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1.Signed on July 23, 1996; Entered into force on February 26, 1999.

 
Date: 23rd July, 1996
President,
The Malaysian Friendship and Trade Centre,
8th Floor, San Ho Plastic Building,
102, Tun Hua North Road,
Taipei, Taiwan, R.O.C.

Dear Mr. President,

I have the honour to refer to the Agreement for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with
respect to Taxes on Income, signed between us on July 23, 1996,
and have the pleasure to inform you that approval has been given
in respect of matters set out in the said Agreement.

I wish to state further that, for the purposes of Article 24,
the word "resident" shall not apply to "nationals" of areas
other than the area represented by the Malaysian Friendship and
Trade Centre in Taipei or the Taipei Economic and Cultural
Office in Malaysia, as the case may be.

I have further the honour to propose that this letter and your
letter in reply, shall bring into force the said Agreement.

Please accept, Mr. President, the assurances of my highest
consideration.

(Huang Hsin-pi)
The Representative,
The Taipei Economic and Cultural Office in Malaysia,
Kuala Lumpur, Malaysia.


AGREEMENT BETWEEN THE TAIPEI ECONOMIC AND CULTURAL OFFICE IN
MALAYSIA AND THE MALAYSIAN FRIENDSHIP AND TRADE CENTRE IN TAIPEI
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF
FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Taipei Economic and Cultural Office in Malaysia and the
Malaysian Friendship and Trade Centre in Taipei, being desirous
of promoting closer economic cooperation and investment,
undertake to seek the approval of their respective authorities
on matters relating to the avoidance of double taxation and the
prevention of fiscal evasion and on matters relating to credits,
benefits, exemptions or other facilities relating to taxation,
as may be applicable, to the residents of the area represented
by the Taipei Economic and Cultural Office in Malaysia or the
area represented by the Malaysian Friendship and Trade Centre in
Taipei, as the case may be, in respect of investments and
economic activities;

Both parties have agreed to seek the approval of their
respective authorities in respect of matters set out in this
Agreement.

ARTICLE 1 PERSONAL SCOPE
This Agreement shall apply to persons who are residents of the
"area represented by the Malaysian Friendship and Trade Centre
in Taipei" (hereinafter called the "MFTC") and the "area
represented by the Taipei Economic and Cultural Office in
Malaysia" (hereinafter called the "TECO").

ARTICLE 2 TAXES COVERED
1. The existing taxes to which this Agreement shall apply are:
(a) in the MFTC: the income tax and the petroleum income tax;
(b) in the TECO: the individual consolidated income tax and the
profit seeking enterprise income tax.
2. This Agreement shall also apply to any other taxes of a
substantially similar character which are subsequently
imposed in addition to, or in place of, the existing taxes.
Both parties shall notify each other of any significant
changes which have been made in the taxation laws applicable
in the MFTC or in the TECO, as the case may be, and of any
significant official publication concerning the application
of the Agreement, including explanations, regulations,
rulings or judicial decisions.

ARTICLE 3 GENERAL DEFINITIONS
1. In this Agreement, unless the context otherwise requires:
(a) the term "person" comprises an individual, a company and
any other body of persons which is treated as a person for
tax purposes;
(b) the term "company" means any body corporate or any entity
which is treated as a body corporate for tax purposes;
(c) the term "international traffic" means any transport by a
ship or aircraft operated by an enterprise in the MFTC or
in the TECO, as the case may be, except when the ship or
aircraft is operated solely between places in the MFTC or
in the TECO, as the case may be;
(d) the term "competent authority" means the appropriate
authority responsible for taxation in the MFTC or in the
TECO, as the case may be.
2. As regards the application of this Agreement in the MFTC or
in the TECO, any term not otherwise defined shall, unless the
context otherwise requires, have the meaning which it has
under the laws applicable in the MFTC or in the TECO relating
to the taxes which are the subject of this Agreement.

ARTICLE 4 RESIDENT
1. For the purposes of this Agreement, the term "resident" means
any person who is a resident in accordance with the taxation
laws applicable in the MFTC or in the TECO, as the case may
be.
2. Where by reason of the provisions of paragraph 1 an
individual is a resident of both the MFTC and the TECO, then
his status shall be determined in accordance with the
following rules:
(a) he shall be deemed to be a resident of either the MFTC or
the TECO where he has a permanent home available to him.
If he has a permanent home available to him in both the
MFTC and the TECO, he shall be deemed to be a resident of
the MFTC or the TECO with which his personal and economic
relations are closer (centre of vital interest);
(b) in cases where his centre of vital interests cannot be
determined, or if he has not a permanent home available to
him in either the MFTC or the TECO, he shall be deemed to
be a resident of the MFTC or the TECO in which he has an
habitual abode;
(c) if he has an habitual abode in both the MFTC and the TECO
or in neither of them, the respective authorities in the
MFTC and in the TECO shall settle the question by mutual
agreement.
3. Where by reason of the provisions of paragraph 1 a person
other than an individual is a resident of both the MFTC and
the TECO, then it shall be deemed to be a resident of the
MFTC or the TECO in which the control and management of its
business is exercised.

