Document ID: chunk:federal_register_of_legislation:C2004A01066:schedule:16b:p1
Version: federal_register_of_legislation:C2004A01066
Segment Type: schedule
Provision Reference: sch 16B (pt 1/6)
Character Range: 31041–33792

Schedule 16B—second Malaysian protocol

Note: See section 3.

SECOND PROTOCOL AMENDING THE AGREEMENT BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF MALAYSIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AS AMENDED BY THE FIRST PROTOCOL OF 2 AUGUST 1999

 The Government of Australia and the Government of Malaysia,

 Desiring to amend the Agreement between the Government of Australia and the Government of Malaysia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income done at Canberra on 20 August 1980 (as amended by the first Protocol to that Agreement, done at Sydney on 2 August 1999), (in this Protocol referred to as "the Agreement, as amended"),

 Have agreed as follows:

ARTICLE 1
 Article 9 of the Agreement, as amended, is amended by adding after paragraph 2 the following paragraph:

 "(3) Where profits on which an enterprise of one of the Contracting States has been charged to tax in that State are also included, by virtue of the provisions of paragraph 1 or 2, in the profits of an enterprise of the other Contracting State and charged to tax in that other State, and the profits so included are profits which might reasonably have been expected to have accrued to that enterprise of the other State if the conditions operative between the enterprises had been those which might reasonably have been expected to have operated between independent enterprises dealing wholly independently with one another, then the firstmentioned State shall make an appropriate adjustment to the amount of tax charged on those profits in the firstmentioned State. In determining such an adjustment, due regard shall be had to the other provisions of this Agreement and for this purpose the competent authorities of the Contracting States shall if necessary consult each other.".

ARTICLE 2

 Article 10 of the Agreement, as amended, is deleted and substituted with the following:

"ARTICLE 10
Dividends

 1. Dividends paid by a company which is a resident of one of the Contracting States for the purposes of its tax, being dividends to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

 2. However, those dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the law of that State, but:

(a) in Australia:

 (i) no tax shall be charged on dividends to the extent to which those dividends have been "franked" in accordance with Australia's law relating to tax, if the person beneficially entitled to those dividends is a company (other than a partnership) which holds directly at