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PaulaM(Newbie)Newbie
6 July 2022

An Australian company (australian tax resident) plans to provide services to a Malaysian client (there is no PE in Malaysia). According to Malaysian law, it is required to pay a 10% withholding tax, which will collect by client on its behalf. 


How a company can recover tax paid in Malaysia - the double tax treaty in this respect is difficult to understand. Can the tax paid in Malaysia be recovered by the company by deducting it from its Australian income? Thank you in advance for your answer

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2 replies
304 views
2 replies

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Most helpful replyATO Certified Response

CaroATO(Community Support)Community Support
ATO Certified Response11 July 2022

Hi @PaulaM,


The Australian company might be eligible to claim a foreign income tax offset.


To be eligible you must:


  • paid the tax on the foreign income
  • when you lodge the tax return include the foreign income and tax as assessable income.

We've some fantastic information on our web site that talks about claiming a foreign income tax offset.

All replies

Most helpful replyATO Certified Response

CaroATO(Community Support)Community Support
ATO Certified Response11 July 2022

Hi @PaulaM,


The Australian company might be eligible to claim a foreign income tax offset.


To be eligible you must:


  • paid the tax on the foreign income
  • when you lodge the tax return include the foreign income and tax as assessable income.

We've some fantastic information on our web site that talks about claiming a foreign income tax offset.

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Can the tax paid in Malaysia be recovered by the company by deducting it from its Australian income? | ATO Community