ARTICLE 5 PERMANENT ESTABLISHMENT
1. For the purposes of this Agreement, the term "permanent
establishment" means a fixed place of business through which
the business of the enterprise is wholly or partly carried on.
2. The term "permanent establishment" shall include especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, oil well, quarry or other place of extraction of
natural resources;
(g) a plantation, farm, orchard or vineyard;
(h) a building site, construction, installation and assembly
project which exist in the aggregate for more than six
months in a calendar year or for more than six consecutive
months overlapping two calendar years.
3. The term "permanent establishment" shall not be deemed to
include:
(a) the use of facilities solely for the purpose of storage,
display or delivery of goods or merchandise belonging to
the enterprise;
(b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
storage, display or delivery;
(c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise, or for
collecting information, for the enterprise;
(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other
activity of a preparatory or auxiliary character.
4. An enterprise of the MFTC shall be deemed to have a permanent
establishment in the TECO if it carries on supervisory
activities in the TECO for more than six months in connection
with a construction, installation or assembly project which
is being undertaken in the TECO.
5. An enterprise of the TECO shall be deemed to have a permanent
establishment in the MFTC if it carries on supervisory
activities in the MFTC for more than six months in connection
with a construction, installation or assembly project which
is being undertaken in the MFTC.
6. A person acting in the MFTC on behalf of an enterprise of the
TECO (other than an agent of an independent status to whom
paragraph 8 applies) notwithstanding he has no fixed place of
business in the MFTC shall be deemed to be a permanent
establishment in the MFTC if -
(a) he has, and habitually exercises a general authority in the
MFTC to conclude contracts in the name of the enterprise; or
(b) he maintains in the MFTC a stock of goods or merchandise
belonging to the enterprise from which he regularly fills
orders on behalf of the enterprise; or
(c) he regularly secures orders in the MFTC wholly or almost
wholly for the enterprise.
7. A person acting in the TECO on behalf of an enterprise of the
MFTC (other than an agent of an independent status to whom
paragraph 9 applies) notwithstanding he has no fixed place of
business in the TECO shall be deemed to be a permanent
establishment in the TECO if -
(a) he has, and habitually exercises a general authority in the
TECO to conclude contracts in the name of the enterprise; or
(b) he maintains in the TECO a stock of goods or merchandise
belonging to the enterprise from which he regularly fills
orders on behalf of the enterprise; or
(c) he regularly secures orders in the TECO wholly or almost
wholly for the enterprise.
8. An enterprise of the MFTC shall not be deemed to have a
permanent establishment in the TECO merely because it carries
on business in the TECO through a broker, general commission
agent or any other agent of an independent status, where such
persons are acting in the ordinary course of their business.
9. An enterprise of the TECO shall not be deemed to have a
permanent establishment in the MFTC merely because it carries
on business in the MFTC through a broker, general commission
agent or any other agent of an independent status, where such
persons are acting in the ordinary course of their business.
10. The fact that a company which is a resident of the MFTC
ontrols or is controlled by a company which is a
resident of
the TECO, or which carries on business in the TECO (whether
through a permanent establishment or otherwise), shall not
of itself constitute for either company a permanent
establishment of the TECO.
11. The fact that a company which is a resident of the TECO
ontrols or is controlled by a company which is a
resident of
the MFTC, or which carries on business in the MFTC (whether
through a permanent establishment or otherwise), shall not
of itself constitute for either company a permanent
establishment of the MFTC.

ARTICLE 6 INCOME FROM IMMOVABLE PROPERTY
1. Income derived by a resident of the MFTC from immovable
property situated in the TECO may be taxed in the TECO.
2. Income derived by a resident of the TECO from immovable
property situated in the MFTC may be taxed in the MFTC.
3. For the purposes of this Agreement, the term "immovable
property" shall be defined in accordance with the laws
applicable in the MFTC or in the TECO, as the case may be, in
which the property in question is situated. the term shall in
any case include property accessory to immovable property,
livestock and equipment used in agriculture and forestry,
rights to which the provisions of general law respecting
landed property apply, usufruct of immovable property and
rights to variable or fixed payments as consideration for
the working of, or the right to work, mineral deposits, oil
or gas wells, quarries and other places of extracting of
natural resources including timber or other forest produce.
Ships, boats and aircraft shall not be regarded as immovable
property.
4. The provisions of paragraphs 1 and 2 shall apply to income
derived from the direct use, letting, or use in any other
form of immovable property.
5. The provisions of paragraphs 1, 2 and 4 shall also apply to
the income from immovable property of an enterprise and to
income from immovable property used for the performance of
independent personal services.

ARTICLE 7 BUSINESS PROFITS
1. The profits of an enterprise of the MFTC shall be taxable
only in the MFTC unless the enterprise carries on business in
the TECO through a permanent establishment situated in the
TECO. If the enterprise carries on business as aforesaid,
the profits of the enterprise may be taxed in the TECO but
only on so much thereof as is attributable to that permanent
establishment.
2. The profits of an enterprise of the TECO shall be taxable
only in the TECO unless the enterprise carries on business in
the MFTC through a permanent establishment situated in the
MFTC. If the enterprise carries on business as aforesaid,
the profits of the enterprise may be taxed in the MFTC but
only on so much thereof as is attributable to that permanent
establishment.
3. Subject to the provisions of paragraph 5, where an enterprise
of the MFTC carries on business in the TECO through a
permanent establishment situated therein, there shall in the
TECO be attributed to that permanent establishment the
profits which it might be expected to make if it were a
distinct and separate enterprise engaged in the same or
similar activities under the same or similar conditions and
dealing wholly independently with the enterprise of which it
is a permanent establishment.
4. Subject to the provisions of paragraph 5, where an enterprise
of the TECO carries on business in the MFTC through a
permanent establishment situated therein, there shall in the
MFTC be attributed to that permanent establishment the
profits which it might be expected to make if it were a
distinct and separate enterprise engaged in the same or
similar activities under the same or similar conditions and
dealing wholly independently with the enterprise of which it
is a permanent establishment.
5. In determining the profits of a permanent establishment,
there shall be allowed as deductions expenses including
executive and general administrative expenses, which would be
deductible if the permanent establishment were an independent
enterprise insofar as they are reasonably allocable to the
permanent establishment, whether incurred in the MFTC or the
TECO as the case may be, in which the permanent establishment
is situated or elsewhere.
6. No profits shall be attributed to a permanent establishment
by reason of the mere purchase (including transportation) by
that permanent establishment of goods or merchandise for the
enterprise.
7. For the purposes of the preceding paragraphs, the profits to
be attributed to the permanent establishment shall be
determined by the same method year by year unless there is
good and sufficient reason to the contrary.
8. Where profits include items of income which are dealt with
separately in other Articles of this Agreement, then the
provisions of those Articles shall not be affected by the
provisions of this Article.

