AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA

AND THE GOVERNMENT OF MALAYSIA TO IMPROVE INTERNATIONAL TAX

COMPLIANCE AND TO IMPLEMENT THE FOREIGN ACCOUNT TAX COMPLIANCE ACT

Whereas, the Government of the United States of America and the Government of Malaysia 

(each, a “Party,” and together, the “Parties”) desire to conclude an agreement to improve 

international tax compliance; 

Whereas, the United States of America enacted provisions commonly known as the 

Foreign Account Tax Compliance Act (“FATCA”), which introduce a reporting regime for 

financial institutions with respect to certain accounts; 

Whereas, the Government of Malaysia is supportive of the underlying policy goal of FATCA 

to improve tax compliance; 

Whereas, FATCA has raised a number of issues, including that Malaysian financial

institutions may not be able to comply with certain aspects of FATCA due to domestic legal 

impediments; 

Whereas, an intergovernmental approach to FATCA implementation would address legal 

impediments and reduce burdens for Malaysian financial institutions; 

Whereas, the Parties desire to conclude an agreement to improve international tax 

compliance and provide for the implementation of FATCA based on domestic reporting 

and automatic exchange, subject to the confidentiality and other protections provided for

herein, including the provisions limiting the use of the information exchanged; 

Now, therefore, the Parties have agreed as follows: 

Article 1

Definitions

1. For purposes of this agreement and any annexes thereto (“Agreement”), the 

following terms shall have the meanings set forth below: 

a) The term “United States” means the United States of America, including the 

States thereof, but does not include the U.S. Territories. Any reference to a 

“State” of the United States includes the District of Columbia. 
 

 

 

 

b) The term “U.S. Territory” means American Samoa, the Commonwealth of the

Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, or the U.S. 

Virgin Islands. 

c) The term “IRS” means the U.S. Internal Revenue Service. 

d) The term “Malaysia” means the territories of the Federation of Malaysia, the 

territorial sea of Malaysia, as well as the sea-bed and subsoil of the territorial 

sea and the airspace above such areas and any area extending beyond the 

limits of the territorial sea of Malaysia, and the sea-bed and subsoil of any such

area, which has been or may hereafter be designated under the laws of

Malaysia as an area over which Malaysia has sovereign rights and jurisdiction

for the purposes of exploring and exploiting the natural resources, whether

living or non-living, consistent with international law. 

e) The term “Partner Jurisdiction” means a jurisdiction that has in effect an 

agreement with the United States to facilitate the implementation of FATCA. 

The IRS shall publish a list identifying all Partner Jurisdictions. 

f) The term “Competent Authority” means: 

(1) in the case of the United States, the Secretary of the Treasury or his

delegate; and 

(2) in the case of Malaysia, the Minister of Finance or his authorized 

representative. 

g) The term “Financial Institution” means a Custodial Institution, a Depository 

Institution, an Investment Entity, or a Specified Insurance Company. 

h) The term “Custodial Institution” means any Entity that holds, as a substantial

portion of its business, financial assets for the account of others. An entity

holds financial assets for the account of others as a substantial portion of its 

business if the entity’s gross income attributable to the holding of financial 

assets and related financial services equals or exceeds 20 percent of the

entity’s gross income during the shorter of: (i) the three-year period that ends

on December 31 (or the final day of a non-calendar year accounting period)

prior to the year in which the determination is being made; or (ii) the period 

during which the entity has been in existence. 

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i) The term “Depository Institution” means any Entity that accepts deposits in 

the ordinary course of a banking or similar business. 

j) The term “Investment Entity” means any Entity that conducts as a business 

(or is managed by an entity that conducts as a business) one or more of the 

following activities or operations for or on behalf of a customer: 

(1) trading in money market instruments (cheques, bills, certificates of 

deposit, derivatives, etc.); foreign exchange; exchange, interest rate and 

index instruments; transferable securities; or commodity futures 

trading; 

(2) individual and collective portfolio management; or 

(3) otherwise investing, administering, or managing funds or money on 

behalf of other persons. 

This subparagraph 1(j) shall be interpreted in a manner consistent with 

similar language set forth in the definition of “financial institution” in the 

Financial Action Task Force Recommendations. 

k) The term “Specified Insurance Company” means any Entity that is an

insurance company (or the holding company of an insurance company) that 

issues, or is obligated to make payments with respect to, a Cash Value 

Insurance Contract or an Annuity Contract. 

l) The term “Malaysian Financial Institution” means (i) any Financial

Institution resident in Malaysia, but excluding any branch of such Financial

Institution that is located outside Malaysia, and (ii) any branch of a Financial 

Institution not resident in Malaysia, if such branch is located in Malaysia. 

m) The term “Partner Jurisdiction Financial Institution” means (i) any 

Financial Institution established in a Partner Jurisdiction, but excluding any 

branch of such Financial Institution that is located outside the Partner 

Jurisdiction, and (ii) any branch of a Financial Institution not established in the 

Partner Jurisdiction, if such branch is located in the Partner Jurisdiction. 

n) The term “Reporting Malaysian Financial Institution” means any Malaysian 

Financial Institution that is not a Non-Reporting Malaysian Financial 

Institution. 

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o) 

p) 

q) 

The term “Non‐Reporting Malaysian Financial Institution” means any 

Malaysian Financial Institution, or other Entity in Malaysia, that is described 

in Annex II as a Non-Reporting Malaysian Financial Institution or that 

otherwise qualifies as a deemed-compliant FFI or an exempt beneficial owner 

under relevant U.S. Treasury Regulations. 

The term “Non‐Participating Financial Institution” means a nonparticipating FFI, as that term is defined in relevant U.S. Treasury Regulations, 

but does not include a Malaysian Financial Institution or other Partner 

Jurisdiction Financial Institution other than a Financial Institution treated as a 

Non-Participating Financial Institution pursuant to subparagraph 3(b) of

Article 5 of this Agreement or the corresponding provision in an agreement 

between the United States and a Partner Jurisdiction. 

The term “Financial Account” means an account maintained by a Financial 

Institution, and includes: 

(1) in the case of an Entity that is a Financial Institution solely because it is

an Investment Entity, any equity or debt interest (other than interests 

that are regularly traded on an established securities market) in the 

Financial Institution; 

(2) in the case of a Financial Institution not described in subparagraph 

1(q)(1) of this Article, any equity or debt interest in the Financial 

Institution (other than interests that are regularly traded on an

established securities market), if (i) the value of the debt or equity

interest is determined, directly or indirectly, primarily by reference to 

assets that give rise to U.S. Source Withholdable Payments, and (ii) the 

class of interests was established with a purpose of avoiding reporting in 

accordance with this Agreement; and 

(3) any Cash Value Insurance Contract and any Annuity Contract issued or 

maintained by a Financial Institution, other than a non-investmentlinked, non-transferable immediate life annuity that is issued to an 

individual and monetizes a pension or disability benefit provided under 

an account that is excluded from the definition of Financial Account in

Annex II. 

Notwithstanding the foregoing, the term “Financial Account” does not include 

any account that is excluded from the definition of Financial Account in Annex 

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II. For purposes of this Agreement, interests are “regularly traded” if there is a

meaningful volume of trading with respect to the interests on an ongoing basis, 

and an “established securities market” means an exchange that is officially 

recognized and supervised by a governmental authority in which the market

is located and that has a meaningful annual value of shares traded on the

exchange. For purposes of this subparagraph 1(q), an interest in a Financial 

Institution is not “regularly traded” and shall be treated as a Financial Account 

if the holder of the interest (other than a Financial Institution acting as an

intermediary) is registered on the books of such Financial Institution. The 

preceding sentence will not apply to interests first registered on the books of

such Financial Institution prior to July 1, 2014, and with respect to interests 

first registered on the books of such Financial Institution on or after July 1,

2014, a Financial Institution is not required to apply the preceding sentence 

prior to January 1, 2016. 

r) The term “Depository Account” includes any commercial, checking, savings, 

time, or thrift account, or an account that is evidenced by a certificate of

deposit, thrift certificate, investment certificate, certificate of indebtedness, or

other similar instrument maintained by a Financial Institution in the ordinary 

course of a banking or similar business. A Depository Account also includes an 

amount held by an insurance company pursuant to a guaranteed investment 

contract or similar agreement to pay or credit interest thereon. 

s) The term “Custodial Account” means an account (other than an Insurance 

Contract or Annuity Contract) for the benefit of another person that holds any 

financial instrument or contract held for investment (including, but not limited 

to, a share or stock in a corporation, a note, bond, debenture, or other evidence

of indebtedness, a currency or commodity transaction, a credit default swap, a

swap based upon a non-financial index, a notional principal contract, an

Insurance Contract or Annuity Contract, and any option or other derivative 

instrument). 

t) The term “Equity Interest” means, in the case of a partnership that is a 

Financial Institution, either a capital or profits interest in the partnership. In

the case of a trust that is a Financial Institution, an Equity Interest is 

considered to be held by any person treated as a settlor or beneficiary of all or 

a portion of the trust, or any other natural person exercising ultimate effective 

control over the trust. A Specified U.S. Person shall be treated as being a 

beneficiary of a foreign trust if such Specified U.S. Person has the right to 

receive directly or indirectly (for example, through a nominee) a mandatory 

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distribution or may receive, directly or indirectly, a discretionary distribution 

from the trust. 

u) The term “Insurance Contract” means a contract (other than an Annuity 

Contract) under which the issuer agrees to pay an amount upon the occurrence 

of a specified contingency involving mortality, morbidity, accident, liability, or

property risk. 

v) The term “Annuity Contract” means a contract under which the issuer agrees

to make payments for a period of time determined in whole or in part by 

reference to the life expectancy of one or more individuals. The term also

includes a contract that is considered to be an Annuity Contract in accordance

with the law, regulation, or practice of the jurisdiction in which the contract

was issued, and under which the issuer agrees to make payments for a term of 

years. 

w) The term “Cash Value Insurance Contract” means an Insurance Contract 

(other than an indemnity reinsurance contract between two insurance 

companies) that has a Cash Value greater than $50,000. 

x) The term “Cash Value” means the greater of (i) the amount that the 

policyholder is entitled to receive upon surrender or termination of the

contract (determined without reduction for any surrender charge or policy

loan), and (ii) the amount the policyholder can borrow under or with regard 

to the contract. Notwithstanding the foregoing, the term “Cash Value” does not 

include an amount payable under an Insurance Contract as: 

(1) a personal injury or sickness benefit or other benefit providing

indemnification of an economic loss incurred upon the occurrence of the

event insured against; 

(2) a refund to the policyholder of a previously paid premium under an 

Insurance Contract (other than under a life insurance contract) due to 

policy cancellation or termination, decrease in risk exposure during the 

effective period of the Insurance Contract, or arising from a

redetermination of the premium due to correction of posting or other 

similar error; or 

(3) a policyholder dividend based upon the underwriting experience of the 

contract or group involved. 

y) The term “U.S. Reportable Account” means a Financial Account maintained 

by a Reporting Malaysian Financial Institution and held by one or more

Specified U.S. Persons or by a Non-U.S. Entity with one or more Controlling 

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Persons that is a Specified U.S. Person. Notwithstanding the foregoing, an 

account shall not be treated as a U.S. Reportable Account if such account is not 

identified as a U.S. Reportable Account after application of the due diligence 

procedures in Annex I. 

z) The term “Account Holder” means the person listed or identified as the holder

of a Financial Account by the Financial Institution that maintains the account. 

