In the case of Malaysia, the income tax and mineral oil tax provisions apply. In the case of Singapore, income tax applies. Profits of a business in a contracting state are taxable only in that state, unless the company operates in the other contracting state through a business management activity located there. But only the portion of the profit actually attributable to the MOU can be taxed in the other contracting state. In determining the benefits of the MOU, all expenses and deductions that would reasonably be attributable to the MOU and deductible are admitted if the MOU was an independent business and if the EP`s profits are determined to be a separate and distinct business that carries out the same or similar activities under identical or similar conditions and is totally independent of the business. Of which he is the pe. The mere purchase of goods or goods by an MOU for the company does not have the effect of attributing profits to this MOU. The consideration of PE benefits must be carried out annually using the same method, unless there is a valid reason for the opposite. To the extent that the competent authority has sufficient information, the provisions of the agreement cannot infringe either the right of the contracting state or the discretion of the competent authority. Malaysia has also entered into an air transport agreement with Saudi Arabia. Technical fees are payments of any kind to a person, with the exception of a staff member of the person making the payments, in exchange for technical, management or consulting services. Technical taxes collected in a contracting state and paid to a resident of the other contracting state may be imposed in that other state.
However, these technical taxes may also be imposed in the contracting state where they are generated if the beneficiary is the economic beneficiary of the royalties, so that the tax collected cannot exceed 5% of the gross amount. Technical royalties are deemed to be incurred in a contracting state when the payer is established in that state and the services are provided in that state. However, if the payer has an MOU in the other contracting state where the recipient is domiciled and the taxes collected relate to those PE, the tax must be collected in the other contracting state. The provisions do not apply where the recipient of the taxes in the contracting state where the payer is based has a PE or a fixed base and the royalties paid are actually linked to that MOU or a fixed base. The general withholding tax rate for technical expenses paid to non-residents in Malaysia is 10%, and the corresponding Singapore rate is the dominant corporate tax rate, which is currently 17%.