Malaysia has signed a new income tax treaty with Poland on 8 July 2013; the new treaty will replace the current 1977 Malaysia-Poland Treaty. The new treaty will enter into force in the tax year just following the calendar year in which the approval procedures are completed.
The new treaty decreases interest and royalty withholding tax rates to 10% and 8% respectively from the 15% rate on both types of income under the current Treaty. However, interest is exempt from Malaysian tax if paid to the Government of Poland, any Polish political division or statutory bodies, the National Bank of Poland and the Bank Gospodarstra Krajowego in Poland (the Bank of National Economy).
The new treaty contains a new article on “fees for technical services” which applies to payments in consideration for any services of a technical, managerial or consultancy nature. Withholding tax on such payments is limited to a maximum 8%.