A person, other than a Financial Institution, holding a Financial Account for the 

benefit or account of another person as agent, custodian, nominee, signatory,

investment advisor, or intermediary, is not treated as holding the account for 

purposes of this Agreement, and such other person is treated as holding the 

account. For purposes of the immediately preceding sentence, the term 

“Financial Institution” does not include a Financial Institution organized or 

incorporated in a U.S. Territory. In the case of a Cash Value Insurance Contract 

or an Annuity Contract, the Account Holder is any person entitled to access the 

Cash Value or change the beneficiary of the contract. If no person can access 

the Cash Value or change the beneficiary, the Account Holder is any person

named as the owner in the contract and any person with a vested entitlement 

to payment under the terms of the contract. Upon the maturity of a Cash Value

Insurance Contract or an Annuity Contract, each person entitled to receive a 

payment under the contract is treated as an Account Holder. 

aa) The term “U.S. Person” means a U.S. citizen or resident individual, a

partnership or corporation organized in the United States or under the laws of

the United States or any State thereof, a trust if (i) a court within the United

States would have authority under applicable law to render orders or 

judgments concerning substantially all issues regarding administration of the 

trust, and (ii) one or more U.S. persons have the authority to control all

substantial decisions of the trust, or an estate of a decedent that is a citizen or 

resident of the United States. This subparagraph 1(aa) shall be interpreted in

accordance with the U.S. Internal Revenue Code. 

bb) The term “Specified U.S. Person” means a U.S. Person, other than: (i) a

corporation the stock of which is regularly traded on one or more established 

securities markets; (ii) any corporation that is a member of the same expanded

affiliated group, as defined in section 1471(e)(2) of the U.S. Internal Revenue 

Code, as a corporation described in clause (i); (iii) the United States or any 

wholly owned agency or instrumentality thereof; (iv) any State of the United 

States, any U.S. Territory, any political subdivision of any of the foregoing, or 

any wholly owned agency or instrumentality of any one or more of the

foregoing; (v) any organization exempt from taxation under section 501(a) of

the U.S. Internal Revenue Code or an individual retirement plan as defined in 

section 7701(a)(37) of the U.S. Internal Revenue Code; (vi) any bank as defined 

in section 581 of the U.S. Internal Revenue Code; (vii) any real estate

investment trust as defined in section 856 of the U.S. Internal Revenue Code; 

(viii) any regulated investment company as defined in section 851 of the U.S. 

Internal Revenue Code or any entity registered with the U.S. Securities and 

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Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 

80a-64); (ix) any common trust fund as defined in section 584(a) of the U.S.

Internal Revenue Code; (x) any trust that is exempt from tax under section 

664(c) of the U.S. Internal Revenue Code or that is described in section 

4947(a)(1) of the U.S. Internal Revenue Code; (xi) a dealer in securities, 

commodities, or derivative financial instruments (including notional principal

contracts, futures, forwards, and options) that is registered as such under the 

laws of the United States or any State; (xii) a broker as defined in section 

6045(c) of the U.S. Internal Revenue Code; or (xiii) any tax-exempt trust under 

a plan that is described in section 403(b) or section 457(g) of the U.S. Internal 

Revenue Code. 

cc) The term “Entity” means a legal person or a legal arrangement such as a trust. 

dd) The term “Non‐U.S. Entity” means an Entity that is not a U.S. Person. 

ee) The term “U.S. Source Withholdable Payment” means any payment of

interest (including any original issue discount), dividends, rents, salaries,

wages, premiums, annuities, compensations, remunerations, emoluments, and 

other fixed or determinable annual or periodical gains, profits, and income, if 

such payment is from sources within the United States. Notwithstanding the

foregoing, a U.S. Source Withholdable Payment does not include any payment 

that is not treated as a withholdable payment in relevant U.S. Treasury

Regulations. 

ff) An Entity is a “Related Entity” of another Entity if either Entity controls the 

other Entity, or the two Entities are under common control. For this purpose 

control includes direct or indirect ownership of more than 50 percent of the 

vote or value in an Entity. Notwithstanding the foregoing, Malaysia may treat 

an Entity as not a Related Entity of another Entity if the two Entities are not 

members of the same expanded affiliated group as defined in section 

1471(e)(2) of the U.S. Internal Revenue Code. 

gg) The term “U.S. TIN” means a U.S. federal taxpayer identifying number. 

hh) The term “Controlling Persons” means the natural persons who exercise 

control over an Entity. In the case of a trust, such term means the settlor, the 

trustees, the protector (if any), the beneficiaries or class of beneficiaries, and 

any other natural person exercising ultimate effective control over the trust, 

and in the case of a legal arrangement other than a trust, such term means 

persons in equivalent or similar positions. The term “Controlling Persons” 

shall be interpreted in a manner consistent with the Financial Action Task 

Force Recommendations. 

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2. Any term not otherwise defined in this Agreement shall, unless the context 

otherwise requires or the Competent Authorities agree to a common meaning (as 

permitted by domestic law), have the meaning that it has at that time under the law of the 

Party applying this Agreement, any meaning under the applicable tax laws of that Party 

prevailing over a meaning given to the term under other laws of that Party. 

Article 2

Obligations to Obtain and Exchange Information with Respect to U.S. Reportable

Accounts

1. Subject to the provisions of Article 3 of this Agreement, Malaysia shall obtain the 

information specified in paragraph 2 of this Article with respect to all U.S. Reportable

Accounts and shall annually exchange this information with the United States on an 

automatic basis. 

2. The information to be obtained and exchanged with respect to each U.S. Reportable 

Account of each Reporting Malaysian Financial Institution is: 

a) the name, address, and U.S. TIN of each Specified U.S. Person that is an Account 

Holder of such account and, in the case of a Non-U.S. Entity that, after 

application of the due diligence procedures set forth in Annex I, is identified as

having one or more Controlling Persons that is a Specified U.S. Person, the 

name, address, and U.S. TIN (if any) of such entity and each such Specified U.S. 

Person; 

b) the account number (or functional equivalent in the absence of an account 

number); 

c) the name and identifying number of the Reporting Malaysian Financial

Institution; 

d) the account balance or value (including, in the case of a Cash Value Insurance 

Contract or Annuity Contract, the Cash Value or surrender value) as of the end 

of the relevant calendar year or other appropriate reporting period or, if the 

account was closed during such year, immediately before closure; 

e) in the case of any Custodial Account: 

(1) the total gross amount of interest, the total gross amount of dividends,

and the total gross amount of other income generated with respect to the 

assets held in the account, in each case paid or credited to the account (or 

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with respect to the account) during the calendar year or other 

appropriate reporting period; and 

(2) the total gross proceeds from the sale or redemption of property paid or 

credited to the account during the calendar year or other appropriate 

reporting period with respect to which the Reporting Malaysian 

Financial Institution acted as a custodian, broker, nominee, or otherwise 

as an agent for the Account Holder; 

f) in the case of any Depository Account, the total gross amount of interest paid 

or credited to the account during the calendar year or other appropriate 

reporting period; and 

g) in the case of any account not described in subparagraph 2(e) or 2(f) of this 

Article, the total gross amount paid or credited to the Account Holder with

respect to the account during the calendar year or other appropriate reporting

period with respect to which the Reporting Malaysian Financial Institution is

the obligor or debtor, including the aggregate amount of any redemption

payments made to the Account Holder during the calendar year or other 

appropriate reporting period. 

Article 3

Time and Manner of Exchange of Information

1. For purposes of the exchange obligation in Article 2 of this Agreement, the amount 

and characterization of payments made with respect to a U.S. Reportable Account may be 

determined in accordance with the principles of the tax laws of Malaysia. 

2. For purposes of the exchange obligation in Article 2 of this Agreement, the 

information exchanged shall identify the currency in which each relevant amount is 

denominated. 

3. With respect to paragraph 2 of Article 2 of this Agreement, information is to be 

obtained and exchanged with respect to 2014 and all subsequent years, except that: 

a) the information to be obtained and exchanged with respect to 2014 is only the 

information described in subparagraphs 2(a) through 2(d) of Article 2 of this 

Agreement; 

10 
 

 

 

 

b) the information to be obtained and exchanged with respect to 2015 is the 

information described in subparagraphs 2(a) through 2(g) of Article 2 of this 

Agreement, except for gross proceeds described in subparagraph 2(e)(2) of

Article 2 of this Agreement; and 

c) the information to be obtained and exchanged with respect to 2016 and 

subsequent years is the information described in subparagraphs 2(a) through

2(g) of Article 2 of this Agreement; 

4. Notwithstanding paragraph 3 of this Article, with respect to each U.S. Reportable

Account maintained by a Reporting Malaysian Financial Institution as of June 30, 2014, 

and subject to paragraph 2 of Article 6 of this Agreement, Malaysia is not required to 

obtain and include in the exchanged information the U.S. TIN of any relevant person if 

such U.S. TIN is not in the records of the Reporting Malaysian Financial Institution. In such 

a case, Malaysia shall obtain and include in the exchanged information the date of birth of

the relevant person, if the Reporting Malaysian Financial Institution has such date of birth 

in its records. 

5. Subject to paragraphs 3 and 4 of this Article, the information described in Article 2

of this Agreement shall be exchanged by the later of nine months after the end of the 

calendar year to which the information relates or the next September 30th after the 

Agreement enters into force. 

6. The Competent Authorities of Malaysia and the United States shall enter into an

agreement or arrangement under the mutual agreement procedure provided for in Article

8 of this Agreement, which shall: 

a) establish the procedures for the automatic exchange obligations described in 

Article 2 of this Agreement; 

b) prescribe rules and procedures as may be necessary to implement Article 5 of

this Agreement; and 

c) establish as necessary procedures for the exchange of the information

reported under subparagraph 1(b) of Article 4 of this Agreement. 

7. All information exchanged shall be subject to the confidentiality and other 

protections provided for in Article 9 of this Agreement, including the provisions limiting 

the use of the information exchanged. 

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Article 4

Application of FATCA to Malaysian Financial Institutions

1. Treatment of Reporting Malaysian Financial Institutions. Each Reporting

Malaysian Financial Institution shall be treated as complying with, and not subject to 

withholding under, section 1471 of the U.S. Internal Revenue Code if Malaysia complies

with its obligations under Articles 2 and 3 of this Agreement with respect to such

Reporting Malaysian Financial Institution, and the Reporting Malaysian Financial

Institution: 

a) identifies U.S. Reportable Accounts and reports annually to the Malaysian 

Competent Authority the information required to be reported in paragraph 2 

of Article 2 of this Agreement in the time and manner described in Article 3 of

this Agreement; 

b) for each of 2015 and 2016, reports annually to the Malaysian Competent 

Authority the name of each Non-Participating Financial Institution to which it 

has made payments and the aggregate amount of such payments; 

c) complies with the applicable registration requirements on the IRS FATCA 

registration website; 

d) to the extent that a Reporting Malaysian Financial Institution is (i) acting as a 

qualified intermediary (for purposes of section 1441 of the U.S. Internal 

Revenue Code) that has elected to assume primary withholding responsibility

under chapter 3 of subtitle A of the U.S. Internal Revenue Code, (ii) a foreign 

partnership that has elected to act as a withholding foreign partnership (for

purposes of both sections 1441 and 1471 of the U.S. Internal Revenue Code),

or (iii) a foreign trust that has elected to act as a withholding foreign trust (for 

purposes of both sections 1441 and 1471 of the U.S. Internal Revenue Code),

withholds 30 percent of any U.S. Source Withholdable Payment to any NonParticipating Financial Institution; and 

e) in the case of a Reporting Malaysian Financial Institution that is not described 

in subparagraph 1(d) of this Article and that makes a payment of, or acts as an 

intermediary with respect to, a U.S. Source Withholdable Payment to any NonParticipating Financial Institution, the Reporting Malaysian Financial 

Institution provides to any immediate payor of such U.S. Source Withholdable 

Payment the information required for withholding and reporting to occur with 

respect to such payment. 

