On 16 January 2017, Malaysia enacted the Finance Act 2017, effective as of 17 January 2017, incorporating changes on the scope of Withholding Tax (WHT) on technical services and royalties and further clarifications on penalty provisions for Country-by Country Reporting (CbC reporting).
The key changes with regard to WHT are the following:
- The scope of WHT on technical services has been expanded; henceforward technical services rendered by a non-resident taxpayer to a Malaysian resident are subject to WHT regardless where the services were physically performed.üüüü
- The definition of royalty has been expanded to include items such as software and communication via satellite. Such amounts are from now on subject to 10 % WHT which may be reduced under tax treaties.
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