Treaty detail
China - Malaysia tax treaty
A practical treaty page built around the official treaty text, key withholding categories, permanent-establishment rules, and article-level summaries.
Signed
1985-11-23
Effective
1987-01-01
Articles seeded
6
Withholding snapshot
Dividends
Individual rate: 10% · Corporate rate: 10%
The China-Malaysia treaty applies a uniform cap on cross-border dividends. The precise outcome still depends on beneficial ownership and Article 10.
Interest
Rate: 10%
Interest paid to or guaranteed by the government or central bank of either state may be exempt. Other categories follow the standard 10 percent cap.
Royalties
Rate: 15%
Royalty treatment under this treaty is article-specific. The 1985 treaty includes higher rates than many of China's later treaties. Practitioners should confirm the rate against Article 12.
Permanent establishment
Construction threshold: more than 6 months
Dependent-agent rules apply where a person habitually concludes contracts or maintains a stock of goods on behalf of the enterprise, consistent with the older UN-influenced template.
Other treaty flags
Pension taxation is generally allocated to the residence state, with separate rules for government-service pensions.
Seeded article summaries
Article 4
Residence
Defines treaty residence and is the gateway to any benefit under the treaty.
Residence under the China-Malaysia treaty matters for cross-border holding structures, regional headquarters arrangements, and expatriate workers.
Article 5
Permanent Establishment
Sets the business-presence threshold with a services-PE element.
The China-Malaysia treaty includes both a construction threshold and a separate services threshold, which is common in treaties of this vintage between Asia-Pacific economies.
Article 7
Business Profits
Reserves business profits to the residence state absent a permanent establishment in the other state.
Article 7 is the operating rule for Chinese companies serving Malaysian customers without a fixed base, and the reverse. Once PE is ruled out, business profits are generally taxed only in the residence state.
Article 10
Dividends
Caps source-country withholding on cross-border dividends.
Article 10 produces a uniform treaty cap. The dividend article should be read together with each country's domestic withholding rules and any administrative guidance.
Article 11
Interest
Caps source-country withholding on cross-border interest with government-interest carve-outs.
Article 11 caps the general rate at 10 percent. Government-related interest may be fully exempt under the article.
Article 12
Royalties
Caps source-country withholding on royalties at a rate higher than in many modern treaties.
Royalty rates under the China-Malaysia treaty reflect its 1985 vintage. Practitioners should confirm the rate against Article 12 for the specific royalty category.
Official text
Other treaties involving these jurisdictions
Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
- TreatyUS–CN treaty
- TreatyGB–CN treaty
- TreatyCA–CN treaty
- TreatyAU–CN treaty
- TreatyCN–DE treaty
- TreatyCN–JP treaty
- TreatyCN–IN treaty
- TreatyCN–SG treaty
Primary sources
- China State Taxation Administration - tax treatiesVerified 2026-05-20
- Inland Revenue Board of Malaysia (LHDN)Verified 2026-05-20
- OECD MLI signatories and partiesVerified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.