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Notwithstanding the foregoing, a Reporting Malaysian Financial Institution with respect 

to which the conditions of this paragraph 1 are not satisfied shall not be subject to 

withholding under section 1471 of the U.S. Internal Revenue Code unless such Reporting 

Malaysian Financial Institution is treated by the IRS as a Non-Participating Financial 

Institution pursuant to subparagraph 3(b) of Article 5 of this Agreement. 

2. Suspension of Rules Relating to Recalcitrant Accounts. The United States shall 

not require a Reporting Malaysian Financial Institution to withhold tax under section 

1471 or 1472 of the U.S. Internal Revenue Code with respect to an account held by a 

recalcitrant account holder (as defined in section 1471(d)(6) of the U.S. Internal Revenue 

Code), or to close such account, if the U.S. Competent Authority receives the information

set forth in paragraph 2 of Article 2 of this Agreement, subject to the provisions of Article 

3 of this Agreement, with respect to such account. 

3. Specific Treatment of Malaysian Retirement Plans. The United States shall 

treat as deemed-compliant FFIs or exempt beneficial owners, as appropriate, for purposes 

of sections 1471 and 1472 of the U.S. Internal Revenue Code, Malaysian retirement plans 

described in Annex II. For this purpose, a Malaysian retirement plan includes an Entity 

established or located in, and regulated by, Malaysia, or a predetermined contractual or 

legal arrangement, operated to provide pension or retirement benefits or earn income for 

providing such benefits under the laws of Malaysia and regulated with respect to

contributions, distributions, reporting, sponsorship, and taxation. 

4. Identification and Treatment of Other Deemed‐Compliant FFIs and Exempt

Beneficial Owners. The United States shall treat each Non-Reporting Malaysian 

Financial Institution as a deemed-compliant FFI or as an exempt beneficial owner, as

appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code. 

5. Special Rules Regarding Related Entities and Branches That Are Non‐

Participating Financial Institutions. If a Malaysian Financial Institution, that otherwise 

meets the requirements described in paragraph 1 of this Article or is described in 

paragraph 3 or 4 of this Article, has a Related Entity or branch that operates in a 

jurisdiction that prevents such Related Entity or branch from fulfilling the requirements 

of a participating FFI or deemed-compliant FFI for purposes of section 1471 of the U.S. 

Internal Revenue Code or has a Related Entity or branch that is treated as a NonParticipating Financial Institution solely due to the expiration of the transitional rule for 

limited FFIs and limited branches under relevant U.S. Treasury Regulations, such 

Malaysian Financial Institution shall continue to be in compliance with the terms of this 

Agreement and shall continue to be treated as a deemed-compliant FFI or exempt

beneficial owner, as appropriate, for purposes of section 1471 of the U.S. Internal Revenue 

Code, provided that: 

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a) the Malaysian Financial Institution treats each such Related Entity or branch

as a separate Non-Participating Financial Institution for purposes of all the

reporting and withholding requirements of this Agreement and each such

Related Entity or branch identifies itself to withholding agents as a NonParticipating Financial Institution; 

b) each such Related Entity or branch identifies its U.S. accounts and reports the 

information with respect to those accounts as required under section 1471 of

the U.S. Internal Revenue Code to the extent permitted under the relevant laws 

pertaining to the Related Entity or branch; and 

c) such Related Entity or branch does not specifically solicit U.S. accounts held by 

persons that are not resident in the jurisdiction where such Related Entity or 

branch is located or accounts held by Non-Participating Financial Institutions 

that are not established in the jurisdiction where such Related Entity or branch 

is located, and such Related Entity or branch is not used by the Malaysian 

Financial Institution or any other Related Entity to circumvent the obligations 

under this Agreement or under section 1471 of the U.S. Internal Revenue Code, 

as appropriate. 

6. Coordination of Timing. Notwithstanding paragraphs 3 and 5 of Article 3 of this 

Agreement: 

a) Malaysia shall not be obligated to obtain and exchange information with 

respect to a calendar year that is prior to the calendar year with respect to 

which similar information is required to be reported to the IRS by participating 

FFIs pursuant to relevant U.S. Treasury Regulations; and 

b) Malaysia shall not be obligated to begin exchanging information prior to the 

date by which participating FFIs are required to report similar information to 

the IRS under relevant U.S. Treasury Regulations. 

7. Coordination of Definitions with U.S. Treasury Regulations. Notwithstanding 

Article 1 of this Agreement and the definitions provided in the Annexes to this Agreement, 

in implementing this Agreement, Malaysia may use, and may permit Malaysian Financial 

Institutions to use, a definition in relevant U.S. Treasury Regulations in lieu of a

corresponding definition in this Agreement, provided that such application would not

frustrate the purposes of this Agreement. 

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Article 5

Collaboration on Compliance and Enforcement

1. General Inquiries. Subject to any further terms set forth in a competent authority 

agreement concluded pursuant to paragraph 6 of Article 3 of this Agreement, the U.S. 

Competent Authority may make follow-up requests to the Malaysian Competent 

Authority, pursuant to which the Malaysian Competent Authority shall obtain and provide 

additional information with respect to a U.S. Reportable Account, including the account

statements prepared in the ordinary course of a Reporting Malaysian Financial

Institution’s business that summarize the activity (including withdrawals, transfers, and

closures) of the U.S. Reportable Account. 

2. Minor and Administrative Errors. The U.S. Competent Authority shall notify the 

Malaysian Competent Authority when the U.S. Competent Authority has reason to believe 

that administrative errors or other minor errors may have led to incorrect or incomplete 

information reporting or resulted in other infringements of this Agreement. The 

Malaysian Competent Authority shall apply its domestic law (including applicable 

penalties) to obtain corrected and/or complete information or to resolve other 

infringements of this Agreement. 

3. Significant Non‐Compliance.

a) The U.S. Competent Authority shall notify the Malaysian Competent Authority

when the U.S. Competent Authority has determined that there is significant 

non-compliance with the obligations under this Agreement with respect to a 

Reporting Malaysian Financial Institution. The Malaysian Competent 

Authority shall apply its domestic law (including applicable penalties) to

address the significant non-compliance described in the notice. 

b) If such enforcement actions do not resolve the non-compliance within a period

of 18 months after notification of significant non-compliance is first provided 

by the U.S. Competent Authority, the United States shall treat the Reporting

Malaysian Financial Institution as a Non-Participating Financial Institution 

pursuant to this subparagraph 3(b). 

4. Reliance on Third Party Service Providers. Malaysia may allow Reporting 

Malaysian Financial Institutions to use third party service providers to fulfill the 

obligations imposed on such Reporting Malaysian Financial Institutions by Malaysia, as 

contemplated in this Agreement, but these obligations shall remain the responsibility of

the Reporting Malaysian Financial Institutions. 

15 
	 	

	 	

	 	 	 	 	 	 	 	

	 	

	 	 	 	 	 	

	 	 	 	 	 	 	 	

 

	 	

	 	 	 	 	 	 	 	 		

 

 

 

5. Prevention of Avoidance. Malaysia shall implement as necessary requirements 

to prevent Financial Institutions from adopting practices intended to circumvent the 

reporting required under this Agreement. 

Article 6

Mutual Commitment to Continue to Enhance the Effectiveness of Information

Exchange and Transparency

1. Treatment of Passthru Payments and Gross Proceeds. The Parties are 

committed to work together, along with Partner Jurisdictions, to develop a practical and

effective alternative approach to achieve the policy objectives of foreign passthru 

payment and gross proceeds withholding that minimizes burden. 

2. Documentation of Accounts Maintained as of June 30, 2014. With respect to 

U.S. Reportable Accounts maintained by a Reporting Malaysian Financial Institution as of

June 30, 2014, Malaysia commits to establish, by January 1, 2017, for reporting with

respect to 2017 and subsequent years, rules requiring Reporting Malaysian Financial 

Institutions to obtain the U.S. TIN of each Specified U.S. Person as required pursuant to 

subparagraph 2(a) of Article 2 of this Agreement. 

Article 7

Consistency in the Application of FATCA to Partner Jurisdictions

1. Malaysia shall be granted the benefit of any more favorable terms under Article 4

or Annex I of this Agreement relating to the application of FATCA to Malaysian Financial 

Institutions afforded to another Partner Jurisdiction under a signed bilateral agreement

pursuant to which the other Partner Jurisdiction commits to undertake the same

obligations as Malaysia described in Articles 2 and 3 of this Agreement, and subject to the 

same terms and conditions as described therein and in Articles 5, 6, 7, 10 and 11 of this

Agreement. 

2. The United States shall notify Malaysia of any such more favorable terms, and such

more favorable terms shall apply automatically under this Agreement as if such terms 

were specified in this Agreement and effective as of the date of signing of the agreement 

incorporating the more favorable terms, unless Malaysia declines in writing the

application thereof. 

16 
	 	

	 	

	 	

 

 

 

	 	

Article 8

Mutual Agreement Procedure

1. Where difficulties or doubts arise between the Parties regarding the 

implementation, application, or interpretation of this Agreement, the Competent 

Authorities shall endeavor to resolve the matter by mutual agreement. 

2. The Competent Authorities may adopt and implement procedures to facilitate the 

implementation of this Agreement. 

3. The Competent Authorities may communicate with each other directly for 

purposes of reaching a mutual agreement under this Article. 

Article 9

Confidentiality

1. The Malaysian Competent Authority shall treat any information received from the 

United States pursuant to Article 5 of this Agreement as confidential and shall only

disclose such information as may be necessary to carry out its obligations under this 

Agreement. Such information may be disclosed in connection with court proceedings 

related to the performance of the obligations of Malaysia under this Agreement 

2. Information provided to the U.S. Competent Authority pursuant Articles 2 and 5 of

this Agreement shall be treated as confidential and may be disclosed only to persons or

authorities (including courts and administrative bodies) of the Government of the United 

States concerned with the assessment, collection, or administration of, the enforcement 

or prosecution in respect of, or the determination of appeals in relation to, U.S. federal 

taxes, or the oversight of such functions. Such persons or authorities shall use such

information only for such purposes. Such persons may disclose the information in public

court proceedings or in judicial decisions. The information may not be disclosed to any 

other person, entity, authority, or jurisdiction. Notwithstanding the foregoing, where 

Malaysia provides prior, written consent, the information may be used for purposes 

permitted under the provisions of a mutual legal assistance treaty in force between the 

Parties that allows for the exchange of tax information. 

