement signed on 26th December 1968 and amended by a Supplementary Agreement signed on 6th July 1973 has been in force for more than 30 years. Since then, economic circumstances and policies of the two countries have changed. The terms of the new Agreement reflect these changes. The new Agreement will also further strengthen the economic relations between the two countries.

4 The new Agreement will continue to provide for avoidance of double taxation on income earned in one country by a resident of the other country. Changes in the new Agreement include lowering of withholding tax rates. The changes will further encourage greater cross-flow of trade, investment, financial activities and technical know-how between Singapore and Malaysia.

5 The new Agreement will enter into force after ratification by both countries. The provisions of the new Agreement will apply to income arising in the year after its entry into force. Upon ratification of the new Agreement, the provisions of the old Agreement signed on 26th December 1968 as amended by a Supplementary Agreement signed on 6th July 1973 will cease to apply from then on.

MINISTRY OF FINANCE