ARTICLE 8 SHIPPING AND AIR TRANSPORT
1. Profits derived by an enterprise of the MFTC from the
operation of ships or aircraft in international traffic shall
be taxable only in the MFTC.
2. Profits derived by an enterprise of the TECO from the
operation of ships or aircraft in international traffic shall
be taxable only in the TECO.
3. Paragraphs 1 and 2 shall also apply to the share of profits
from the participation in a pool, a joint business or an
international operating agency.
4. Paragraphs 1 and 2 shall also apply to profits from the
rental of ships or aircraft on a full (time, voyage or
bareboat) basis, and profits from the rental of containers
and related equipment, which is incidental to the
international operation of ships or aircraft.

ARTICLE 9 ASSOCIATED ENTERPRISES
1. Where-
(a) an enterprise of the MFTC participates directly or
indirectly in the management, control or capital of an
enterprise of the TECO, or
(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of the MFTC
and an enterprise of the TECO,
and in either case conditions are made or imposed between the
two enterprise in their commercial or financial relations
which differ from those which would be made between
independent enterprises, then any profits which would, but
for those conditions, have accrued to one of the enterprises,
but, by reason of those conditions, have not so accrued, may
be included in the profits of that enterprise and taxed
accordingly.
2. Where-
(a) an enterprise of the TECO participates directly or
indirectly in the management, control or capital of an
enterprise of the MFTC, or
(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of the TECO
and an enterprise of the MFTC,
and in either case conditions are made or imposed between the
two enterprises in their commercial or financial relations
which differ from those which would be made between
independent enterprises, then any profits which would, but
for those conditions, have accrued to one of the enterprises,
but, by reason of those conditions, have not so accrued, may
be included in the profits of that enterprise and taxed
accordingly.

ARTICLE 10 DIVIDENDS
1. Dividends paid by a company which is a resident of the MFTC
to a resident of the TECO may be taxed in the TECO.
2. Dividends paid by a company which is a resident of the TECO
to a resident of the MFTC may be taxed in the MFTC.
3. However, dividends paid by a company which is a resident of
the TECO to a resident of the MFTC may be taxed in the TECO
in accordance with the laws applicable in the TECO, but if
the recipient is the beneficial owner of the dividends the
tax so charged shall not exceed 12.5 per cent of the gross
amount of the dividends.
4. However, dividends paid by a company which is a resident of
the MFTC to a resident of the TECO who is the beneficial
owner thereof shall be exempt from any tax in the MFTC which
is chargeable on dividends in addition to the tax chargeable
in respect of the income of the company. Nothing in this
paragraph shall affect the provisions of the law of the MFTC
under which the tax in respect of a dividend paid by a
company which is a resident of the MFTC from which tax
payable in the MFTC has been, or has been deemed to be,
deducted may be adjusted by reference to the rate of tax
appropriate to the year of assessment of the MFTC immediately
following that in which the dividend was paid.
5. The term "dividends" as used in this Article means income
from shares or other rights, not being debt-claims,
participating in profits, as well as income from other
corporate rights which is subjected to the same taxation
treatment as income from shares by the laws as applicable in
the MFTC or in the TECO, as the case may be, of which the
company making the distribution is a resident.
6. The provisions of paragraphs 1 and 4 shall not apply if the
beneficial owner of the dividends, being a resident of the
TECO, carries on business in the MFTC, of which the company
paying the dividends is a resident, through a permanent
establishment situated therein, and the holding in respect of
which the dividends are paid is effectively connected with
such permanent establishment. In such a case, the provisions
of Article 7 shall apply.
7. The provisions of paragraphs 2 and 3 shall not apply if the
beneficial owner of the dividends, being a resident of the
MFTC, carries on business in the TECO, of which the company
paying the dividends is a resident, through a permanent
establishment situated therein, and the holding in respect of
which the dividends are paid is effectively connected with
such permanent establishment. In such a case, the provisions
of Article 7 shall apply.
8. Where a company which is a resident of the TECO derives
income or profits from the MFTC, the MFTC may not impose any
tax on the dividends paid by the company to persons who are
not residents of the MFTC, or subject the company's
undistributed profits to a tax on undistributed profits, even
if the dividends paid or the undistributed profits consist
wholly or partly of income or profits arising in the MFTC.
9. Where a company which is a resident of the MFTC derives
income or profits from the TECO, the TECO may not impose any
tax on the dividends paid by the company to persons who are
not residents of the TECO, or subject the company's
undistributed profits to a tax on undistributed profits, even
if the dividends paid or the undistributed profits consist
wholly or partly of income or profits arising in the TECO.