Article 10

17 
	 	

	 	

	 	

	 	

 

Consultations and Amendments

1. In case any difficulties in the implementation of this Agreement arise, either Party 

may, independently of the mutual agreement procedure described in paragraph 1 of

Article 8 of this Agreement, request consultations to develop appropriate measures to

ensure the fulfillment of this Agreement. 

2. This Agreement may be amended by written mutual agreement of the Parties.

Unless otherwise agreed upon, such an amendment shall enter into force through the same 

procedures as set forth in paragraph 1 of Article 12 of this Agreement. 

Article 11

Annexes

The Annexes form an integral part of this Agreement. 

Article 12

Term of Agreement

1. This Agreement shall enter into force on the date of Malaysia’s written notification

to the United States that Malaysia has completed its necessary internal procedures

for entry into force of this Agreement. 

2. Either Party may terminate this Agreement by giving notice of termination in

writing to the other Party. Such termination shall become effective on the first day 

of the month following the expiration of a period of 12 months after the date of the 

notice of termination. 

3. The Parties shall, consult in good faith to amend this Agreement as necessary to 

reflect progress on the commitments set forth in Article 6 of this Agreement. 

4. If this Agreement is terminated, both Parties shall remain bound by the provisions of

Article 9 of this Agreement with respect to any information obtained under this

Agreement. 

18 
In witness whereof, the undersigned, being duly authorized thereto by their respective 

Governments, have signed this Agreement. 

Done at __________, in duplicate in the English language, this _____ day of ________, 20_____. 

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF 

THE UNITED STATES OF AMERICA: MALAYSIA 

19 
	 	

	 	 	 	 	 	 	

	 	 	 	 	 	

 

 

 

 

 

 

ANNEX I

DUE DILIGENCE OBLIGATIONS FOR IDENTIFYING AND REPORTING ON U.S.

REPORTABLE ACCOUNTS AND ON PAYMENTS TO CERTAIN NON‐PARTICIPATING

FINANCIAL INSTITUTIONS

I. General.

A. Malaysia shall require that Reporting Malaysian Financial Institutions apply

the due diligence procedures contained in this Annex I to identify U.S. Reportable 

Accounts and accounts held by Non-Participating Financial Institutions. 

B. For purposes of the Agreement, 

1. All dollar amounts are in U.S. dollars and shall be read to include the 

equivalent in other currencies. 

2. Except as otherwise provided herein, the balance or value of an

account shall be determined as of the last day of the calendar year or 

other appropriate reporting period. 

3. Where a balance or value threshold is to be determined as of June 30, 

2014 under this Annex I, the relevant balance or value shall be 

determined as of that day or the last day of the reporting period ending 

immediately before June 30, 2014, and where a balance or value 

threshold is to be determined as of the last day of a calendar year 

under this Annex I, the relevant balance or value shall be determined

as of the last day of the calendar year or other appropriate reporting 

period. 

4. Subject to subparagraph E(1) of section II of this Annex I, an account 

shall be treated as a U.S. Reportable Account beginning as of the date it 

is identified as such pursuant to the due diligence procedures in this 

Annex I. 

5. Unless otherwise provided, information with respect to a U.S. 

Reportable Account shall be reported annually in the calendar year

following the year to which the information relates. 

C. As an alternative to the procedures described in each section of this Annex I,

Malaysia may permit Reporting Malaysian Financial Institutions to rely on the 

procedures described in relevant U.S. Treasury Regulations to establish whether 

an account is a U.S. Reportable Account or an account held by a Non-Participating 

Financial Institution. Malaysia may permit Reporting Malaysian Financial 

Institutions to make such election separately for each section of this Annex I

either with respect to all relevant Financial Accounts or, separately, with respect 

to any clearly identified group of such accounts (such as by line of business or the 

location of where the account is maintained). 
	 	

	 	 	 	 	 	 	 	 		

 

 

 

	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	

	 	 	

	 	

 

II. Preexisting Individual Accounts The following rules and procedures apply for 

purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by 

individuals (“Preexisting Individual Accounts”). 

A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless

the Reporting Malaysian Financial Institution elects otherwise, either with respect 

to all Preexisting Individual Accounts or, separately, with respect to any clearly

identified group of such accounts, where the implementing rules in Malaysia 

provide for such an election, the following Preexisting Individual Accounts are not

required to be reviewed, identified, or reported as U.S. Reportable Accounts: 

1. Subject to subparagraph E(2) of this section, a Preexisting Individual

Account with a balance or value that does not exceed $50,000 as of

June 30, 2014. 

2. Subject to subparagraph E(2) of this section, a Preexisting Individual

Account that is a Cash Value Insurance Contract or an Annuity Contract 

with a balance or value of $250,000 or less as of June 30, 2014. 

3. A Preexisting Individual Account that is a Cash Value Insurance 

Contract or an Annuity Contract, provided the law or regulations of

Malaysia or the United States effectively prevent the sale of such a Cash 

Value Insurance Contract or an Annuity Contract to U.S. residents (e.g.,

if the relevant Financial Institution does not have the required 

registration under U.S. law, and the law of Malaysia requires reporting 

or withholding with respect to insurance products held by residents of

Malaysia. 

4. A Depository Account with a balance of $50,000 or less. 

B. Review Procedures for Preexisting Individual Accounts With a Balance

or Value as of June 30, 2014, that Exceeds $50,000 ($250,000 for a Cash

Value Insurance Contract or Annuity Contract), But Does Not Exceed

$1,000,000 (“Lower Value Accounts”).

1. Electronic Record Search. The Reporting Malaysian Financial Institution 

must review electronically searchable data maintained by the Reporting

Malaysian Financial Institution for any of the following U.S. indicia: 

a) Identification of the Account Holder as a U.S. citizen or resident; 

b) Unambiguous indication of a U.S. place of birth; 

c) Current U.S. mailing or residence address (including a U.S. post office

box); 
	 	

 

d) Current U.S. telephone number; 

e) Standing instructions to transfer funds to an account maintained in the 

United States; 

f) Currently effective power of attorney or signatory authority granted to 

a person with a U.S. address; or 

g) An “in-care-of” or “hold mail” address that is the sole address the

Reporting Malaysian Financial Institution has on file for the Account

Holder. In the case of a Preexisting Individual Account that is a Lower 

Value Account, an “in-care-of” address outside the United States or 

“hold mail” address shall not be treated as U.S. indicia. 

2. If none of the U.S. indicia listed in subparagraph B(1) of this section are

discovered in the electronic search, then no further action is required until there

is a change in circumstances that results in one or more U.S. indicia being

associated with the account, or the account becomes a High Value Account 

described in paragraph D of this section. 

3. If any of the U.S. indicia listed in subparagraph B(1) of this section are 

discovered in the electronic search, or if there is a change in circumstances that 

results in one or more U.S. indicia being associated with the account, then the

Reporting Malaysian Financial Institution must treat the account as a U.S. 

Reportable Account unless it elects to apply subparagraph B(4) of this section and

one of the exceptions in such subparagraph applies with respect to that account. 

4. Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this 

section, a Reporting Malaysian Financial Institution is not required to treat an 

account as a U.S. Reportable Account if: 

a) Where the Account Holder information unambiguously indicates a U.S.

place of birth, the Reporting Malaysian Financial Institution obtains, 

or has previously reviewed and maintains a record of: 

(1) A self-certification that the Account Holder is neither a U.S. 

citizen nor a U.S. resident for tax purposes (which may be on an

IRS Form W-8 or other similar agreed form); 

(2) A non-U.S. passport or other government-issued identification 

evidencing the Account Holder’s citizenship or nationality in a 

country other than the United States; and

(3) A copy of the Account Holder’s Certificate of Loss of Nationality

of the United States or a reasonable explanation of: 
 

	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	

 

 

	 	 	 	 	 	 	 	 	 	

	 	 	

	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	

	 	 	 	

(a) The reason the Account Holder does not have such a 

certificate despite relinquishing U.S. citizenship; or

(b) The reason the Account Holder did not obtain U.S. 

citizenship at birth. 

b) Where the Account Holder information contains a current U.S.

mailing or residence address, or one or more U.S. telephone

numbers that are the only telephone numbers associated with the

account, the Reporting Malaysian Financial Institution obtains, or has 

previously reviewed and maintains a record of: 

(1) A self-certification that the Account Holder is neither a U.S. citizen 

nor a U.S. resident for tax purposes (which may be on an IRS Form 

W-8 or other similar agreed form); and

(2) Documentary evidence, as defined in paragraph D of section VI of

this Annex I, establishing the Account Holder’s non-U.S. status. 

c) Where the Account Holder information contains standing

instructions to transfer funds to an account maintained in the

United States, the Reporting Malaysian Financial Institution obtains, 

or has previously reviewed and maintains a record of: 

(1) A self-certification that the Account Holder is neither a U.S. 

citizen nor a U.S. resident for tax purposes (which may be on an

IRS Form W-8 or other similar agreed form); and

(2) Documentary evidence, as defined in paragraph D of section VI of

this Annex I, establishing the Account Holder’s non-U.S. status. 

d) Where the Account Holder information contains a currently effective

power of attorney or signatory authority granted to a person with

a U.S. address, has an “in‐care‐of” address or “hold mail” address

that is the sole address identified for the Account Holder, or has one

or more U.S. telephone numbers (if a non‐U.S. telephone number is

also associated with the account), the Reporting Malaysian Financial

Institution obtains, or has previously reviewed and maintains a record 

of: 

(1) A self-certification that the Account Holder is neither a U.S. 

citizen nor a U.S. resident for tax purposes (which may be on an

IRS Form W-8 or other similar agreed form); or

(2) Documentary evidence, as defined in paragraph D of section VI of

this Annex I, establishing the Account Holder’s non-U.S. status. 
	 	 	 	 	 	

	 	 	

 

 

 

 

	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 

	 	

	 	 

 

C. Additional Procedures Applicable to Preexisting Individual Accounts That

Are Lower Value Accounts.

1. Review of Preexisting Individual Accounts that are Lower Value Accounts 

for U.S. indicia must be completed by June 30, 2016. 

2. If there is a change of circumstances with respect to a Preexisting Individual

Account that is a Lower Value Account that results in one or more U.S. indicia

described in subparagraph B(1) of this section being associated with the account, 

then the Reporting Malaysian Financial Institution must treat the account as a U.S. 

Reportable Account unless subparagraph B(4) of this section applies. 

3. Except for Depository Accounts described in subparagraph A(4) of this

section, any Preexisting Individual Account that has been identified as a U.S. 

Reportable Account under this section shall be treated as a U.S. Reportable

Account in all subsequent years, unless the Account Holder ceases to be a

Specified U.S. Person. 

D. Enhanced Review Procedures for Preexisting Individual Accounts With a

Balance or Value That Exceeds $1,000,000 as of June 30, 2014, or December 31 of

2015 or Any Subsequent Year (“High Value Accounts”).

1. Electronic Record Search. The Reporting Malaysian Financial 

Institution must review electronically searchable data maintained by the 

Reporting Malaysian Financial Institution for any of the U.S. indicia described in 

subparagraph B(1) of this section. 

