Malaysian tax status - the best choice for overseas asset allocation in the context of CRS!

CRS

Common Reporting Standard (CRS): Translated as "Uniform Reporting Standard", it was launched in July 2014 by the Organization for Economic Cooperation and Development (OECD).

Guidelines for the regular exchange of information on financial accounts of non-tax residents in participating jurisdictions aimed at improving tax transparency and combating the use of cross-border financial accounts for tax evasion through enhanced global tax cooperation.

As of 2024, 147 countries (territories) around the world have implemented or committed to implementing CRS filings.

Since 2020, when China's Ministry of Finance and General Administration of Taxation (SAT) issued the Announcement on Policies Regarding Individual Income Taxes on Income from Abroad, resident individuals are required to file a tax return from March 1st to June 30th each year for income earned from outside of China in the previous year.

If only China tax resident status is available, the exchange of information between banks via CRS will require back taxes in accordance with China's domestic tax system. Whereas, Malaysian tax ID can effectively deal with CRS.

01

Determination of Tax Residence in Malaysia

Apply for a Malaysian personal tax ID number can be "converted" tax resident status, and later open a bank account in another country to fill in the form directly fill in the Malaysian tax ID number and Malaysian contact information (address + telephone), the financial system will recognize that the financial account under the asset information belongs to the Malaysian tax resident, then this account will only feedback This account will only feedback to the Malaysian Tax Department.

However, since the processor has not been residing in Malaysia for a long period of time and earning an income, the Malaysian Revenue Department is not required to tax the tax number holder even after receiving the feedback.

02

Malaysia Tax Code Advantage

Freedom to choose where to file tax returns to avoid CRS

Malaysia belongs to the principle of territorial taxation, the acceptance of tax code status is high, which is a great protection for the safety of personal assets overseas. After becoming a tax resident of Malaysia, the CRS information is fed back to Malaysia when opening bank accounts overseas in the future.

Conversion of tax resident status

Once you have a Malaysian Personal Tax Identification Number (PIN), the system will recognize you as a tax resident of Malaysia if you use your PIN and Malaysian contact information (address + phone number) when you open a bank account in a foreign country or when you fill in a declaration form.

Overseas account opening is more convenient

Having a Malaysian tax ID number, address and phone number makes it easier to open a bank account in other countries with a wider range of options.

03

How to Apply for a Malaysian Tax ID Number
Requirements for application

• Passport (copy/scan)
• Long-term validity of Malaysia telephone number (provided by a professional team)
• Proof of address (from a team of professionals)

processing cycle

• Overall lead time 7-10 working days (excluding Malay national public holiday days)
• After successfully applying for a tax ID number, the tax ID number can be found on the official website of the Malaysian Inland Revenue Department (no login required)

Under the mechanism of CRS global taxation and the transparency of personal assets, for HNWIs, in addition to the need to face the risk of loss of funds due to back taxes, the risk of privacy being exposed also needs to be given high priority. ThereforeMalaysian tax status, the best choice for overseas asset allocation in the context of CRS!

If you are interested in planning a CRS risk avoidance program, applying for Malaysian tax residency status, etc., please feel free to contact us!