23rd July 2021 - 2 min read
Malaysia has signed a tax compliance agreement with the United States, joining 113 countries in implementing the Foreign Account Tax Compliance Act (FATCA). FATCA is an initiative by the US aimed at facilitating the exchange of information on tax matters, especially on US citizens.
The Ministry of Finance Malaysia revealed that the enactment of FACTA came following the conclusion of an intergovernmental agreement signed on 21 July. The signing of the agreement between treasury secretary-general Datuk Asri Hamidon and US ambassador Brian McFeeters took place virtually in the presence of Deputy Finance Minister II Mohd Shahar Abdullah.
According to Shahar, the recent developments in the international tax system, significant improvement on transparency, and exchange of tax information practices between jurisdictions mean that countries are now moving towards greater collaboration. This is especially in the case of addressing tax evasion and tax avoidance.
Meanwhile, McFeeters said that the implementation of FATCA was one of the historic moments in Malaysia-US bilateral relations. He also expressed appreciation for the efforts in the compliance aspect made by Malaysian banking institutions, which demonstrate excellence as world-class institutions.
“The conclusion of this agreement shows the close relationship that has long been established between the two countries,” the finance ministry said in its statement. The ministry also added that the agreement would pave way to a more comprehensive bilateral tax agreement which would further benefit the taxpayers of Malaysia and the US.
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