2. Paper Record Search. If the Reporting Malaysian Financial Institution’s 

electronically searchable databases include fields for, and capture all of the 

information described in, subparagraph D(3) of this section, then no further paper 

record search is required. If the electronic databases do not capture all of this 

information, then with respect to a High Value Account, the Reporting Malaysian 

Financial Institution must also review the current customer master file and, to the 

extent not contained in the current customer master file, the following documents 

associated with the account and obtained by the Reporting Malaysian Financial 

Institution within the last five years for any of the U.S. indicia described in

subparagraph B(1) of this section: 

a) The most recent documentary evidence collected with respect to the

account; 

b) The most recent account opening contract or documentation; 

c) The most recent documentation obtained by the Reporting Malaysian 

Financial Institution pursuant to AML/KYC Procedures or for other 

regulatory purposes; 
 

	 	 	 	 	

 

 

 

	 	 	 	 	

 

	 	 	 	 

 

d) Any power of attorney or signature authority forms currently in effect;

and 

e) Any standing instructions to transfer funds currently in effect. 

3. Exception Where Databases Contain Sufficient Information. A Reporting 

Malaysian Financial Institution is not required to perform the paper record search 

described in subparagraph D(2) of this section if the Reporting Malaysian 

Financial Institution’s electronically searchable information includes the

following: 

a) The Account Holder’s nationality or residence status; 

b) The Account Holder’s residence address and mailing address currently

on file with the Reporting Malaysian Financial Institution; 

c) The Account Holder’s telephone number(s) currently on file, if any, with

the Reporting Malaysian Financial Institution; 

d) Whether there are standing instructions to transfer funds in the

account to another account (including an account at another branch of

the Reporting Malaysian Financial Institution or another Financial 

Institution); 

e) Whether there is a current “in-care-of” address or “hold mail” address 

for the Account Holder; and

f) Whether there is any power of attorney or signatory authority for the 

account. 

4. Relationship Manager Inquiry for Actual Knowledge. In addition to the 

electronic and paper record searches described above, the Reporting Malaysian 

Financial Institution must treat as a U.S. Reportable Account any High Value 

Account assigned to a relationship manager (including any Financial Accounts 

aggregated with such High Value Account) if the relationship manager has actual 

knowledge that the Account Holder is a Specified U.S. Person. 

5. Effect of Finding U.S. Indicia.

a) If none of the U.S. indicia listed in subparagraph B(1) of this section are 

discovered in the enhanced review of High Value Accounts described

above, and the account is not identified as held by a Specified U.S. 

Person in subparagraph D(4) of this section, then no further action is

required until there is a change in circumstances that results in one or 

more U.S. indicia being associated with the account. 

b) If any of the U.S. indicia listed in subparagraph B(1) of this section are 
 

	 	 	 	 	

 

discovered in the enhanced review of High Value Accounts described

above, or if there is a subsequent change in circumstances that results 

in one or more U.S. indicia being associated with the account, then the

Reporting Malaysian Financial Institution must treat the account as a

U.S. Reportable Account unless it elects to apply subparagraph B(4) of

this section and one of the exceptions in such subparagraph applies 

with respect to that account. 

c) Except for Depository Accounts described in subparagraph A(4) of this

section, any Preexisting Individual Account that has been identified as 

a U.S. Reportable Account under this section shall be treated as a U.S.

Reportable Account in all subsequent years, unless the Account Holder 

ceases to be a Specified U.S. Person. 

E. Additional Procedures Applicable to High Value Accounts.

1. If a Preexisting Individual Account is a High Value Account as of June 

30, 2014, the Reporting Malaysian Financial Institution must complete 

the enhanced review procedures described in paragraph D of this

section with respect to such account by June 30, 2015. If based on this 

review such account is identified as a U.S. Reportable Account on or 

before December 31, 2014, the Reporting Malaysian Financial

Institution must report the required information about such account 

with respect to 2014 in the first report on the account and on an 

annual basis thereafter. In the case of an account identified as a U.S. 

Reportable Account after December 31, 2014 and on or before June 30, 

2015, the Reporting Malaysian Financial Institution is not required to 

report information about such account with respect to 2014, but must 

report information about the account on an annual basis thereafter. 

2. If a Preexisting Individual Account is not a High Value Account as of

June 30, 2014, but becomes a High Value Account as of the last day of

2015 or any subsequent calendar year, the Reporting Malaysian 

Financial Institution must complete the enhanced review procedures

described in paragraph D of this section with respect to such account 

within six months after the last day of the calendar year in which the 

account becomes a High Value Account. If based on this review such 

account is identified as a U.S. Reportable Account, the Reporting

Malaysian Financial Institution must report the required information 

about such account with respect to the year in which it is identified as

a U.S. Reportable Account and subsequent years on an annual basis,

unless the Account Holder ceases to be a Specified U.S. Person. 

3. Once a Reporting Malaysian Financial Institution applies the enhanced

review procedures described in paragraph D of this section to a High

Value Account, the Reporting Malaysian Financial Institution is not 

required to re-apply such procedures, other than the relationship 
 

 

	 	 	 	 	 	 	

	 	

 

	 	 

	 	 	 	 	 	 	 	 	

 

 

 

manager inquiry described in subparagraph D(4) of this section, to the 

same High Value Account in any subsequent year. 

4. If there is a change of circumstances with respect to a High Value 

Account that results in one or more U.S. indicia described in 

subparagraph B(1) of this section being associated with the account, 

then the Reporting Malaysian Financial Institution must treat the 

account as a U.S. Reportable Account unless it elects to apply

subparagraph B(4) of this section and one of the exceptions in such

subparagraph applies with respect to that account. 

5. A Reporting Malaysian Financial Institution must implement 

procedures to ensure that a relationship manager identifies any 

change in circumstances of an account. For example, if a relationship 

manager is notified that the Account Holder has a new mailing address

in the United States, the Reporting Malaysian Financial Institution is 

required to treat the new address as a change in circumstances and, if 

it elects to apply subparagraph B(4) of this section, is required to 

obtain the appropriate documentation from the Account Holder. 

F. Preexisting Individual Accounts That Have Been Documented for

Certain Other Purposes. A Reporting Malaysian Financial Institution that has

previously obtained documentation from an Account Holder to establish the 

Account Holder’s status as neither a U.S. citizen nor a U.S. resident in order to 

meet its obligations under a qualified intermediary, withholding foreign 

partnership, or withholding foreign trust agreement with the IRS, or to fulfill its 

obligations under chapter 61 of Title 26 of the United States Code, is not required 

to perform the procedures described in subparagraph B(1) of this section with

respect to Lower Value Accounts or subparagraphs D(1) through D(3) of this

section with respect to High Value Accounts. 

III. New Individual Accounts. The following rules and procedures apply for

purposes of identifying U.S. Reportable Accounts among Financial Accounts held by

individuals and opened on or after July 1, 2014 (“New Individual Accounts”). 

A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless

the Reporting Malaysian Financial Institution elects otherwise, either with respect 

to all New Individual Accounts or, separately, with respect to any clearly

identified group of such accounts, where the implementing rules in Malaysia 

provide for such an election, the following New Individual Accounts are not 

required to be reviewed, identified, or reported as U.S. Reportable Accounts: 

1. A Depository Account unless the account balance exceeds $50,000 at 

the end of any calendar year or other appropriate reporting period. 

2. A Cash Value Insurance Contract unless the Cash Value exceeds 

$50,000 at the end of any calendar year or other appropriate reporting 
 

 

	 	 	

 

 

 

 

 

	 	 	

	 	 	 	 	 	 	 	 	 		

 

	 	 	 	

period. 

B. Other New Individual Accounts. With respect to New Individual Accounts 

not described in paragraph A of this section, upon account opening (or within 90 

days after the end of the calendar year in which the account ceases to be

described in paragraph A of this section), the Reporting Malaysian Financial 

Institution must obtain a self-certification, which may be part of the account 

opening documentation, that allows the Reporting Malaysian Financial Institution 

to determine whether the Account Holder is resident in the United States for tax 

purposes (for this purpose, a U.S. citizen is considered to be resident in the United

States for tax purposes, even if the Account Holder is also a tax resident of another

jurisdiction) and confirm the reasonableness of such self-certification based on

the information obtained by the Reporting Malaysian Financial Institution in

connection with the opening of the account, including any documentation 

collected pursuant to AML/KYC Procedures. 

1. If the self-certification establishes that the Account Holder is resident 

in the United States for tax purposes, the Reporting Malaysian Financial 

Institution must treat the account as a U.S. Reportable Account and obtain a 

self-certification that includes the Account Holder’s U.S. TIN (which may be 

an IRS Form W-9 or other similar agreed form). 

2. If there is a change of circumstances with respect to a New Individual

Account that causes the Reporting Malaysian Financial Institution to know, 

or have reason to know, that the original self-certification is incorrect or 

unreliable, the Reporting Malaysian Financial Institution cannot rely on the 

original self-certification and must obtain a valid self-certification that

establishes whether the Account Holder is a U.S. citizen or resident for U.S. 

tax purposes. If the Reporting Malaysian Financial Institution is unable to 

obtain a valid self-certification, the Reporting Malaysian Financial 

Institution must treat the account as a U.S. Reportable Account. 

IV. Preexisting Entity Accounts. The following rules and procedures apply for

purposes of identifying U.S. Reportable Accounts and accounts held by Non-Participating 

Financial Institutions among Preexisting Accounts held by Entities (“Preexisting Entity 

Accounts”). 

A. Entity Accounts Not Required to Be Reviewed, Identified or Reported.

Unless the Reporting Malaysian Financial Institution elects otherwise, either with

respect to all Preexisting Entity Accounts or, separately, with respect to any 

clearly identified group of such accounts, where the implementing rules in 

Malaysia provide for such an election, a Preexisting Entity Account with an 

account balance or value that does not exceed $250,000 as of June 30, 2014, is not 

required to be reviewed, identified, or reported as a U.S. Reportable Account until 

the account balance or value exceeds $1,000,000. 

B. Entity Accounts Subject to Review. A Preexisting Entity Account that has 
 

 

	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	

	 	 	 

	 	 	 	 	 	 	 	

 

	 	 	 	 	 	 	 	

an account balance or value that exceeds $250,000 as of June 30, 2014, and a

Preexisting Entity Account that does not exceed $250,000 as of June 30, 2014 but 

the account balance or value of which exceeds $1,000,000 as of the last day of

2015 or any subsequent calendar year, must be reviewed in accordance with the 

procedures set forth in paragraph D of this section. 

C. Entity Accounts With Respect to Which Reporting Is Required. With

respect to Preexisting Entity Accounts described in paragraph B of this section,

only accounts that are held by one or more Entities that are Specified U.S. Persons, 

or by Passive NFFEs with one or more Controlling Persons who are U.S. citizens or

residents, shall be treated as U.S. Reportable Accounts. In addition, accounts held

by Non-Participating Financial Institutions shall be treated as accounts for which 

aggregate payments as described in subparagraph 1(b) of Article 4 of the 

Agreement are reported to the Malaysian Competent Authority. 

D. Review Procedures for Identifying Entity Accounts With Respect to

Which Reporting Is Required. For Preexisting Entity Accounts described in 

paragraph B of this section, the Reporting Malaysian Financial Institution must 

apply the following review procedures to determine whether the account is held

by one or more Specified U.S. Persons, by Passive NFFEs with one or more 

Controlling Persons who are U.S. citizens or residents, or by Non-Participating 

Financial Institutions: 

1. Determine Whether the Entity Is a Specified U.S. Person.

a) Review information maintained for regulatory or customer

relationship purposes (including information collected pursuant

to AML/KYC Procedures) to determine whether the information 

indicates that the Account Holder is a U.S. Person. For this

purpose, information indicating that the Account Holder is a U.S. 

