Tax policy review to continue for sustainable economic development

KUALA LUMPUR: Malaysia will continue to review the tax policy to support sustainable economic development, said the Finance Ministry (MoF) in its 2019 Economic Outlook report.

It said as a Base Erosion and Profit Shifting (BEPS) Associate and member of the exchange of information (EOI) fora, the country will also continue to provide a competitive environment for the business community, especially in attracting foreign direct investment, while assuming an active role in promoting international tax cooperation to prevent cross border tax evasion.

Malaysia became an Organisation for Economic Co-operation and Development (OECD) BEPS Associate by joining the BEPS Inclusive Framework in early 2017, which gave the country an equal footing with the OECD and G20 countries to be directly involved in the formulation of international tax standards in addressing base erosion and profit shifting.

The MoF said as an associate, Malaysia needs to implement the Minimum Standards of the BEPS Action Plan immediately, while continuing to review the rest of the Action Plan under Malaysia’s domestic laws.

The Action Plan aims to create a set of consensus-based international tax rules to address base erosion and profit shifting, protecting jurisdictions tax bases, while enhancing certainty and predictability to taxpayers, beyond securing revenues by realigning taxation with economic activities along value creation.

It comprises four main plans, which includes minimum standard, reinforced international standard, common approach and best practices, as well as an analytical report.