Malaysia, Maldives sign DTAA to further facilitate trade, investment

Malaysia, Maldives sign DTAA to further facilitate trade, investment

24 May 2023

The Agreement on the Elimination of Double Taxation on Income Tax and the Prevention of Tax Evasion and Avoidance (DTAA) between Malaysia and the Maldives is expected to further facilitate trade and investment between the two countries, given the upward trend in 2022.

Deputy Minister of Finance I Datuk Seri Ahmad Maslan (pix) said Malaysia’s total trade with the Maldives amounted to US$227 million (RM1.01 billion), an increase of 100.2 per cent from RM504 million in 2021.

“Looking at this positive trend, we believe our bilateral trade will continue to grow as Maldives’ economy thrives on the path to full recovery.

“On the investment front, Malaysia also welcomes Maldivian companies to benefit from investment ventures into areas such as food manufacturing and fast moving consumer goods (FMCG) products,” he said during the signing ceremony of DTAA in Parliament today.

The DTAA was jointly signed by Ahmad Maslan, on behalf of the Government of Malaysia and Minister of Finance of the Maldives Ibrahim Ameer, on behalf of the Maldives Government.

The agreement aims to avoid double taxation on the same income in Malaysia and the Maldives, providing tax certainty to taxpayers in both countries.

It also covers the right to determine taxation and the reduction of withholding tax rates on certain incomes such as dividends, interest, royalties and fees for technical services based on reciprocity for cross-border economic activities.

“With this agreement, residents of both countries will be able to enjoy the avoidance and elimination of double taxation from the same income,” he said, adding that the agreement would enter into force after the ratification procedures by both parties are completed.

Currently, Malaysia has 74 enforced DTAA, which facilitate the exchange of information by request, said Ahmad Maslan.

Meanwhile, considering Malaysia and the Maldives are members of the Organisation of Islamic Cooperation (OIC), Ahmad Maslan said Malaysia believes that the linkage could help both countries in enhancing bilateral trade and investment through the implementation of the Trade Preferential System of the Organisation of Islamic Cooperation (TPS-OIC).

“We believe that the TPS-OIC will serve as a solid foundation for more vibrant and meaningful economic cooperation among the OIC members,” he said.

Ahmad Maslan said the Maldives and Malaysia have begun diplomatic relations since September 1968 in the areas of tourism, culture, education and technical assistance on human capital development.

Source: Bernama