Person includes a U.S. place of incorporation or organization, or a 

U.S. address. 

b) If the information indicates that the Account Holder is a U.S.

Person, the Reporting Malaysian Financial Institution must treat 

the account as a U.S. Reportable Account unless it obtains a selfcertification from the Account Holder (which may be on an IRS 

Form W-8 or W-9, or a similar agreed form), or reasonably 

determines based on information in its possession or that is 

publicly available, that the Account Holder is not a Specified U.S. 

Person. 

2. Determine Whether a Non‐U.S. Entity Is a Financial Institution.

a) Review information maintained for regulatory or customer

relationship purposes (including information collected pursuant

to AML/KYC Procedures) to determine whether the information 
 

	 	 	 	 	 	 	

	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 

 

 

indicates that the Account Holder is a Financial Institution. 

b) If the information indicates that the Account Holder is a Financial

Institution, or the Reporting Malaysian Financial Institution

verifies the Account Holder’s Global Intermediary Identification

Number on the published IRS FFI list, then the account is not a 

U.S. Reportable Account. 

3. Determine Whether a Financial Institution Is a Non‐Participating

Financial Institution Payments to Which Are Subject to Aggregate

Reporting Under Subparagraph 1(b) of Article 4 of the Agreement.

a) Subject to subparagraph D(3)(b) of this section, a Reporting 

Malaysian Financial Institution may determine that the Account 

Holder is a Malaysian Financial Institution or other Partner 

Jurisdiction Financial Institution if the Reporting Malaysian

Financial Institution reasonably determines that the Account 

Holder has such status on the basis of the Account Holder’s 

Global Intermediary Identification Number on the published IRS 

FFI list or other information that is publicly available or in the 

possession of the Reporting Malaysian Financial Institution, as 

applicable. In such case, no further review, identification, or

reporting is required with respect to the account. 

b) If the Account Holder is a Malaysian Financial Institution or other 

Partner Jurisdiction Financial Institution treated by the IRS as a 

Non-Participating Financial Institution, then the account is not a 

U.S. Reportable Account, but payments to the Account Holder 

must be reported as contemplated in subparagraph 1(b) of

Article 4 of the Agreement. 

c) If the Account Holder is not a Malaysian Financial Institution or 

other Partner Jurisdiction Financial Institution, then the

Reporting Malaysian Financial Institution must treat the Account 

Holder as a Non-Participating Financial Institution payments to

which are reportable under subparagraph 1(b) of Article 4 of the 

Agreement, unless the Reporting Malaysian Financial Institution: 

(1) Obtains a self-certification (which may be on an IRS Form

W-8 or similar agreed form) from the Account Holder that it

is a certified deemed-compliant FFI, or an exempt beneficial

owner, as those terms are defined in relevant U.S. Treasury 

Regulations; or

(2) In the case of a participating FFI or registered deemedcompliant FFI, verifies the Account Holder’s Global 

Intermediary Identification Number on the published IRS 
	 	 	 	 	 	 	 	 	 	 	

 

 

 

 

 

	 	 	 	 	 	 	 	

FFI list. 

4. Determine Whether an Account Held by an NFFE Is a U.S.

Reportable Account. With respect to an Account Holder of a Preexisting 

Entity Account that is not identified as either a U.S. Person or a Financial 

Institution, the Reporting Malaysian Financial Institution must identify (i)

whether the Account Holder has Controlling Persons, (ii) whether the 

Account Holder is a Passive NFFE, and (iii) whether any of the Controlling 

Persons of the Account Holder is a U.S. citizen or resident. In making these 

determinations the Reporting Malaysian Financial Institution must follow

the guidance in subparagraphs D(4)(a) through D(4)(d) of this section in the 

order most appropriate under the circumstances. 

a) For purposes of determining the Controlling Persons of an Account 

Holder, a Reporting Malaysian Financial Institution may rely on 

information collected and maintained pursuant to AML/KYC 

Procedures. 

b) For purposes of determining whether the Account Holder is a Passive

NFFE, the Reporting Malaysian Financial Institution must obtain a selfcertification (which may be on an IRS Form W-8 or W-9, or on a similar 

agreed form) from the Account Holder to establish its status, unless it 

has information in its possession or that is publicly available, based on

which it can reasonably determine that the Account Holder is an Active

NFFE. 

c) For purposes of determining whether a Controlling Person of a Passive 

NFFE is a U.S. citizen or resident for tax purposes, a Reporting 

Malaysian Financial Institution may rely on: 

(1) Information collected and maintained pursuant to AML/KYC 

Procedures in the case of a Preexisting Entity Account held by

one or more NFFEs with an account balance or value that does 

not exceed $1,000,000; or

(2) A self-certification (which may be on an IRS Form W-8 or W-9, or 

on a similar agreed form) from the Account Holder or such

Controlling Person in the case of a Preexisting Entity Account

held by one or more NFFEs with an account balance or value that 

exceeds $1,000,000. 

d) If any Controlling Person of a Passive NFFE is a U.S. citizen or resident,

the account shall be treated as a U.S. Reportable Account. 

E. Timing of Review and Additional Procedures Applicable to Preexisting

Entity Accounts.
 

	 	 	 	

	 	 	 	 	 	 	 	 	 

	 	 	 

 

 

1. Review of Preexisting Entity Accounts with an account balance or 

value that exceeds $250,000 as of June 30, 2014 must be completed by June

30, 2016. 

2. Review of Preexisting Entity Accounts with an account balance or 

value that does not exceed $250,000 as of June 30, 2014, but exceeds 

$1,000,000 as of December 31 of 2015 or any subsequent year, must be

completed within six months after the last day of the calendar year in which 

the account balance or value exceeds $1,000,000. 

3. If there is a change of circumstances with respect to a Preexisting 

Entity Account that causes the Reporting Malaysian Financial Institution to 

know, or have reason to know, that the self-certification or other

documentation associated with an account is incorrect or unreliable, the 

Reporting Malaysian Financial Institution must redetermine the status of the

account in accordance with the procedures set forth in paragraph D of this

section. 

V. New Entity Accounts. The following rules and procedures apply for purposes of

identifying U.S. Reportable Accounts and accounts held by Non-Participating 

Financial Institutions among Financial Accounts held by Entities and opened on or 

after July 1, 2014 (“New Entity Accounts”). 

A. Entity Accounts Not Required to Be Reviewed, Identified or Reported.

Unless the Reporting Malaysian Financial Institution elects otherwise, either with

respect to all New Entity Accounts or, separately, with respect to any clearly 

identified group of such accounts, where the implementing rules in Malaysia 

provide for such election, a credit card account or a revolving credit facility

treated as a New Entity Account is not required to be reviewed, identified, or 

reported, provided that the Reporting Malaysian Financial Institution maintaining 

such account implements policies and procedures to prevent an account balance

owed to the Account Holder that exceeds $50,000. 

B. Other New Entity Accounts. With respect to New Entity Accounts not 

described in paragraph A of this section, the Reporting Malaysian Financial 

Institution must determine whether the Account Holder is: (i) a Specified U.S. 

Person; (ii) a Malaysian Financial Institution or other Partner Jurisdiction 

Financial Institution; (iii) a participating FFI, a deemed-compliant FFI, or an 

exempt beneficial owner, as those terms are defined in relevant U.S. Treasury 

Regulations; or (iv) an Active NFFE or Passive NFFE. 

1. Subject to subparagraph B(2) of this section, a Reporting Malaysian 

Financial Institution may determine that the Account Holder is an Active 

NFFE, a Malaysian Financial Institution, or other Partner Jurisdiction 

Financial Institution if the Reporting Malaysian Financial Institution 

reasonably determines that the Account Holder has such status on the basis 

of the Account Holder’s Global Intermediary Identification Number or other 
 

 

	 	 	

	 	

 

 

	 	 	 	

information that is publicly available or in the possession of the Reporting

Malaysian Financial Institution, as applicable. 

2. If the Account Holder is a Malaysian Financial Institution or other

Partner Jurisdiction Financial Institution treated by the IRS as a NonParticipating Financial Institution, then the account is not a U.S. Reportable

Account, but payments to the Account Holder must be reported as 

contemplated in subparagraph 1(b) of Article 4 of the Agreement. 

3. In all other cases, a Reporting Malaysian Financial Institution must 

obtain a self-certification from the Account Holder to establish the Account

Holder’s status. Based on the self-certification, the following rules apply: 

a) If the Account Holder is a Specified U.S. Person, the Reporting 

Malaysian Financial Institution must treat the account as a U.S. 

Reportable Account. 

b) If the Account Holder is a Passive NFFE, the Reporting Malaysian 

Financial Institution must identify the Controlling Persons as

determined under AML/KYC Procedures, and must determine whether 

any such person is a U.S. citizen or resident on the basis of a selfcertification from the Account Holder or such person. If any such 

person is a U.S. citizen or resident, the Reporting Malaysian Financial 

Institution must treat the account as a U.S. Reportable Account. 

c) If the Account Holder is: (i) a U.S. Person that is not a Specified

U.S. Person; (ii) subject to subparagraph B(3)(d) of this section, a 

Malaysian Financial Institution or other Partner Jurisdiction Financial 

Institution; (iii) a participating FFI, a deemed-compliant FFI, or an 

exempt beneficial owner, as those terms are defined in relevant U.S. 

Treasury Regulations; (iv) an Active NFFE; or (v) a Passive NFFE none 

of the Controlling Persons of which is a U.S. citizen or resident, then 

the account is not a U.S. Reportable Account, and no reporting is

required with respect to the account. 

d) If the Account Holder is a Non-Participating Financial Institution 

(including a Malaysian Financial Institution or other Partner 

Jurisdiction Financial Institution treated by the IRS as a NonParticipating Financial Institution), then the account is not a U.S.

Reportable Account, but payments to the Account Holder must be

reported as contemplated in subparagraph 1(b) of Article 4 of the 

Agreement. 

VI. Special Rules and Definitions. The following additional rules and definitions 

apply in implementing the due diligence procedures described above: 
	 	 	 	

 

		

 

A. Reliance on Self‐Certifications and Documentary Evidence. A Reporting 

Malaysian Financial Institution may not rely on a self-certification or

documentary evidence if the Reporting Malaysian Financial Institution knows or

has reason to know that the self-certification or documentary evidence is

incorrect or unreliable. 

B. Definitions. The following definitions apply for purposes of this Annex I. 

1. AML/KYC Procedures. “AML/KYC Procedures” means the customer 

due diligence procedures of a Reporting Malaysian Financial Institution 

pursuant to the anti-money laundering or similar requirements of Malaysia

to which such Reporting Malaysian Financial Institution is subject. 

2. NFFE. An “NFFE” means any Non-U.S. Entity that is not an FFI as

defined in relevant U.S. Treasury Regulations or is an Entity described in 

subparagraph B(4)(j) of this section, and also includes any Non-U.S. Entity 

that is established in Malaysia or another Partner Jurisdiction and that is not 

a Financial Institution. 

