eKTP 107

AEOI and CRS
Part 3 of 3 

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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.


Timeline of AEOI

The CRS was developed by the Organisation for Economic Cooperation and Development (OECD) to put a global model of automatic exchange of information into practice for the purpose of tax compliance. It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.

The automatic exchange of information (“AEOI”) and Common Reporting Standard (“CRS”) regime was first implemented in Malaysia in December 2016, which included the Income Tax (Automatic Exchange of Financial Account Information) Rules 2016 ("AEOI Rules"). As part of Malaysia’s commitment to implement AEOI, Malaysia has:

  • In 23 December 2017, the AEOI Rules were amended pursuant to the Income Tax (Automatic Exchange of Financial Account Information) (Amendment) Rules 2017 (“2017 Amendment Rules”).

  • In January 2018, the Inland Revenue Board of Malaysia (“IRB”) published the List of Reportable Jurisdictions and the List of Participating Jurisdiction.

  • On 5 February 2018, the IRB issued the Common Reporting Standard Guidance Notes in respect of the compliance requirements for the AEOI Rules (“Guidance Notes”).

  • On 5 February 2018, the Labuan Business Activity Tax (Automatic Exchange of Financial Account Information) Regulations 2018 (“Labuan AEOI Regulations”) was gazetted and are deemed to come into operation as of 1 July 2017.

  • Also, under the Labuan AEOI Regulations, any Labuan entity which is a Financial Institution, is deemed a Reporting Financial Institution and are subject to similar due diligence and reporting requirements.

Under the CRS, Malaysian Financial Institutions (MYFIs) are required to collect and report to Inland Revenue Board of Malaysia (IRBM), financial account information on non-residents. IRBM will exchange this information with the participating foreign tax authorities of those non-residents.

For more information on AEOI and CRS in Malaysia, please refer to the following Legislation link:

CRS obligations are imposed on MYFIs through the operation of the Income Tax (Automatic Exchange of Financial Account Information) Rules 2016 (CRS Rules), Income Tax (Automatic Exchange of Financial Account Information) (Amendment) Rules 2017 (CRS (Amendment) Rules 2017) and Labuan Business Activity (Automatic Exchange of Financial Account Information) Regulations 2018 (CRS Regulations).

More than 100 jurisdictions have committed to exchange the CRS information. Malaysia has committed to exchange the CRS information from 2018 and would also be receiving financial account information on Malaysian residents from other countries' tax authorities. This will help ensure that residents with financial accounts in other countries are complying with their domestic tax laws and act as a deterrent to tax evasion.
The implementation timelines are as follow:

  • Reporting Financial Institutions

Every Reporting Financial Institution is required to report information of non- resident account holders of Reportable Jurisdictions, to the IRB on or before 30 June of the year following the calendar year to which the return relates.

Accordingly, the first reporting in respect of financial account information for the year 2017 will be required to be made to the IRB by 30 June 2018. Notwithstanding this, the reporting deadlines have been extended as follows:

  • Pre-existing individual accounts which are High Value Accounts

Reporting deadline extended to 31 July 2018, pursuant to amendments under the 2017 Amendment Rules.

  • Pre-existing individual accounts which are Low Value Accounts

Reporting deadline extended to 31 July 2019, pursuant to amendments under the 2017 Amendment Rules.