Malaysia - Russia Tax Treaty

P.U. (A) 58

Signed: 31 July 1987

Effective Date: 1 January 1989

AGREEMENT BETWEEN THE GOVERNMENT OF MALAYSIA AND THE GOVERNMENT OF THE UNION OF SOVIET SOCIALIST REPUBLICS FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME

The Government of Malaysia and the Government of the Union of Soviet Socialist Republics, desiring to conclude an Agreement for the
avoidance of double taxation with respect to taxes on income and with the view
to promote economic co-operation between the two countries, have agreed as follows:

Article 1

SCOPE OF THE AGREEMENT

This Agreement shall apply to persons who are residents of one or both of the Contracting States.
(a) This Agreement applies to the territory of each of the Contracting States, including its territorial sea, and to its Exclusive Economic
Zone and its Continental Shelf which extends beyond the limits of its territorial sea over which it exercises, under its laws consistent with International Law, sovereign rights for the purpose of exploring and exploiting the natural resources of such areas.

(b) For the purposes of this Agreement any reference to either of the Contracting States is considered as a reference to the territory of the relevant State, including its territorial sea, its Exclusive Economic Zone and its Continental
Shelf which extends beyond the limits of the territorial sea of that State, as mentioned in sub- paragraph (a) above.

Article 2

TAXES COVERED

This Agreement shall apply to taxes on income imposed by a
Contracting State, irrespective of the manner in which they are levied.
The taxes which are the subject of this Agreement are:

(a) in Malaysia:

(i) the income tax and excess profit tax;

(ii) the supplementary income tax, that is, development tax; and

(iii) the petroleum income tax;

(hereinafter referred to as "Malaysian tax");

(b) in the Union of Soviet Socialist Republics:

(i) the income tax on foreign legal persons;

(ii) the income tax on population; and

(iii) the tax on profits of a foreign participant of a joint venture, transferred abroad;

(hereinafter referred to as "Union of Soviet Socialist Republics tax").

The Agreement shall also apply to any identical or substantially similar taxes on income which are imposed after the date of signature of this
Agreement in addition to, or in place of, the existing taxes. The competent
authorities of the Contracting States shall notify each other of important changes which have been made in their respective taxation laws, necessary for the implementation of this Agreement.

Article 3

GENERAL DEFINITIONS

In this Agreement, unless the context otherwise requires:

(a) the terms "a Contracting State" and "the other Contracting State" mean the Federation of Malaysia (Malaysia) or the Union of Soviet Socialist Republics (the U.S.S.R.) as the context requires;

(b) the term "person":

(i) in the case of Malaysia, includes an individual, a company and any other body of persons which is treated as a person for tax purposes -

the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes;

(ii) in the case of the U.S.S.R., includes an individual, any legal person or other organisation created under the laws of the U.S.S.R. or any Union Republic thereof and treated as a legal person for the purposes of taxation in the U.S.S.R.;

(c) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship

or aircraft is operated solely between places in the other Contracting State;

(d) the term "competent authority" means:

(i) in the case of Malaysia, the Minister of Finance or his
authorised representative; and

(ii) in the case of the U.S.S.R., the Ministry of Finance of the U.S.S.R. or their authorised representative.

In the application of the Agreement by a Contracting State, any
term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that State concerning the taxes to
which the Agreement applies.

Article 4

RESIDENT

For the purposes of this Agreement the term "resident of a Contracting State" means:

(a) in the case of Malaysia, a person who is resident in Malaysia
for the purposes of Malaysian tax; and

(b) in the case of the U.S.S.R., a person who is resident in the U.S.S.R. for the purposes of the U.S.S.R. tax.

Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined in
accordance with the following rules:

(a) he shall be deemed to be a resident of the State in which he
has a permanent home available to him. If he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests);

(b) if the State in which he has his centre of vital interests
cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;

(c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a citizen;

(d) if either State regards him as its citizen or if he is a citizen of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

Where, by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.

Article 5

PERMANENT ESTABLISHMENT

In this Agreement the term "a permanent establishment" means any
fixed place of business through which a resident of a Contracting State wholly or partly carries on any commercial activity in the other Contracting State.
The term "permanent establishment" shall include especially:

(a) a branch;

(b) an office;

(d) an installation or assembly project which exists for more than six months.