3. Passive NFFE. A “Passive NFFE” means any NFFE that is not (i) an 

Active NFFE, or (ii) a withholding foreign partnership or withholding foreign 

trust pursuant to relevant U.S. Treasury Regulations. 

4. Active NFFE. An “Active NFFE” means any NFFE that meets any of the 

following criteria: 

a) Less than 50 percent of the NFFE’s gross income for the 

preceding calendar year or other appropriate reporting period is 

passive income and less than 50 percent of the assets held by the 

NFFE during the preceding calendar year or other appropriate 

reporting period are assets that produce or are held for the 

production of passive income; 

b) The stock of the NFFE is regularly traded on an established

securities market or the NFFE is a Related Entity of an Entity the 

stock of which is regularly traded on an established securities 

market; 

c) The NFFE is organized in a U.S. Territory and all of the owners of

the payee are bona fide residents of that U.S. Territory; 

d) The NFFE is a government (other than the U.S. government), a 

political subdivision of such government (which, for the

avoidance of doubt, includes a state, province, county, or

municipality), or a public body performing a function of such

government or a political subdivision thereof, a government of a 
 

 

 

e) 

f) 

g) 

h) 

i) 

j) 

U.S. Territory, an international organization, a non-U.S. central

bank of issue, or an Entity wholly owned by one or more of the 

foregoing; 

Substantially all of the activities of the NFFE consist of holding (in

whole or in part) the outstanding stock of, or providing financing 

and services to, one or more subsidiaries that engage in trades or 

businesses other than the business of a Financial Institution, 

except that an entity shall not qualify for NFFE status if the entity 

functions (or holds itself out) as an investment fund, such as a 

private equity fund, venture capital fund, leveraged buyout fund, 

or any investment vehicle whose purpose is to acquire or fund 

companies and then hold interests in those companies as capital 

assets for investment purposes; 

The NFFE is not yet operating a business and has no prior

operating history, but is investing capital into assets with the 

intent to operate a business other than that of a Financial 

Institution, provided that the NFFE shall not qualify for this 

exception after the date that is 24 months after the date of the 

initial organization of the NFFE; 

The NFFE was not a Financial Institution in the past five years, 

and is in the process of liquidating its assets or is reorganizing

with the intent to continue or recommence operations in a

business other than that of a Financial Institution; 

The NFFE primarily engages in financing and hedging 

transactions with, or for, Related Entities that are not Financial 

Institutions, and does not provide financing or hedging services 

to any Entity that is not a Related Entity, provided that the group 

of any such Related Entities is primarily engaged in a business 

other than that of a Financial Institution; 

The NFFE is an “excepted NFFE” as described in relevant U.S. 

Treasury Regulations; or

The NFFE meets all of the following requirements: 

i. It is established and operated in its jurisdiction of residence 

exclusively for religious, charitable, scientific, artistic, 

cultural, athletic, or educational purposes; or it is

established and operated in its jurisdiction of residence and 

it is a professional organization, business league, chamber 

of commerce, labor organization, agricultural or

horticultural organization, civic league or an organization

operated exclusively for the promotion of social welfare; 

ii. It is exempt from income tax in its jurisdiction of residence; 
 

 

 

 

 

	 	 	 	 	

	 	 	

 

 

	 	 	

iii. It has no shareholders or members who have a proprietary 

or beneficial interest in its income or assets; 

iv. The applicable laws of the NFFE’s jurisdiction of residence 

or the NFFE’s formation documents do not permit any 

income or assets of the NFFE to be distributed to, or applied 

for the benefit of, a private person or non-charitable Entity 

other than pursuant to the conduct of the NFFE’s charitable 

activities, or as payment of reasonable compensation for

services rendered, or as payment representing the fair

market value of property which the NFFE has purchased; 

and

v. The applicable laws of the NFFE’s jurisdiction of residence 

or the NFFE’s formation documents require that, upon the 

NFFE’s liquidation or dissolution, all of its assets be 

distributed to a governmental entity or other non-profit 

organization, or escheat to the government of the NFFE’s

jurisdiction of residence or any political subdivision 

thereof. 

5. Preexisting Account. A “Preexisting Account” means a Financial 

Account maintained by a Reporting Malaysian Financial Institution as of 

June 30, 2014. 

C. Account Balance Aggregation and Currency Translation Rules.

1. Aggregation of Individual Accounts. For purposes of determining 

the aggregate balance or value of Financial Accounts held by an individual, a 

Reporting Malaysian Financial Institution is required to aggregate all 

Financial Accounts maintained by the Reporting Malaysian Financial

Institution, or by a Related Entity, but only to the extent that the Reporting 

Malaysian Financial Institution’s computerized systems link the Financial

Accounts by reference to a data element such as client number or taxpayer

identification number, and allow account balances or values to be 

aggregated. Each holder of a jointly held Financial Account shall be

attributed the entire balance or value of the jointly held Financial Account

for purposes of applying the aggregation requirements described in this

paragraph 1. 

2. Aggregation of Entity Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an Entity, a

Reporting Malaysian Financial Institution is required to take into account all 

Financial Accounts that are maintained by the Reporting Malaysian 

Financial Institution, or by a Related Entity, but only to the extent that the 

Reporting Malaysian Financial Institution’s computerized systems link the 

Financial Accounts by reference to a data element such as client number or 
	 	 	 	 

 

 

 

 

taxpayer identification number, and allow account balances or values to be

aggregated. 

3. Special Aggregation Rule Applicable to Relationship Managers.

For purposes of determining the aggregate balance or value of Financial

Accounts held by a person to determine whether a Financial Account is a 

High Value Account, a Reporting Malaysian Financial Institution is also 

required, in the case of any Financial Accounts that a relationship manager 

knows, or has reason to know, are directly or indirectly owned, controlled, 

or established (other than in a fiduciary capacity) by the same person, to 

aggregate all such accounts. 

4. Currency Translation Rule. For purposes of determining the balance 

or value of Financial Accounts denominated in a currency other than the U.S. 

dollar, a Reporting Malaysian Financial Institution must convert the U.S. 

dollar threshold amounts described in this Annex I into such currency using

a published spot rate determined as of the last day of the calendar year

preceding the year in which the Reporting Malaysian Financial Institution is 

determining the balance or value. 

D. Documentary Evidence. For purposes of this Annex I, acceptable 

documentary evidence includes any of the following: 

1. A certificate of residence issued by an authorized government body 

(for example, a government or agency thereof, or a municipality) of the 

jurisdiction in which the payee claims to be a resident. 

2. With respect to an individual, any valid identification issued by an 

authorized government body (for example, a government or agency thereof, 

or a municipality), that includes the individual’s name and is typically used 

for identification purposes. 

3. With respect to an Entity, any official documentation issued by an 

authorized government body (for example, a government or agency thereof, 

or a municipality) that includes the name of the Entity and either the 

address of its principal office in the jurisdiction (or U.S. Territory) in which 

it claims to be a resident or the jurisdiction (or U.S. Territory) in which the

Entity was incorporated or organized. 

4. With respect to a Financial Account maintained in a jurisdiction with 

anti-money laundering rules that have been approved by the IRS in

connection with a QI agreement (as described in relevant U.S. Treasury

Regulations), any of the documents, other than a Form W-8 or W-9,

referenced in the jurisdiction’s attachment to the QI agreement for 

identifying individuals or Entities. 

5. Any financial statement, third-party credit report, bankruptcy filing, or 
	 	 	 	 	 	

	 	 	 	 	 	 	

	 	 	

 

	 	 	 	 	 	 	 	 	

	 	 	 

		

U.S. Securities and Exchange Commission report. 

E. Alternative Procedures for Financial Accounts Held by Individual

Beneficiaries of a Cash Value Insurance Contract. A Reporting Malaysian 

Financial Institution may presume that an individual beneficiary (other than the 

owner) of a Cash Value Insurance Contract receiving a death benefit is not a 

Specified U.S. Person and may treat such Financial Account as other than a U.S.

Reportable Account unless the Reporting Malaysian Financial Institution has

actual knowledge, or reason to know, that the beneficiary is a Specified U.S. 

Person. A Reporting Malaysian Financial Institution has reason to know that a 

beneficiary of a Cash Value Insurance Contract is a Specified U.S. Person if the 

information collected by the Reporting Malaysian Financial Institution and 

associated with the beneficiary contains U.S. indicia as described in subparagraph 

(B)(1) of section II of this Annex I. If a Reporting Malaysian Financial Institution 

has actual knowledge, or reason to know, that the beneficiary is a Specified U.S. 

Person, the Reporting Malaysian Financial Institution must follow the procedures

in subparagraph B(3) of section II of this Annex I. 

F. Reliance on Third Parties. Regardless of whether an election is made 

under paragraph C of section I of this Annex I, Malaysia may permit Reporting 

Malaysian Financial Institutions to rely on due diligence procedures performed by 

third parties, to the extent provided in relevant U.S. Treasury Regulations. 

G. Alternative Procedures for New Accounts Opened Prior to Entry Into

Force of this Agreement.

1. Applicability. If Malaysia has provided a written notice to the United 

States prior to entry into force of this Agreement that, as of July 1, 2014, 

Malaysia lacked the legal authority to require Reporting Malaysian Financial 

Institutions either: (i) to require Account Holders of New Individual 

Accounts to provide the self-certification specified in section III of this 

Annex I, or (ii) to perform all the due diligence procedures related to New 

Entity Accounts specified in section V of this Annex I, then Reporting 

Malaysian Financial Institutions may apply the alternative procedures 

described in subparagraph G(2) of this section, as applicable, to such New 

Accounts, in lieu of the procedures otherwise required under this Annex I. 

The alternative procedures described in subparagraph G(2) of this section

shall be available only for those New Individual Accounts or New Entity 

Accounts, as applicable, opened prior to the earlier of: (i) the date Malaysia 

has the ability to compel Reporting Malaysian Financial Institutions to 

comply with the due diligence procedures described in section III or section 

V of this Annex I, as applicable, which date Malaysia shall inform the United 

States of in writing by the date of entry into force of this Agreement, or (ii) 

the date of entry into force of this Agreement. If the alternative procedures

for New Entity Accounts opened on or after July 1, 2014, and before January 

1, 2015, described in paragraph H of this section are applied with respect to 
 

 

 

 

 

all New Entity Accounts or a clearly identified group of such accounts, the 

alternative procedures described in this paragraph G may not be applied 

with respect to such New Entity Accounts. For all other New Accounts,

Reporting Malaysian Financial Institutions must apply the due diligence 

procedures described in section III or section V of this Annex I, as applicable, 

to determine if the account is a U.S. Reportable Account or an account held

by a Non-Participating Financial Institution. 

2. Alternative Procedures.

a) Within one year after the date of entry into force of this 

Agreement, Reporting Malaysian Financial Institutions must: (i) 

with respect to a New Individual Account described in

subparagraph G(1) of this section, request the self-certification

specified in section III of this Annex I and confirm the

reasonableness of such self-certification consistent with the 

procedures described in section III of this Annex I, and (ii) with 

respect to a New Entity Account described in subparagraph G(1)

of this section, perform the due diligence procedures specified in

section V of this Annex I and request information as necessary to 

document the account, including any self-certification, required 

by section V of this Annex I. 

b) Malaysia must report on any New Account that is identified 

pursuant to subparagraph G(2)(a) of this section as a U.S.