ARTICLE 11 INTEREST
1. Interest arising in the MFTC and paid to a resident of the
TECO may be taxed in the TECO.
2. Interest arising in the TECO and paid to a resident of the
MFTC may be taxed in the MFTC.
3. However, interest arising in the MFTC may be taxed in the
MFTC according to the laws applicable in the MFTC, but if the
recipient is the beneficial owner of the interest, the tax so
charged shall not exceed 10 per cent of the gross amount of
the interest.
4. However, interest arising in the TECO may be taxed in the
TECO according to the laws applicable in the TECO, but if the
recipient is the beneficial owner of the interest, the tax so
charged shall not exceed 10 per cent of the gross amount of
the interest.
5. Notwithstanding the provisions of paragraph 3, interest to
which a resident of the TECO is beneficially entitled may be
exempt from tax if the loan or other indebtedness in respect
of which the interest is paid is an approved loan as defined
in Section 2(1) of the Income Tax Act 1967 of the MFTC.
6. The term "interest" as used in this Article means income from
debt-claims of every kind, whether or not secured by
mortgage, and whether or not carrying a right to participate
in the debtor's profits, and in particular, income from
government securities and income from bonds or debentures.
7. The provisions of paragraphs 1, 3 and 5 shall not apply if
the beneficial owner of the interest, being a resident of the
TECO, carries on business in the MFTC, through a permanent
establishment situated in the MFTC, and the debt-claim in
respect of which the interest is paid is effectively
connected with such permanent establishment. In such a case,
the provisions of Article 7 shall apply.
8. The provisions of paragraphs 2 and 4 shall not apply if the
beneficial owner of the interest, being a resident of the
MFTC, carries on business in the TECO, through a permanent
establishment situated in the TECO, and the debt-claim in
respect of which the interest is paid is effectively
connected with such permanent establishment. In such a case,
the provisions of Article 7 shall apply.
9. Interest shall be deemed to arise in the MFTC when the payer
is a resident of the MFTC. Where, however, the person paying
the interest, whether he is a resident of the MFTC or not,
has in the MFTC a permanent establishment in connection with
which the indebtedness on which the interest is paid was
incurred, and such interest is borne by such permanent
establishment, then such interest shall be deemed to arise in
the MFTC.
10. Interest shall be deemed to arise in the TECO when the payer
s a resident of the TECO. Where, however, the person
paying
the interest, whether he is a resident of the TECO or not,
has in the TECO a permanent establishment in connection with
which the indebtedness on which the interest is paid was
incurred, and such interest is borne by such permanent
establishment, then such interest shall be deemed to arise
in the TECO.
11. Where, by reason of a special relationship between the payer
nd the beneficial owner or between both of them and some
other person, the amount of the interest paid, having regard
to the debt-claim for which it is paid, exceeds the amount
which would have been agreed upon by the payer and the
beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the
payments shall remain taxable according to the laws
applicable in the MFTC or in the TECO, as the case may be,
due regard being had to the other provisions of this
Agreement.

ARTICLE 12 ROYALTIES
1. Royalties arising in the MFTC and paid to a resident of the
TECO may be taxed in the TECO.
2. Royalties arising in the TECO and paid to a resident of the
MFTC may be taxed in the MFTC.
3. However, royalties arising in the MFTC may also be taxed in
the MFTC according to the laws applicable in the MFTC, but if
the recipient is the beneficial owner of the royalties, the
tax so charged shall not exceed 10 per cent of the gross
amount of the royalties.
4. However, royalties arising in the TECO may also be taxed in
the TECO according to the laws applicable in the TECO, but if
the recipient is the beneficial owner of the royalties, the
tax so charged shall not exceed 10 per cent of the gross
amount of the royalties.
5. The term "royalties" as used in this Article means payments
of any kind received as a consideration for:
(a) the use of, or the right to use, any patent, trade mark,
design or model, plan, secret formula or process, or any
copyright of scientific work, or for the use of, or the
right to use, industrial, commercial, or scientific
equipment, or for information concerning industrial,
commercial or scientific experience;
(b) the use of, or the right to use, cinematograph films, or
tapes for radio or television broadcasting, any copyright
of literary or artistic work.
6. The provisions of paragraphs 1 and 3 shall not apply if the
beneficial owner of the royalties, being a resident of the
TECO, carries on business in the MFTC in which the royalties
arise through a permanent establishment situated in the MFTC,
and the right or property in respect of which the royalties
are paid is effectively connected with such permanent
establishment. In such a case, the provisions of Article 7
shall apply.
7. The provisions of paragraphs 2 and 4 shall not apply if the
beneficial owner of the royalties, being a resident of the
MFTC, carries on business in the TECO in which the royalties
arise through a permanent establishment situated in the TECO,
and the right or property in respect of which the royalties
are paid is effectively connected with such permanent
establishment. In such a case, the provisions of Article 7
shall apply.
8. Royalties shall be deemed to arise in the MFTC when the payer
is a resident of the MFTC. Where, however, the person paying
such royalties, whether he is a resident of the MFTC or not,
has in the MFTC a permanent establishment in connection with
which the obligation to pay the royalties was incurred, and
such royalties are borne by such permanent establishment,
then such royalties shall be deemed to arise in the MFTC.
9. Royalties shall be deemed to arise in the TECO when the payer
is a resident of the TECO. Where, however, the person paying
such royalties, whether he is a resident of the TECO or not,
has in the TECO a permanent establishment in connection with
which the obligation to pay the royalties was incurred, and
such royalties are borne by such permanent establishment,
then such royalties shall be deemed to arise in the TECO.
10. Where, by reason of a special relationship between the payer
nd the beneficial owner or between both of them and some
other person, the amount of the royalties paid, having
regard to the use, right or information for which they are
paid, exceeds the amount which would have been agreed upon
by the payer and the beneficial owner in the absence of such
relationship, the provisions of this Article shall apply
only to the last-mentioned amount. In such a case, the
excess part of the payments shall remain taxable according
to the laws applicable in the MFTC or in the TECO, as the
case may be, due regard being had to the other provisions of
this Agreement.