Notwithstanding the provisions of paragraph 1, a permanent establishment in a Contracting State through which a person who is a resident of the other Contracting State wholly or partly carries on any commercial activity
shall not include:

(a) the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the resident;

(b) the maintenance of a stock of goods or merchandise belonging to
the resident solely for the purpose of storage or display;

(c) the maintenance of a stock of goods or merchandise belonging to
the resident solely for the purpose of processing by another resident;

(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise, or for collecting and disseminating of information, for the resident;

(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the resident, any other activity of a preparatory or auxiliary character.

Notwithstanding the provisions of sub-paragraph 2(c) a
resident of a Contracting State shall be deemed to have a permanent establishment
in the other Contracting State if it carries on solely supervisory activities in that other State for more than 6 months in connection with a construction,
installation or assembly project which is being undertaken in that other State.
A person (other than a broker, general commission agent or any other agent of an independent status to whom paragraph 6 applies) acting in a Contracting State on behalf of a resident of the other Contracting State shall be deemed to have a permanent establishment in the first-mentioned State, if:

(a) he has, and habitually exercises in the first-mentioned State, an authority to conclude contracts in the name of the resident unless his activities are limited to those activities mentioned in paragraph 3;

(b) he maintains in the first-mentioned State a stock of
goods or merchandise belonging to the resident from which he regularly fills orders on behalf of the resident; or

A resident of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting
in the ordinary course of their business.

However, when the activities of such an agent are devoted wholly or
almost wholly on behalf of the resident, he shall not be considered an
agent of an independent status if the transactions between the agent and the resident were not made under arm's length conditions.

The fact that a person (other than an individual) which is a
resident of a Contracting State controls or is controlled by a person (other than an individual) which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either person a permanent establishment of the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

Income derived by a resident of a Contracting State from immovable property situated in the other Contracting State may be taxed in that other State.
For the purposes of this Agreement, the term "immovable property" shall be defined in accordance with the laws of the Contracting State in
which the

property in question is situated. In respect of Malaysia, the term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions
of general law respecting landed property apply, usufruct of immovable property and
rights to variable or fixed payments as consideration for the working of, or
the right to work, mineral deposits, oil or gas wells, quarries and other places of extracting of natural resources including timber or other forest produce. Ships and
aircraft shall not be regarded as immovable property.

The provisions of paragraph 1 shall also apply to income derived from the direct use, letting, or use in any other form of immovable property.

Article 7

BUSINESS PROFITS

The profits of a resident of a Contracting State shall be taxable only in that State unless the resident carries on business in the other
Contracting State through a permanent establishment situated therein. If the resident
carries on business as aforesaid, the profits of the resident may be taxed in the other State but only on so much thereof as is attributable to that permanent establishment.
Subject to the provisions of paragraph 3, where a resident of a
Contracting State carries on business in the other Contracting State through a
permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate entity engaged in the same or
similar activities under the same or similar conditions and dealing wholly independently with the resident of which it is a permanent establishment.
In determining the profits of a permanent establishment, there
shall be deducted expenses which are incurred for the purposes of the permanent establishment including executive and general administrative expenses whether incurred in the State in which the permanent establishment is
situated or elsewhere.
No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the resident.
For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles
shall not be effected by the provisions of this Article.
Where --

(a) a resident of a Contracting State participates directly or
indirectly in the management, control or capital of a resident of the other Contracting State, or

(b) the same persons participate directly or indirectly in the management, control or capital of a resident of a Contracting State and a resident of
the other Contracting State, and in either case conditions are made or imposed between the two entities in their commercial or financial relations which differ from those which would be made between independent entities, then any profits
which would, but for those conditions, have accrued to one of the
entities, but, by reason of those conditions, have not so accrued, may be included in the profits of that entity and taxed accordingly.

Article 8

AIR TRANSPORT AND SHIPPING

Income derived by a resident of a Contracting State from the
operation of ships or aircraft in international traffic shall be taxable only in
that Contracting State.
Paragraph 1 shall also apply to the share of the profits from the operation of ships or aircraft derived by a resident of a Contracting State through participation in a pool, a joint business or an international operating agency.

Article 9

DIVIDENDS

Dividends paid by a company which is a resident of Malaysia to a resident of the U.S.S.R. who is the beneficial owner thereof shall be exempt from any tax in Malaysia which is chargeable on dividends in addition to the tax chargeable in respect of the income of the company.
Profits of a joint-venture accruing to a participant who is a
resident of Malaysia, when transferred from the U.S.S.R., may be taxed in accordance with the law of the U.S.S.R. but the tax so charged shall not exceed
15% of such profits transferred from the U.S.S.R.
The term "dividends" as used in this Article means income from
shares or other rights which is subjected to the same taxation treatment as
income from shares by the laws of the State of which the company making the distribution is a resident; for the purposes of this Agreement in the case of the U.S.S.R. the term means profits mentioned in paragraph 2.
The provisions of paragraph 1 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on
business in the

other Contracting State, of which the company paying the dividends is a resident, through a permanent establishment situated therein, and the holding in respect of which the dividends are paid is effectively connected with such
permanent establishment. In such a case, the provisions of Article 7 shall apply.

