eKTP 45

Withholding Tax
Part 3 of 3


Relation to the Inland Revenue Board (IRB)’s Practice Notes No. 1/2017 and 2/2017

The IRB has recently issued the Practice Note No. 1/2017 and 2/2017 as below:


1. Practice Note no. 1/2017

The Practice note above is a guide to the newly amended Section 15A of the Income Tax Act (ITA) with the deletion of the Proviso by the Finance Act 2017. In other word means amendments to the Finance Act expanding the scope of withholding tax.

The effective date of 17 January 2017 refers to the date services are performed, except those payment for services has been made before this date as shown below:



2. Practice Note no. 2/2017

The IRB has also in separate issued Practice Note no. 2/2017 confirmed that the Double Tax Agreement (DTA) with other countries will prevail as follows:


Please take note that the DTA is only applicable if the payee is a resident of the other contracting state. The technical fees / fees for technical services article of the relevant DTAs apply only to services that are of “technical, managerial or consultancy” nature.