Inland Revenue Board of Malaysia (IRBM) issued rules on automatic exchange of financial account information on 23 December 2016. The several legislations were introduced on that date including the Income Tax (Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information) Order 2016; the Income Tax (Convention on Mutual Administrative Assistance in Tax Matters); and Income Tax (Automatic Exchange of Financial Account Information) Rules 2016 (AEOI Rules).
Under the new legislations, Malaysia has committed to exchange information with respect to different types of accounts opened and maintained by the Malaysian financial institutions in accordance with the different timelines. The Inland Revenue Board of Malaysia (IRB) has announced that the first list of reportable jurisdictions will be published by 15 January 2018, and will be revised by 15 January of the following years.
The AEOI Rules, which came into effect on 1 January 2017, implements the CRS in Malaysia, with certain modifications. The AEOI Rules apply to every Reporting Financial Institution, which is defined as a Financial Institution that is resident in Malaysia (excluding any branch of that Financial Institution that is located outside of Malaysia) and any branch of a Financial Institution that is not resident in Malaysia if that branch is located in Malaysia. A Financial Institution is defined under Section VIII of the CRS.
The Rules became effective from 1 January 2017 and the full details are available on the Federal Gazette’s website.