ARTICLE 13 TECHNICAL FEES
1. Notwithstanding the provisions of Article 15, technical fees
arising in the MFTC and paid to a resident of the TECO may be
taxed in the TECO.
2. Notwithstanding the provisions of Article 15, technical fees
arising in the TECO and paid to a resident of the MFTC may be
taxed in the MFTC.
3. However, technical fees arising in the MFTC may also be taxed
in the MFTC according to the laws applicable in the MFTC, but
if the recipient is the beneficial owner of the technical
fees, the tax so charged shall not exceed 7.5 per cent of the
gross amount of the technical fees.
4. However, technical fees arising in the TECO may also be taxed
in the TECO according to the laws applicable in the TECO, but
if the recipient is the beneficial owner of the technical
fees, the tax so charged shall not exceed 7.5 per cent of the
gross amount of the technical fees.
5. The term "technical fees" as used in this Article means
payments of any kind to any person, other than to an employee
of the person making the payments, in consideration for any
services of a technical, managerial or consultancy nature.
6. The provisions of paragraphs 1 and 3 of this Article shall
not apply if the beneficial owner of the technical fees,
being a resident of the TECO, carries on business in the MFTC
in which the technical fees arise, through a permanent
establishment situated therein, or perform in the MFTC
personal (professional) services and the technical fees are
effectively connected with such permanent establishment or
such services. In such case, the provisions of Article 7 or
Article 15, as the case may be, shall apply.
7. The provisions of paragraphs 2 and 4 of this Article shall
not apply if the beneficial owner of the technical fees,
being a resident of the MFTC, carries on business in the TECO
in which the technical fees arise, through a permanent
establishment situated therein, or perform in the TECO
personal (professional) services and the technical fees are
effectively connected with such permanent establishment or
such services. In such case, the provisions of Article 7 or
Article 15, as the case may be, shall apply.
8. Technical fees shall be deemed to arise in the MFTC when the
payer is a resident of the MFTC. Where, however, the person
paying the technical fees, whether he is a resident of the
MFTC or not, has in the MFTC a permanent establishment in
connection with which the obligation to pay the technical
fees was incurred, and such technical fees are borne by that
permanent establishment, then such technical fees shall be
deemed to arise in the MFTC.
9. Technical fees shall be deemed to arise in the TECO when the
payer is a resident of the TECO. Where, however, the person
paying the technical fees, whether he is a resident of the
TECO or not, has in the TECO a permanent establishment in
connection with which the obligation to pay the technical
fees was incurred, and such technical fees are borne by that
permanent establishment, then such technical fees shall be
deemed to arise in the TECO.

ARTICLE 14 CAPITAL GAINS
1. Gains derived by a resident of the MFTC from the alienation
of immovable property referred to in Article 6 and situated
in the TECO may be taxed in the TECO.
2. Gains derived by a resident of the TECO from the alienation
of immovable property referred to in Article 6 and situated
in the MFTC may be taxed in the MFTC.
3. Gains from the alienation of movable property forming part of
the business property of a permanent establishment which an
enterprise of the MFTC has in the TECO or of movable property
available to a resident of the MFTC in the TECO for the
purpose of performing independent personal services,
including such gains from the alienation of such a permanent
establishment alone or with the whole enterprise may be taxed
in the TECO.
4. Gains from the alienation of movable property forming part of
the business property of a permanent establishment which an
enterprise of the TECO has in the MFTC or of movable property
available to a resident of the TECO in the MFTC for the
purpose of performing independent personal services,
including such gains from the alienation of such a permanent
establishment alone or with the whole enterprise may be taxed
in the MFTC.
5. Gains from the alienation of ships or aircraft operated in
international traffic, boats engaged in inland waterways
transport or movable property pertaining to the operation of
such ships, aircraft or boats, shall be taxable only in the
MFTC or in the TECO, as the case may be, in which the
enterprise is situated.
6. Gains from the alienation of any property other than that
referred to in paragraphs 1, 2 and 3, shall be taxable only
in the MFTC or in the TECO, as the case may be, of which the
alienator is a resident.

ARTICLE 15 INDEPENDENT PERSONAL SERVICES
1. Income derived by a resident of the MFTC in respect of
professional services or other independent activities of a
similar character shall be taxable only in the MFTC.
However, in the following circumstances such income may be
taxed in the TECO:
(a) if his stay in the TECO is for a period or periods
amounting to or exceeding in the aggregate 183 days in the
calendar year concerned; or
(b) if the remuneration for his services in the TECO is either
derived from residents of the TECO or borne by a permanent
establishment which a person not resident in the TECO has
in the TECO and which, in either case exceeds 3,000 US
Dollars or the equivalent in New Taiwan Dollars in the
calendar year concerned, notwithstanding that his stay in
the TECO is for a period or periods amounting to less than
183 days during that calendar year.
2. Income derived by a resident of the TECO in respect of
professional services or other independent activities of a
similar character shall be taxable only in the TECO.
However, in the following circumstances such income may be
taxed in the MFTC:
(a) if his stay in the MFTC is for a period or periods
amounting to or exceeding in the aggregate 183 days in the
calendar year concerned; or
(b) if the remuneration for his services in the MFTC is either
derived from residents of the MFTC or borne by a permanent
establishment which a person not resident in the MFTC has
in the MFTC and which, in either case exceeds 3,000 US
Dollars or the equivalent in Malaysia Ringgit in the
calendar year concerned, notwithstanding that his stay in
the MFTC is for a period or periods amounting to less than
183 days during that calendar year.
3. The term "professional services" includes especially
independent scientific, literary, artistic, educational or
teaching activities as well as the independent activities of
physicians, lawyers, engineers, architects, dentists and
accountants.

