KUALA LUMPUR, July 22 — Malaysia and the United States (US) have strengthened bilateral tax relations with the implementation of the Foreign Account Tax Compliance Act (FATCA), said the Ministry of Finance (MoF).

In a statement today, the ministry said the enactment of FATCA was following the conclusion of an intergovernmental agreement signed on July 21, 2021.

The agreement between the Malaysian and US governments was signed by Treasury Secretary-General Datuk Asri Hamidon and US Ambassador to Malaysia Brian McFeeters which took place simultaneously in Putrajaya and Kuala Lumpur, in the presence of Deputy Finance Minister II Mohd Shahar Abdullah.

“The conclusion of this agreement shows the close relationship that has long been established between the two countries,” MoF said.

In addition, the ministry said the implementation of FATCA was a success as a result of a series of discussions between the two countries based on the need to have a more effective mechanism to facilitate the exchange of information.

FATCA is one of the initiatives introduced by the US to improve tax-related information exchange practices, particularly involving its citizens, the statement said.

In the Malaysian context, the MoF said the initiative was complementary to efforts made through participation in international forums led by the Organisation for Economic Cooperation and Development (OECD) to further enhance transparency in taxation based on best practices.

Meanwhile, in his speech, Mohd Shahar emphasised that in line with the latest developments in the international taxation system, improvements in transparency and tax information exchange practices between countries require greater cooperation, especially in addressing tax evasion issues.

McFeeters was quoted as saying that the implementation of FATCA was one of the historic moments in the Malaysia-US bilateral relations and he appreciated the efforts made by the Malaysian banking institutions in the compliance aspect which demonstrates excellence as a world-class institution.

According to the MoF, FATCA was an important step towards Malaysia’s efforts in entering into a more comprehensive bilateral tax agreement as well as benefitting local and US taxpayers. — Bernama