Article 10

INTEREST

Interest arising in a Contracting State and paid to a resident
of the other Contracting State may be taxed in that other State.
However, such interest may be taxed in the Contracting State in
which it arises, and according to the laws of that State, but if the recipient is the beneficial owner of the interest, the tax so charged shall not exceed 15% of
the gross amount of the interest.
Notwithstanding the provisions of paragraph 2, interest to which a resident of the U.S.S.R. is beneficially entitled shall be exempt from Malaysian tax if the loan or other indebtedness in respect of which the interest is paid is an approved loan as defined under Malaysian law.
Notwithstanding the provisions of paragraph 2 interest arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State where it is paid:

(a) to the Government of that other State;

(b) to the Central Bank of that other State; or

(c) in respect of a loan provided, guaranteed or insured by the Government of that other State which may be agreed upon between the competent authorities of the Contracting States.

The term "interest" as used in this Article means income from debt claims of every kind, whether or not secured by mortgage, and whether or not carrying a right to participate in the debtor's profits, and in
particular, income from government securities and income from bonds or debentures.
The provisions of paragraphs 1, 2, 3 and 4 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment. In such a case, the provisions of Article 7 shall apply.
Interest shall be deemed to arise in a Contracting State when the payer is that State itself, its subdivision or a local authority thereof, or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State
a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment, then such interest shall be deemed to arise in the State in which the permanent establishment is situated.
Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest paid, having regard to the debt- claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the
beneficial owner in the absence of such relationship, the provisions of this
Article shall apply only to the last-mentioned amount. In such a case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

Article 11

ROYALTIES

Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the
recipient is the beneficial owner of the royalties, the tax so charged shall not exceed:

(a) 10% of the gross amount of royalties mentioned in paragraph 3(a);

(b) 15% of the gross amount of royalties mentioned in paragraph 3(b).

The term "royalties" as used in this Article means payments of
any kind received as a consideration for:

(a) the use of, or the right to use, any patent, trade mark, design or model, plan, secret formula or process, or any copyright of scientific work, or for the use of, or the right to use, industrial, commercial, or
scientific equipment, or for information concerning industrial, commercial or scientific experience; or

(b) the use of, or the right to use, cinematograph films, or tapes for radio or television broadcasting, any copyright of literary or artistic work.

The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in

the other Contracting State in which the royalties arise through a
permanent establishment situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such a case, the provisions of Article 7 shall apply.

Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, its subdivision or a local authority thereof, or a resident of that State. Where, however, the person paying such royalties, whether he
is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the obligation to pay the
royalties was incurred, and such royalties are borne by such permanent
establishment, then such royalties shall be deemed to arise in the State in which the
permanent establishment is situated.
Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of
each Contracting State, due regard being had to the other
provisions of this Agreement.
Subject to paragraph 4 of Article 21 royalties derived by a
resident of the

U.S.S.R. which are subjected to film hire duty under the
Cinematograph Film- Hire Duty Act in Malaysia shall not be liable to Malaysian tax to
which this Agreement applies.

Article 12

GAINS FROM THE ALIENATION OF PROPERTY

Gains from the alienation of immovable property, as defined in paragraph 2 of Article 6, may be taxed in the Contracting State in which such
property is situated.
Gains derived from the alienation of movable property forming
part of property of a permanent establishment which a resident of a Contracting State has in the other Contracting State, including such gains from the
alienation of such a permanent establishment may be taxed in that other State.

However, gains from the alienation of ships or aircraft operated by a resident of a Contracting State in international traffic and movable property pertaining to the operation of such ships or aircraft shall be taxable only in that State.

Gains from the alienation of any property or assets, other than
those mentioned in paragraphs 1 and 2, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 13

INCOME FROM EMPLOYMENT

Subject to the provisions of Articles 14, 15, 16, 17, 18 and
19, salaries, wages and other similar remuneration derived by a resident of a
Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

(a) the recipient is present in the other State for a period or
periods not exceeding in the aggregate 183 days in the calendar year concerned; and

(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and

Notwithstanding the preceding provisions of this Article,
remuneration in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State.

