KUALA LUMPUR: Malaysia is committed to meet the internationally-agreed tax standards by signing the Organisation for Economic and Cooperation Development (OECD)-led initiative, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). In a statement today, the Ministry of Finance said Deputy Finance Minister I, Datuk Wira Othman Aziz, signed the MLI yesterday at OECD’s headquarters in Paris.
The ministry said by signing the MLI, Malaysia, together with other countries including China, Indonesia, Australia, India, Singapore and Japan, had taken a proactive position in executing the best tax practices under international standards, including the implementation of Base Erosion and Profit Shifting (BEPS) action plans. The adoption of MLI was the result of comprehensive discussions of over 100 jurisdictions, including Malaysia, at the Ad Hoc Group Meeting on MLI in preserving the taxing right of countries by taking into account the development of the latest cross-border activities in trade and investments,” it said. It said the importance of signing the MLI to Malaysia was due to the significant number of enforced double taxation avoidance agreements, which currently stands at 73 countries. Othman said the implementation of this initiative was very pertinent as it aimed to close gaps that allowed profit to be artificially shifted to low- or no-tax jurisdictions. “With the advent of globalised business activities and extensive cross-border transactions, it was extremely important that profits were attributed to the jurisdictions where substantive economic activities were being carried out. Malaysia as a BEPS associate has to fulfil its commitment in order to be competitive in attracting and promoting investments, including foreign direct investments, for long-term sustainability and further enhancing the inclusive economic development model,” he said. Othman said Malaysia was committed to meet internationally-agreed tax standards especially in the areas of automatic exchange of information (AEOI). He said to-date, Malaysia was a signatory of the Multilateral Competent Authority Agreement on Common Reporting Standards and Country by Country Reporting as well as the Convention on Mutual Administrative Assistance in Tax Matters, and was scheduled to start AEOI discussions with the other participating jurisdictions in September 2018.
