eKTP 106

Part 2 of 3 


The recent development by Inland Revenue Board (IRB) The automatic exchange of information (“AEOI”) and Common Reporting Standard (“CRS”)

Key points

  • Malaysia is a participating country of AEOI System (Automatic Exchange of Information) initiated by the OECD.

  • Malaysian tax authority will automatically receive information on offshore bank account owned by its citizens/residents.

  • All Malaysian financial institutions and banks are required to provide information on bank account owned by foreigners or non- Malaysian residents to the tax department. And the tax authority will transmit such information to the account holder’s  country of residence.

Why should we be concerned with CRS?

Entities that are identified as reporting entities within the ambit of the Standard are required to register with Malaysian IRB. Reporting entities must furnish annual reports with prescribed information to Malaysian IRB. This includes specific details on each Reportable Account such as name, address, jurisdiction of residence, tax identification number of the account holder, and the account balance or value.

The following are deemed offences under the relevant CRS laws:

  • failure to provide Malaysian IRB with information in the form, manner and frequency as prescribed in the CRS Rules or CRS Regulations;

  • failure to comply with the due diligence and other obligations as prescribed in the CRS Rules or CRS Regulations;

  • reporting of false information to Malaysian IRB.

The penalties for non-compliance with the prescribed laws are heavy. Any person convicted of an offence may be subject to a fine of not less than RM20,000, imprisonment for a term not exceeding 6 months, or both under  the  CRS  Rules.  Under the CRS Regulations, persons convicted of an offence may be subject   to a fine of not more than RM1,000,000,  imprisonment  for  a  term not more than 2 years, or both.