Article 14

DIRECTORS' FEES

Directors' fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company or any other legal person which is a resident of the other Contracting State may be taxed in that other State.

Article 15

ARTISTES AND ATHLETES

Notwithstanding the provisions of Article 13, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or

television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7 and 13, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised.
Notwithstanding the provisions of paragraphs 1 and 2 income derived from activities exercised in a Contracting State by artistes or athletes shall be exempt from tax in that State where a visit to that State is exercised
under the programme of exchange agreed upon by the Contracting States
or their subdivisions or local authorities thereof.

Article 16

PENSIONS

Subject to the provisions of paragraph 2 of Article 17, any pension
and other similar remuneration for past employment arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only
in that other State.

Article 17

GOVERNMENT SERVICE

Remuneration, other than a pension, paid by a Contracting State
or its subdivision or a local authority thereof to any individual in respect of services rendered to that State or its subdivision or local authority thereof shall be taxable only in that State. However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the recipient is a resident of that State who:

(a) is a citizen of that State; or

(b) did not become a resident of that State solely for the purpose
of performing the services.

Any pension paid by, or out of funds created by, a Contracting
State, its subdivision, or a local authority thereof to any individual in
respect of services rendered to that State, its subdivision, or local authority thereof shall be taxable only in that State.
Where an individual mentioned in paragraph 1 derives remuneration
or pension from commercial activities, the provisions of Articles 13 and
14 shall apply.

Article 18

STUDENTS AND TRAINEES

An individual who is a resident of a Contracting State
immediately before making a visit to the other Contracting State and is temporarily
present in the other State solely:

(a) as a student at a university, college, school or other similar educational institution in that other State; and

(b) as a business or technical apprentice, shall be exempt from tax in that other State on all remittances from abroad for the purposes of his maintenance, education, research or training.

The provisions of this Article shall also apply to a
scholarship, grant and other similar amounts derived from the Government or an organisation
of the first-mentioned State or an international organisation in connection
with a research or training in an institution other than an educational institution.

Article 19

TEACHERS AND RESEARCHERS

An individual who is a resident of a Contracting State
immediately before making a visit to the other Contracting State, and who, at the
invitation of any university, college or other establishment for higher education or
scientific research institution established by the other State, visits that other State solely for the purpose of teaching or research or both at such institutions for a period not exceeding 2 years shall be exempt from tax in that other State
on any remuneration for such teaching or research.
This Article shall not apply to income from research if such
research is undertaken primarily for the private benefit of a specific person or persons.

Article 20

OTHER INCOME

Items of income of a resident of a Contracting State which are not
expressly mentioned in the foregoing Articles of this Agreement shall be taxable only in that Contracting State except that if such income is derived from sources in the other Contracting State, it may also be taxed in that other State.

Article 21

ELIMINATION OF DOUBLE TAXATION

Subject to the laws of Malaysia regarding the allowance as a credit against Malaysian tax of tax payable in any country other than Malaysia, Union of Soviet Socialist Republics tax payable under the laws of the U.S.S.R. and in accordance with this Agreement by a resident of Malaysia in respect of income derived from the U.S.S.R. shall be allowed as a credit against Malaysian tax
payable in respect of that income. The credit shall not, however, exceed that
part of the Malaysian tax, as computed before the credit is given, which is
appropriate to such item of income.
In the U.S.S.R., double taxation shall be eliminated in accordance with the law of the U.S.S.R. by taking into account the Malaysian tax paid.
For the purpose of paragraph 2, where royalties derived by a resident of the

U.S.S.R. are, as film rentals, subject to cinematograph film-hire duty in Malaysia, that duty shall be deemed to be Malaysian tax.

Article 22

NON-DISCRIMINATION

The Citizens of a Contracting State shall not be subjected in
the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome that the taxation and connected
requirements to which citizens of that other State in the same circumstances are or
may be subjected.
The taxation of the income or profits which a resident of a Contracting State derives through a permanent establishment in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on the income or profits derived through a permanent establishment in that
State by residents of third States carrying on similar activities in the same circumstances.
Nothing in this Article shall be construed as obliging:

(a) a Contracting State to grant to individuals who are resident of the other Contracting State any personal allowances, reliefs and reductions for tax purposes which it grants to its own residents;

(b) Malaysia to grant to citizens of the U.S.S.R. not resident in
Malaysia those personal allowances, reliefs and reductions for tax purposes which are by law available on the date of signature of this Agreement only to citizens of Malaysia who are not resident in Malaysia.

In this Article, the term "taxation" means taxes to which this
Agreement applies.