ARTICLE 16 DEPENDENT PERSONAL SERVICES
1. Subject to the provisions of Articles 17, 18, 19 and 20,
salaries, wages and other similar remuneration derived by a
resident of the MFTC in respect of an employment shall be
taxable only in the MFTC unless the employment is exercised
in the TECO. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed in the TECO.
2. Subject to the provisions of Articles 17, 18, 19 and 20,
salaries, wages and other similar remuneration derived by a
resident of the TECO in respect of an employment shall be
taxable only in the TECO unless the employment is exercised
in the MFTC. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed in the MFTC.
3. Notwithstanding the provisions of paragraph 1, remuneration
derived by a resident of the MFTC in respect of an employment
exercised in the TECO shall be taxable only in the MFTC if:
(a) the recipient is present in the TECO for a period or
periods not exceeding in the aggregate 183 days in the
calendar year concerned; and
(b) the remuneration is paid by, or on behalf of, an employer
who is not a resident of the TECO; and
(c) the remuneration is not borne by a resident or a permanent
establishment which the employer has in the TECO.
4. Notwithstanding the provisions of paragraph 2, remuneration
derived by a resident of the TECO in respect of an employment
exercised in the MFTC shall be taxable only in the TECO if:
(a) the recipient is present in the MFTC for a period or
periods not exceeding in the aggregate 183 days in the
calendar year concerned; and
(b) the remuneration is paid by, or on behalf of, an employer
who is not a resident of the MFTC; and
(c) the remuneration is not borne by a resident or a permanent
establishment which the employer has in the MFTC.
5. Notwithstanding the preceding provisions of this Article,
remuneration in respect of an employment exercised aboard a
ship or aircraft operated in international traffic by an
enterprise of the MFTC may be taxed in the MFTC.
6. Notwithstanding the preceding provisions of this Article,
remuneration in respect of an employment exercised aboard a
ship or aircraft operated in international traffic by an
enterprise of the TECO may be taxed in the TECO.

ARTICLE 17 DIRECTORS' FEES
1. Directors' fees and similar payments derived by a resident of
the MFTC in his capacity as a member of the board of
directors of a company which is a resident of the TECO, may
be taxed in the TECO.
2. Directors' fees and similar payments derived by a resident of
the TECO in his capacity as a member of the board of
directors of a company which is a resident of the MFTC, may
be taxed in the MFTC.
3. The remuneration which a director to whom paragraphs 1 and 2
apply derives from the company in respect of the discharge of
day-to-day functions of a managerial or technical nature may
be taxed in accordance with the provisions of Article 16.

ARTICLE 18 ARTISTES AND SPORTSMEN
1. Notwithstanding the provisions of Articles 15 and 16, income
derived by a resident of the MFTC as an entertainer, such as
a theatre, motion picture, radio or television artiste, or a
musician, or as a sportsman, from his personal activities as
such exercised in the TECO, may be taxed in the TECO.
2. Notwithstanding the provisions of Articles 15 and 16, income
derived by a resident of the TECO as an entertainer, such as
a theatre, motion picture, radio or television artiste, or a
musician, or as a sportsman, from his personal activities as
such exercised in the MFTC, may be taxed in the MFTC.
3. Where income in respect of personal activities exercised by
an entertainer or a sportsman in his capacity as such accrues
not to the entertainer or sportsman himself but to another
person, that income may, notwithstanding the provisions of
Articles 7, 15 and 16, be taxed in the TECO or in the MFTC,
as the case may be in which the activities of the entertainer
or sportsman are exercised.
4. Paragraphs 1 and 3 shall not apply to remuneration or profits
derived from activities exercised in the TECO if the visit to
the TECO is directly or indirectly supported wholly or
substantially from the public funds of the MFTC.
5. Paragraphs 2 and 3 shall not apply to remuneration or profits
derived from activities exercised in the MFTC if the visit to
the MFTC is directly or indirectly supported wholly or
substantially from the public funds of the TECO.

ARTICLE 19 TEACHERS AND RESEARCHERS
1. An individual who is a resident of the MFTC immediately
before making a visit to the TECO, and who, at the invitation
of a public university, college, or other similar public
institutions, visits the TECO for a period not exceeding two
years solely for the purpose of teaching or research or both
at such public institutions shall be exempt from tax in the
TECO on his remuneration for such teaching or research which
is subject to tax in the MFTC.
2. An individual who is a resident of the TECO immediately
before making a visit to the MFTC, and who, at the invitation
of a public university, college, or other similar public
institutions, visits the MFTC for a period not exceeding two
years solely for the purpose of teaching or research or both
at such public institutions shall be exempt from tax in the
MFTC on his remuneration for such teaching or research which
is subject to tax in the TECO.
3. The provisions of paragraphs 1 and 2 shall not apply where
his visit, under one or more contracts with the public
institutions of the MFTC or the TECO, as the case may be,
exceed two years.
4. This Article shall not apply to income from research if such
research is undertaken primarily for the private benefit of a
specific person or persons.

ARTICLE 20 STUDENTS AND TRAINEES
1. An individual who is a resident of the TECO immediately
before making a visit to the MFTC and is temporarily present
in the MFTC solely:
(a) as a student at a recognised university, college, school or
other similar recognised educational institution in the
MFTC;
(b) as a business or technical apprentice; or
(c) as a recipient of a grant, allowance or award for the
primary purpose of study, research or training from the
relevant authorities either in the TECO or in the MFTC or
from a scientific, educational, religious or charitable
organisation or under a technical assistance programme,
shall be exempt from tax in the MFTC on:
(i) all remittances from abroad for the purposes of his
maintenance, education, study, research or training;
(ii) the amount of such grant, allowance or award; and
(iii) any remuneration not exceeding 3,000 US Dollars or the
equivalent in New Taiwan Dollars per annum in respect
of services in the MFTC provided the services are
performed in connection with his study, research or
training or are necessary for the purposes of his
maintenance.
2. An individual who is resident of the MFTC immediately before
making a visit to the TECO and is temporarily present in the
TECO solely:
(a) as a student at a recognised university, college, school or
other similar recognised educational institution in the
TECO;
(b) as a business or technical apprentice; or
(c) as a recipient of a grant, allowance or award for the
primary purpose of study, research or training from the
relevant authorities either in the MFTC or in the TECO or
from a scientific, educational, religious or charitable
organisation or under a technical assistance programme,
shall be exempt from tax in the TECO on:
(i) all remittances from abroad for the purposes of his
maintenance, education, study, research or training;
(ii) the amount of such grant, allowance or award; and
(iii) any remuneration not exceeding 3,000 US Dollars or the
equivalent in Malaysian Ringgit per annum in respect of
services in the TECO provided the services are
performed in connection with his study, research or
training or are necessary for the purposes of his
maintenance.

