Malaysia joins 113 countries by signing the Intergovernmental Agreement with the United States to implement the Foreign Account Tax Compliance Act.
FATCA is one of the initiatives introduced by the United States 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 forum 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 successful series of discussions between the two countries, based on the need to have an effective mechanism to further facilitates the exchange of information. Deputy Minister of Finance II, Mohd Shahar Abdullah highlighted that with the recent development in the international tax system, the significant 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. In corresponding to this, US Ambassador to Malaysia Brian McFeeters mentioned that the signing of FATCA is a testament to both countries’ history of partnership, and appreciates the efforts undertaken by Malaysia’s financial sectors entities that continue to be in compliant which demonstrate their excellence as world-class institution.
The signing of FATCA is also very pertinent as it will pave way to a more comprehensive bilateral tax agreement which will further benefit the taxpayers of Malaysia and the United States of America.
