Labuan Offshore Financial Services Authority

April 24, 2009 12:54 ET

Malaysia Implementing OECD Standards on Tax Info Sharing

KUALA LUMPUR, MALAYSIA--(Marketwire - April 24, 2009) - Labuan Offshore Financial Services Authority (LOFSA) of Malaysia has always been committed to international standards on exchange of information (EOI) on taxation and will adhere to new international EOI standards.

LOFSA Authority Member Datuk Ali Abdul Kadir said that even before the latest requirement for EOIs came about, LOFSA had already undertaken a review to remove legal provisions that could impede the free exchange of information. This review is expected to gain Parliamentary consent this year.

In a dialogue with over 100 offshore bankers, trust companies and other offshore players this week, Ali said Malaysia had already committed to the EOI standards detailed in Article 26 of the Organization for Economic Cooperation and Development (OECD)'s Model Tax Convention.

"It is now a matter of time before these standards are substantially implemented as the process had already started," he said.

"We are already moving towards adopting Article 26 of the current OECD Model Tax Convention and also amending the relevant sections of the law," he said.

He went on to say that whilst it is essential that the regulatory structure is amended to ensure it is in compliance with international standards, it is equally important that the market place is kept in consultation in order to create a healthy and competitive business environment in the jurisdiction.

"We have always been co-operative with regulatory and enforcement authorities from other countries on tax matters and financial crime, particularly money laundering.

"We have never positioned ourselves as a secrecy jurisdiction and our main advantages have always been our competitive pricing, pragmatic laws and access to Malaysia's excellent tax treaty network," he added.

The OECD has recently listed Malaysia and Labuan in Category II of its progress report as "Jurisdictions that have committed to the internationally agreed tax standard but have not yet substantially implemented". Singapore, Hong Kong, Belgium and Luxemburg are in the same classification.

LOFSA meets the highest international standards and has received positive assessments by the International Monetary Fund (IMF) under its Offshore Financial Sector Assessment Programme.

In addition, Labuan IBFC has been affirmed as a "low-risk" jurisdiction for money laundering by the Asia Pacific Group on Money Laundering, a division of the Financial Action Task Force and an associate body of OECD.

Contact Information

  • Labuan Offshore Financial Services Authority
    Farah Jaafar-Crossby
    Labuan Offshore Financial Services Authority
    Izam Shah Arif Shah