ARTICLE 21 OTHER INCOME
1. Items of income of a resident of the TECO, wherever arising,
not dealt with in the foregoing Articles of this Agreement
shall be taxable only in the TECO except that if such income
is derived from sources in the MFTC, it may also be taxed in
the MFTC.
2. Items of income of a resident of the MFTC, wherever arising,
not dealt with in the foregoing Articles of this Agreement
shall be taxable only in the MFTC except that if such income
is derived from sources in the TECO, it may also be taxed in
the TECO.

ARTICLE 22 LIMITATION OF RELIEF
1. Where this Agreement provides (with or without other
conditions) that income from sources in the TECO shall be
exempt from tax, or taxed at a reduced rate in the TECO and
under the laws in force in the MFTC the said income is
subject to tax by reference to the amount thereof which is
remitted to or received in the MFTC and not by reference to
the full amount thereof, then the exemption or reduction of
tax to be allowed under this Agreement in the TECO shall
apply to so much of the income as is remitted to or received
in the MFTC.
2. Where this Agreement provides (with or without other
conditions) that income from sources in the MFTC shall be
exempt from tax, or taxed at a reduced rate in the MFTC and
under the laws in force in the TECO the said income is
subject to tax by reference to the amount thereof which is
remitted to or received in the TECO and not by reference to
the full amount thereof, then the exemption or reduction of
tax to be allowed under this Agreement in the MFTC shall
apply to so much of the income as is remitted to or received
in the TECO.

ARTICLE 23 ELIMINATION OF DOUBLE TAXATION
1. In the case of a resident in the MFTC, double taxation shall
be avoided as follows:
Subject to the taxation laws applicable in the MFTC regarding
the allowance as a credit against tax payable outside the
MFTC, tax payable in the TECO under the taxation laws
applicable in the TECO by a resident of the MFTC in respect
of income derived from the TECO shall be allowed as a credit
against tax payable in the MFTC in respect of that income.
The credit shall not, however, exceed that part of the tax
payable in the MFTC, as computed before the credit is given,
which is appropriate to such item of income.
2. For the purposes of paragraph 1, the term "tax payable in the
TECO" shall be deemed to include any income derived from
sources in the TECO had the income not been taxed at a
reduced rate or exempted from tax payable in the TECO in
accordance with articles 6, 7, 8 and 8 - 1 of the Statute for
Upgrading Industries in the TECO which were in force on the
date of signature of this Agreement; or any other provisions
which may subsequently be introduced in the TECO in
modification of, or in addition to, the investment incentives
laws so far as they are agreed by the authorities in the TECO
and in the MFTC to be of a substantially similar character.
3. In the case of a resident in the TECO, double taxation shall
be avoided as follows:
Subject to the taxation laws applicable in the TECO regarding
the allowance as a credit against tax payable outside the
TECO, tax payable in the MFTC under the taxation laws
applicable in the MFTC by a resident of the TECO in respect
of income derived from the MFTC shall be allowed as a credit
against tax payable in the TECO in respect of that income.
The credit shall not, however, exceed that part of the tax
payable in the TECO, as computed before the credit is given,
which is appropriate to such item of income.
4. For the purposes of paragraph 3, the term "tax payable in the
MFTC" shall be deemed to include any income derived from
sources in the MFTC had the income not been taxed at a
reduced rate or exempted from tax payable in the MFTC in
accordance with sections 22, 23, 29, 35 and 37 of the
Promotion of Investments Act 1986 in the MFTC which were in
force on the date of signature of this Agreement; or any
other provisions which may subsequently be introduced in the
MFTC in modification of, or in addition to, the investment
incentives laws so far as they are agreed by the authorities
in the MFTC and in the TECO to be of a substantially similar
character; and interest to which paragraph 5 of Article 11
applies, an amount not exceeding 10 per cent of the gross
amount of the interest in respect of which tax payable in the
MFTC would have been payable but for the exemption granted in
accordance with that paragraph.
5. The provisions of paragraphs 2 and 4 shall apply for the
first five years from the date on which this Agreement takes
effect. These provisions shall apply to a resident in the
TECO approved by its authority and to a resident in the
MFTC. The MFTC and the TECO shall consult each other and
their competent authorities in order to determine whether the
period stipulated herein shall be extended.

