Malaysia joins 113 countries in implementing Foreign Account Tax Compliance Act

Photo by Shahrin Yahya/The Edge

Photo by Shahrin Yahya/The Edge

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KUALA LUMPUR (July 22): Malaysia joins 113 countries that have implemented the Foreign Account Tax Compliance Act (FATCA). 

In a statement today, the Ministry of Finance (MoF) said the Malaysian government has signed the intergovernmental agreement with the US government on July 21.

The ministry said the agreement was signed by the Secretary General of Treasury Datuk Asri Hamidon and the US Ambassador to Malaysia, Brian McFeeters. The signing took place virtually at Putrajaya with the presence of Deputy Minister of Finance II Mohd Shahar Abdullah. 

“FATCA is one of the initiatives introduced by the US to improve the practice on exchange of information on tax matters, especially on US persons.

“For Malaysia, this bilateral initiative complements the efforts participated at the international fora led by the Organisation for Economic and Cooperation Development (OECD) to further enhance the tax transparency in accordance with best practices. 

“The adoption of FATCA is the result of a successful series of discussions between the two countries, based on the need to have an effective mechanism to further facilitate the exchange of information,” it said. 

Meanwhile, Shahar in his speech highlighted that with the recent development in the international tax system, the improvement on transparency and exchange of tax information practices between jurisdictions means that countries are now moving towards a greater collaboration, especially in addressing the issue of tax evasion and tax avoidance.

McFeeters, on the other hand, said the signing of FATCA is a testament to both countries' history of partnership, and he appreciates the efforts undertaken by Malaysia’s financial sector entities that continue to be in compliance, which demonstrate their excellence as a world-class institution. 

“The signing of FATCA is also very pertinent as it will pave the way to a more comprehensive bilateral tax agreement which will further benefit the taxpayers of Malaysia and the US,” MoF added. 

Kathy Fong