TAX NEWS - January 2010

Tax Treaty: Belgium - Malaysia

Once in effect, the protocol signed 18 December 2009 provides for a 0% withholding tax on dividends paid to a company that holds directly at least 10% of the capital of the payer for an uninterrupted period of at least 12 months or the dividends are received by a pension fund if the dividends are not derived from the carrying on of a business by the pension fund or through an associated enterprise.

A 5% tax rate applies to dividends paid to a company that holds directly at least 10% of the capital of the payer. Otherwise, tax rate will be 10%. A 10% tax rate will apply to interest and a 7% tax rate will apply to royalties.