Article 23

MUTUAL AGREEMENT PROCEDURE

Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in
taxation not in accordance with this Agreement, he may, notwithstanding the remedies provided by the taxation laws of those States, present his case to the competent authority of the State of which he is a resident or, if his case comes under paragraph 1 of Article 22, to that of the State of which he is a citizen. The
case must be presented within three years from the first notification of the
action resulting in taxation not in accordance with the provisions of the Agreement.
The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the
other Contracting State, with a view to the avoidance of taxation which is not in accordance with this Agreement.
The competent authorities of the Contracting States shall
endeavour to resolve by mutual agreement any difficulties or doubts arising
as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in this Agreement.

Article 24

EXCHANGE OF INFORMATION

The competent authorities of the Contracting States shall exchange such information as is necessary for the carrying out of provisions of this Agreement. Any information so exchanged shall be treated as confidential and
shall be disclosed only to persons or authorities concerned with the implementation of the laws relating to taxes covered by this Agreement.
In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:

(a) to carry out administrative measures at variance with laws or the administrative practice of that or of the other Contracting State;

(b) to supply particulars which are not obtainable under the laws or in the normal course of the administration of that or of the other
Contracting State;

(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret, trade process, or information the disclosure of which would be contrary to public policy.

Article 25

ENTRY INTO FORCE

This Agreement is subject to ratification and the instruments of
ratification shall be exchanged at Kuala Lumpur as soon as possible.
This Agreement shall enter into force on the day of the
exchange of the instruments of ratification and shall have effect in respect of taxes for the year of assessment beginning on the first day of January 1989, and subsequent years of assessment.

Article 26

TERMINATION

This Agreement shall remain in effect indefinitely, but either
Contracting State may terminate the Agreement, through diplomatic channels, by giving to the other Contracting State written notice of termination on or before 30 June in any calendar year after the year 1992. In such an event the Agreement shall cease to have effect in respect of taxes for the year of assessment beginning on the first day of January in the calendar year next following that in which
the notice of termination is given and subsequent years of assessment.

IN WITNESS whereof the undersigned, duly authorised thereto by
their respective Governments, have signed this Agreement.

Done in duplicate at Moscow, this 31st day of July, 1987, each in
Bahasa Malaysia, Russian and the English language, the three texts being
equally authentic. In case of any divergence of interpretation, the interpretation shall be made in accordance with the English text.

PROTOCOL

At the time of signing the Agreement between the Government of Malaysia and the Government of the Union of Soviet Socialist Republics for the Avoidance of Double Taxation with respect to Taxes on Income, the undersigned have agreed that the following provisions shall form an integral part of the Agreement:

In connection with Article 5, "Permanent establishment":

In the case of Malaysia the term "Permanent establishment" shall
include, in addition to those mentioned in paragraph 2 of Article 5, the following:

(i) a place of management;

(ii) a factory;

(iii) a workshop;

(iv) a mine, an oil or gas well, a quarry or other place of extraction of natural resources including timber or other forest produce; and

(v) a farm or plantation.

In connection with paragraph 1 of Article 9, "Dividends":

In the event there is a change in the rate of tax, nothing in this paragraph shall affect the provisions of the Malaysian law under which the tax in
respect of a dividend paid by a company which is a resident of Malaysia from
which Malaysian tax has been, or has been deemed to be, deducted may be adjusted by reference to the rate of tax appropriate to the Malaysian year of assessment immediately following that in which the dividend was paid.

In connection with paragraph 2 of Article 21, "Elimination of Double Taxation":

Taxes which have been relieved or reduced in Malaysia by virtue of
special incentive laws for the promotion of the economic development of Malaysia or any other provisions which may subsequently be introduced in
Malaysia in modification of, or in addition to, those laws or by virtue of the provisions of this Agreement (particularly interest to which paragraphs 3 and 4 of Article 10 apply) shall be allowed as a credit in the U.S.S.R. in an amount equal to the tax which would have been paid if no such relief or reduction had been made.

In connection with Article 22, "Non-discrimination":

Nothing in this Article shall be construed so as to prevent Malaysia from limiting to its nationals the enjoyment of tax incentives designed to promote its economic development.

IN WITNESS whereof the undersigned, duly authorised thereto by
their respective Governments, have signed this Protocol.

Done in duplicate at Moscow, this 31st day of July 1987, each in
Bahasa Malaysia, Russian and the English language, the three texts being
equally authentic. In case of any divergence of interpretation, the interpretation shall be made in accordance with the English text.

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