Malaysia – United States Tax Treaty
The Malaysia-United States tax treaty caps withholding on dividends at 0%, and interest at 15%. Royalties are taxed at a uniform 10% across all categories. Private pensions are taxable only in the country of residence, with no withholding at source. This is one of 24 active treaties in Malaysia's network and one of 64 in United States's. The general dividend rate of 0% is below the median in both countries' treaty networks (Malaysia: 10%, United States: 15%).
Verified data
Lembaga Hasil Dalam Negeri Malaysia (hasil.gov.my) - Double Taxation Agreements (Treaty list verified April 2026. Rates from individual treaty texts (Articles 10-12). Malaysia has single-tier dividend system: 0% WHT on dividends. Interest WHT 15%, royalty WHT 10%.)
Withholding Rate Summary
Source: Malaysia Treaty Reference| Income Type | Treaty Rate | Statutory Rate (Malaysia) |
|---|---|---|
| Dividends (general) Portfolio investors | 0% | 0% |
| Dividends (qualified) Beneficial owner is a company holding >= 10% of voting stock | 0% | 0% |
| Interest Bank interest, bonds, loans | 15% | 15% |
| Royalties (avg) Patents, copyright, know-how, film/TV | 10% | — |
| Pensions Private pension distributions | 0% | — |
| Social Security Government social security benefits | 0% | — |
“Treaty Rate” is the maximum withholding permitted under this treaty. The actual effective rate may be lower if domestic law provides a more favorable rate independently. “Statutory Rate (Malaysia)” shows the rate that applies when no treaty benefit is claimed. Qualified dividend rate requires: Beneficial owner is a company holding >= 10% of voting stock.
Dividends
The general dividend rate of 0% applies to portfolio investors. A reduced rate of 0% is available when beneficial owner is a company holding >= 10% of voting stock. Without the treaty, the statutory withholding rate on dividends is 0%.
Source: Malaysia Treaty Reference
Interest
Interest payments (bank interest, bonds, loans) are subject to 15% withholding under this treaty, compared to the 15% statutory rate. This represents a no reduction from the statutory rate.
Source: Malaysia Treaty Reference
Royalties
Royalty withholding rates vary by the type of intellectual property. This treaty distinguishes 4 categories, with rates ranging from 10% to 10%.
Source: Malaysia Treaty Reference
Pensions & Social Security
Private pension distributions are taxable only in the country of residence, with no withholding at source. Government social security benefits are exempt from source-country withholding.
Source: Malaysia Treaty Reference
Comparative Context
🇲🇾Malaysia's Network
Among Malaysia's 24 active treaty partners, the 0% general dividend rate ranks 7th (median: 10%).
| Partner | Rate |
|---|---|
| Netherlands | 0% |
| Singapore | 0% |
| Turkey | 0% |
| United States (this treaty) | 0% |
| Vietnam | 0% |
| Saudi Arabia | 5% |
| United Arab Emirates | 10% |
🇺🇸United States's Network
Among United States's 64 active treaty partners, the 0% general dividend rate ranks 4th (median: 15%).
| Partner | Rate |
|---|---|
| United Arab Emirates | 0% |
| Brazil | 0% |
| Hong Kong | 0% |
| Malaysia (this treaty) | 0% |
| Saudi Arabia | 5% |
| Bulgaria | 10% |
| China | 10% |