by SHAHEERA AZNAM SHAH / pic by TMR FILE
MALAYSIA and the US are strengthening the bilateral taxation partnership through the signing of the intergovernmental agreement of the Foreign Account Tax Compliance Act (FATCA).
The Finance Ministry said the conclusion to the agreement signifies the close relationship between the two countries which has long been forged.
“The intergovernmental agreement between the Malaysian government and the US was signed on July 21, 2021 by the Secretary-General of the Treasury Datuk Asri Hamidon and the US Ambassador to Malaysia Brian McFeeters. It took place simultaneously in Putrajaya and Kuala Lumpur.
“The conclusion of this agreement shows the close relationship that has long been forged between both countries,” the ministry said in a statement yesterday.
Through this agreement, Malaysia joins 113 countries that have implemented the tax compliance act.
FATCA is one of the initiatives introduced by the US to improve the practices of tax-related information exchange, particularly involving US citizens.
For Malaysia, the initiative will complement the efforts made through the country’s participation in the international forums led by Organisation for Economic and Cooperation Development (OECD) which has been taken to continue improving transparency in tax practices.
“The success of FATCA implementation is a result of the discussions between Malaysia and the US which revolved around the need to have more effective mechanisms for facilitating the exchange of information,” the ministry said.
Present at the signing ceremony, Deputy Minister of Finance II Mohd Shahar Abdullah said the latest developments of the international taxation system, improvements in transparency and the practice of exchanging tax information between countries requires greater cooperation, especially in addressing the issue of tax avoidance and evasion.
Meanwhile, McFeeters said the FATCA is a testament to the history of partnership between the two countries while applauding the efforts taken by Malaysian banking institutions which have continued to be in compliance and showed their excellence as a world-class institution.
“The FATCA agreement is an important aspect to Malaysia as it will lead to a more comprehensive bilateral tax agreement which will further benefit the taxpayers of Malaysia and the US,” it said.