ARTICLE 24 NON-DISCRIMINATION
1. The Malaysian Friendship and Trade Centre in Taipei or the
Taipei Economic and Cultural Office in Malaysia shall make
representation to their competent authorities to ensure that:
(a) the residents of an area shall not be subjected in the
other area to any taxation or any requirement connected
therewith which is other or more burdensome than the
taxation and connected requirements to which residents of
that other area in the same circumstances are or may be
subjected;
(b) the taxation on a permanent establishment which an
enterprise of an area has in the other area shall not be
less favourably levied in that other area than the taxation
levied on enterprises of that other area carrying on the
same activities;
(c) enterprises of an area, the capital of which is wholly or
partly owned or controlled, directly or indirectly, by one
or more residents of the other area, shall not be subjected
in the first-mentioned area to any taxation or any
requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to
which other similar enterprises of that first-mentioned
area are or may be subjected.
2. The Malaysian Friendship and Trade Centre in Taipei or the
Taipei Economic and Cultural Office in Malaysia as the case
may be, agreed that:
(a) nothing in this Article shall be construed as obliging the
competent authority of an area to grant to individuals who
are residents of the other area any personal allowances,
reliefs and reductions for tax purposes on account of civil
status or family responsibilities which are granted to the
residents of the first-mentioned area;
(b) nothing in this Article shall be construed so as to prevent
either competent authority from limiting to the residents
of an area the enjoyment of tax incentives designed to
promote economic development in that area.
3. In this Article, the term "taxation" means taxes to which
this Agreement applies.

ARTICLE 25 MUTUAL AGREEMENT PROCEDURE
1. Where a person considers that the actions of one or both of
the competent authorities of the MFTC and the TECO result or
will result for him in taxation not in accordance with the
provisions of this Agreement, he may, irrespective of the
remedies provided by the relevant domestic laws, present his
case to the Malaysian Friendship and Trade Centre in Taipei
or the Taipei Economic and Cultural Office in Malaysia, as
the case may be, who will in turn present his case to the
competent authority. The case must be presented within three
years from the first notification of the action resulting in
taxation not in accordance with the provisions of the
Agreement.
2. The Malaysian Friendship and Trade Centre in Taipei and the
Taipei Economic and Cultural Office in Malaysia shall
endeavour to resolve the case by mutual agreement with a view
to the avoidance of taxation which is not in accordance with
the Agreement.
3. The Malaysian Friendship and Trade Centre in Taipei and the
Taipei Economic and Cultural Office in Malaysia shall
endeavour to resolve by mutual agreement any difficulties or
doubts arising as to the interpretation or application of the
Agreement. They may consult together for the elimination of
double taxation in cases not provided for in the Agreement.

ARTICLE 26 EXCHANGE OF INFORMATION
1. The Malaysian Friendship and Trade Centre in Taipei and the
Taipei Economic and Cultural Office in Malaysia shall
exchange such information as is necessary for carrying out
the provisions of this Agreement or of their respective
domestic laws concerning taxes covered by this Agreement
insofar as the taxation thereunder is in accordance with this
Agreement. Any information so exchanged shall be treated as
secret and shall not be disclosed to any persons or
authorities other than those concerned with the assessment or
collection of, the enforcement or prosecution in respect of,
or the determination of appeals in relation to, the taxes
which are the subject of this Agreement.
2. In no case shall the provisions of paragraph 1 be construed
so as to impose on either the Centre or the Office the
obligation:
(a) to carry out administrative measures at variance with their
respective domestic laws;
(b) to supply information which is not obtainable under their
respective domestic laws;
(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or
trade process, or information, the disclosure of which
would be contrary to public policy.

ARTICLE 27 ENTRY INTO FORCE
1. This Agreement shall enter into force upon an exchange of
notes by the duly authorized representatives of the Malaysian
Friendship and Trade Centre in Taipei and the Taipei Economic
and Cultural Office in Malaysia confirming their mutual
agreement that both sides have completed all internal legal
procedures necessary to give effect to this Agreement.
2. The provisions of the Agreement shall have effect:
(a) in the TECO:
(i) in respect of tax withheld or deducted at source on
income paid to non-residents on or after the first day of
January in the calendar year following that in which the
exchange of notes takes place; and
(ii) in all other cases, in respect of tax for the taxable
year beginning on the first day of January of the
calendar year immediately following the year in which
the exchange of notes takes place and subsequent taxable
years.
(b) in the MFTC:
(i) in respect of withholding tax on income that is derived
by a non-resident, in relation to income derived on or
after the first day of January in the calendar year
following that in which the exchange of notes takes
place; and
(ii) in respect of other taxes for the year of assessment
beginning on or after the first day of January in the
second calendar year immediately following the year in
which the exchange of notes takes place and subsequent
years of assessment.

ARTICLE 28 TERMINATION
This Agreement shall remain in force indefinitely but either the
Malaysian Friendship and Trade Centre in Taipei or the Taipei
Economic and Cultural Office in Malaysia may terminate the
Agreement by giving to the other Office or Centre written notice
of termination on or before the 30th day of June in any calendar
year from the fourth year from the year in which the Agreement
entered into force. In such an event, the Agreement shall cease
to have effect:
(a) in the TECO:
(i) in respect of tax withheld or deducted at source on
income paid to non-residents on or after the first day of
January in the calendar year following that in which the
notice is given; and
(ii) in all other cases, in respect of tax for the taxable
year beginning on the first day of January of the
calendar year following that in which the notice is
given.
(b) in the MFTC:
(i) in respect of withholding tax on income that is derived
by a non-resident, in relation to income derived on or
after the first day of January in the calendar year
following the year in which the notice is given; and
(ii) in all other cases, in respect of tax for the year of
assessment beginning on or after the first day of
January in the second calendar year following the year
in which the notice is given.

DONE in duplicate at Taipei this 23rd day of July 1996 each in
Bahasa Malaysia, Chinese and English languages, the three texts
being equally authentic. In the event of there being a dispute
in the interpretation and the application of this Agreement, the
English text shall prevail.

.............................................................
the Representative The Taipei Economic and Cultural Office in
Malaysia Huang Hsin-Pi
.............................................................
President The Malaysian Friendship and Trade Centre in Taipei
Datu Harun Datu Mansor
資料來源:全國法規資料庫