Clarification – Application of tax treaties in calculating BPT for trading representative offices

The tax authorities issued Circular Letter SE-2/PJ.03/2008 on 31 July 2008 to clarify the application of tax treaties in calculating the branch profits tax rate applicable to representative offices engaged in trading activities.

Trading representative offices are currently taxed on 1% of their gross export proceeds, at a final tax rate of 0.44% comprising corporate income tax and branch profits tax. The circular clarifies that if an applicable tax trea…