The double tax agreement between Malaysia and Ireland, commonly known as the IRA, is a bilateral agreement designed to prevent individuals and companies from being taxed twice on the same income or profits in both countries. The agreement was signed on 14 November 1997 and has been in force since 1 January 1999.
One of the primary aims of the IRA is to promote cross-border trade and investment by providing tax relief to businesses and individuals. Under the agreement, income earned in one country by a resident of the other country is only taxed once in the country where the income is earned. This helps to avoid the double taxation of income and profits, which can have a significant impact on the financial health of businesses and individuals.
The IRA covers various categories of income, including royalties, dividends, interest, and capital gains. The agreement also provides relief for specific types of income, such as pensions, scholarships, and annuities. In addition, the agreement has specific provisions to address taxation of shipping and air transport profits.
One of the significant benefits of IRA is that it reduces the overall tax burden for businesses operating in both Malaysia and Ireland. This makes it easier and more cost-effective for companies to expand their operations in both countries, which can lead to increased investment and job opportunities.
Individuals who live or work in both Malaysia and Ireland can also benefit from the IRA. The agreement allows them to avoid double taxation of their income, which can have a significant impact on their personal finances.
It is important to note that the IRA only applies to tax residents of both Malaysia and Ireland. To be eligible for the benefits of the agreement, individuals and businesses must provide proof of residency in the respective countries.
In conclusion, the double taxation agreement between Malaysia and Ireland offers significant benefits to businesses and individuals operating in both countries. By preventing double taxation and reducing overall tax burden, the IRA helps to promote cross-border trade and investment, leading to increased economic growth and job opportunities.