Reportable Account or as an account held by a Non-Participating 

Financial Institution, as applicable, by the date that is the later of:

(i) September 30 next following the date that the account is

identified as a U.S. Reportable Account or as an account held by a 

Non-Participating Financial Institution, as applicable, or (ii) 90 

days after the account is identified as a U.S. Reportable Account 

or as an account held by a Non-Participating Financial Institution, 

as applicable. The information required to be reported with 

respect to such a New Account is any information that would 

have been reportable under this Agreement if the New Account 

had been identified as a U.S. Reportable Account or as an account

held by a Non-Participating Financial Institution, as applicable, as 

of the date the account was opened. 

c) By the date that is one year after the date of entry into force of

this Agreement, Reporting Malaysian Financial Institutions must 

close any New Account described in subparagraph G(1) of this

section for which it was unable to collect the required selfcertification or other documentation pursuant to the procedures 

described in subparagraph G(2)(a) of this section. In addition, by

the date that is one year after the date of entry into force of this 
 

 

 

 

 

	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 

Agreement, Reporting Malaysian Financial Institutions must: (i) 

with respect to such closed accounts that prior to such closure 

were New Individual Accounts (without regard to whether such

accounts were High Value Accounts), perform the due diligence 

procedures specified in paragraph D of section II of this Annex I, 

or (ii) with respect to such closed accounts that prior to such 

closure were New Entity Accounts, perform the due diligence 

procedures specified in section IV of this Annex I. 

d) Malaysia must report on any closed account that is identified 

pursuant to subparagraph G(2)(c) of this section as a U.S. 

Reportable Account or as an account held by a Non-Participating 

Financial Institution, as applicable, by the date that is the later of:

(i) September 30 next following the date that the account is

identified as a U.S. Reportable Account or as an account held by a 

Non-Participating Financial Institution, as applicable, or (ii) 90 

days after the account is identified as a U.S. Reportable Account 

or as an account held by a Non-Participating Financial Institution, 

as applicable. The information required to be reported for such a 

closed account is any information that would have been 

reportable under this Agreement if the account had been 

identified as a U.S. Reportable Account or as an account held by a 

Non-Participating Financial Institution, as applicable, as of the 

date the account was opened. 

H. Alternative Procedures for New Entity Accounts Opened on or after

July 1, 2014, and before January 1, 2015. For New Entity Accounts opened on

or after July 1, 2014, and before January 1, 2015, either with respect to all New 

Entity Accounts or, separately, with respect to any clearly identified group of such

accounts, Malaysia may permit Reporting Malaysian Financial Institutions to treat

such accounts as Preexisting Entity Accounts and apply the due diligence 

procedures related to Preexisting Entity Accounts specified in section IV of this 

Annex I in lieu of the due diligence procedures specified in section V of this Annex 

I. In this case, the due diligence procedures of section IV of this Annex I must be 

applied without regard to the account balance or value threshold specified in

paragraph A of section IV of this Annex I. 
	 	

 

 

	 	 	 	 	 	 

 

	 	

ANNEX II

The following Entities shall be treated as exempt beneficial owners or deemedcompliant FFIs, as the case may be, and the following accounts are excluded from the 

definition of Financial Accounts. 

This Annex II may be modified by a mutual written decision entered into between the

Competent Authorities of Malaysia and the United States: (1) to include additional 

Entities and accounts that present a low risk of being used by U.S. Persons to evade U.S. 

tax and that have similar characteristics to the Entities and accounts described in this

Annex II as of the date of signature of the Agreement; or (2) to remove Entities and 

accounts that, due to changes in circumstances, no longer present a low risk of being

used by U.S. Persons to evade U.S. tax. Any such addition or removal shall be effective 

on the date of signature of the mutual decision, unless otherwise provided therein.

Procedures for reaching such a mutual decision may be included in the mutual

agreement or arrangement described in paragraph 6 of Article 3 of the Agreement. 

I. Exempt Beneficial Owners other than Funds. The following Entities shall be

treated as Non-Reporting Malaysian Financial Institutions and as exempt beneficial

owners for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code, 

other than with respect to a payment that is derived from an obligation held in 

connection with a commercial financial activity of a type engaged in by a Specified 

Insurance Company, Custodial Institution, or Depository Institution. 

A. Governmental Entity. The Government of Malaysia, any political 

subdivision of Malaysia (which, for the avoidance of doubt, includes a state, 

province, county, or municipality), or any wholly owned agency or

instrumentality of Malaysia or any one or more of the foregoing (each, a 

“Malaysian Governmental Entity”). This category is comprised of the 

integral parts, controlled entities, and political subdivisions of Malaysia. 

1. An integral part of Malaysia means any person, organization, agency, 

bureau, fund, instrumentality, or other body, however designated, that 

constitutes a governing authority of Malaysia. The net earnings of the 

governing authority must be credited to its own account or to other

accounts of Malaysia, with no portion inuring to the benefit of any 

private person. An integral part does not include any individual who is 

a sovereign, official, or administrator acting in a private or personal 

capacity. 
 

 

	 	

 

	 	 

	 	 	 	 	 	 

2. A controlled entity means an Entity that is separate in form from

Malaysia or that otherwise constitutes a separate juridical entity, 

provided that: 

a) The Entity is wholly owned and controlled by one or more

Malaysian Governmental Entities directly or through one or more

controlled entities; 

b) The Entity’s net earnings are credited to its own account or to the 

accounts of one or more Malaysian Governmental Entities, with 

no portion of its income inuring to the benefit of any private 

person; and 

c) The Entity’s assets vest in one or more Malaysian Governmental 

Entities upon dissolution. 

3. Income does not inure to the benefit of private persons if such persons 

are the intended beneficiaries of a governmental program, and the

program activities are performed for the general public with respect to 

the common welfare or relate to the administration of some phase of 

government. Notwithstanding the foregoing, however, income is

considered to inure to the benefit of private persons if the income is

derived from the use of a governmental entity to conduct a commercial 

business, such as a commercial banking business, that provides 

financial services to private persons. 

B. International Organization. Any international organization or wholly 

owned agency or instrumentality thereof. This category includes any 

intergovernmental organization (including a supranational organization) (1) 

that is comprised primarily of non-U.S. governments; (2) that has in effect a 

headquarters or substantially similar agreement with Malaysia; and (3) the 

income of which does not inure to the benefit of private persons. 

C. Central Bank. An institution that is by law or government sanction the 

principal authority, other than the government of Malaysia itself, issuing 

instruments intended to circulate as currency. Such an institution may 

include an instrumentality that is separate from the government of Malaysia, 

whether or not owned in whole or in part by Malaysia. 

II. Funds that Qualify as Exempt Beneficial Owners. The following Entities shall 

be treated as Non-Reporting Malaysian Financial Institutions and as exempt 
 

 

 

 

 

beneficial owners for purposes of sections 1471 and 1472 of the U.S. Internal 

Revenue Code. 

A. Broad Participation Retirement Fund. A fund established in Malaysia to 

provide retirement, disability, or death benefits, or any combination thereof, 

to beneficiaries that are current or former employees (or persons designated 

by such employees) of one or more employers in consideration for services

rendered, provided that the fund: 

1. Does not have a single beneficiary with a right to more than five 

percent of the fund’s assets; 

2. Is subject to government regulation and either (a) provides annual 

information reporting about its beneficiaries to the relevant tax 

authorities in Malaysia or (b) is overseen by the Ministry of Finance of 

Malaysia, produces annual information statements of its beneficiaries,

which are available upon request, to the relevant tax authorities in 

Malaysia; and 

3. Satisfies at least one of the following requirements: 

a) The fund is generally exempt from tax in Malaysia on investment 

income under the laws of Malaysia due to its status as a

retirement or pension plan; 

b) The fund receives at least 50 percent of its total contributions

(other than transfers of assets from other plans described in 

paragraphs A through C of this section or from retirement and 

pension accounts described in subparagraph A(1) of section V of

this Annex II) from the sponsoring employers; 

c) Distributions or withdrawals from the fund are allowed only upon 

the occurrence of specified events related to retirement, 

disability, or death (except rollover distributions to other 

retirement funds described in paragraphs A through C of this

section or retirement and pension accounts described in

subparagraph A(1) of section V of this Annex II), or penalties

apply to distributions or withdrawals made before such specified 

events; or 

d) Contributions (other than certain permitted make-up 

contributions) by employees to the fund are limited by reference 
 

 

	 	 	 	 	 	 	 	 	

	 	 	 	 	 

 

 

 

 

to earned income of the employee or may not exceed $50,000 

annually, applying the rules set forth in Annex I for account 

aggregation and currency translation. 

III. Small or Limited Scope Financial Institutions that Qualify as Deemed‐

Compliant FFIs. The following Financial Institutions are Non-Reporting 

Malaysian Financial Institutions that shall be treated as deemed-compliant FFIs 

for purposes of section 1471 of the U.S. Internal Revenue Code. 

A. Financial Institution with a Local Client Base. A Financial Institution 

satisfying the following requirements: 

1. The Financial Institution must be licensed and regulated as a financial

institution under the laws of Malaysia; 

2. The Financial Institution must have no fixed place of business outside 

of Malaysia. For this purpose, a fixed place of business does not 

include a location that is not advertised to the public and from which 

the Financial Institution performs solely administrative support 

functions; 

3. The Financial Institution must not solicit customers or Account 

Holders outside Malaysia. For this purpose, a Financial Institution 

shall not be considered to have solicited customers or Account Holders 

outside Malaysia merely because the Financial Institution (a) operates 

a website, provided that the website does not specifically indicate that 

the Financial Institution provides Financial Accounts or services to

nonresidents, and does not otherwise target or solicit U.S. customers or

Account Holders, or (b) advertises in print media or on a radio or

television station that is distributed or aired primarily within Malaysia

but is also incidentally distributed or aired in other countries, provided 

that the advertisement does not specifically indicate that the Financial 

Institution provides Financial Accounts or services to nonresidents, 

and does not otherwise target or solicit U.S. customers or Account 

Holders; 

4. The Financial Institution must be required under the laws of Malaysia

to identify resident Account Holders for purposes of either information 

reporting or withholding of tax with respect to Financial Accounts held

by residents or for purposes of satisfying Malaysia’s AML due diligence 

requirements; 
 

 

5. At least 98 percent of the Financial Accounts by value maintained by 

the Financial Institution must be held by residents (including residents

that are Entities) of Malaysia; 

6. By the later of July 1, 2014, or the date that the Financial Institution 

claims treatment as a deemed-compliant FFI pursuant to this 

paragraph A, the Financial Institution must have policies and

procedures, consistent with those set forth in Annex I, to prevent the 

Financial Institution from providing a Financial Account to any NonParticipating Financial Institution and to monitor whether the 

Financial Institution opens or maintains a Financial Account for any 

Specified U.S. Person who is not a resident of Malaysia (including a U.S. 

Person that was a resident of Malaysia when the Financial Account was 

opened but subsequently ceases to be a resident of Malaysia) or any 

Passive NFFE with Controlling Persons who are U.S. residents or U.S. 

citizens who are not residents of Malaysia; 

7. Such policies and procedures must provide that if any Financial

Account held by a Specified U.S. Person who is not a resident of 

Malaysia or by a Passive NFFE with Controlling Persons who are U.S. 

residents or U.S. citizens who are not residents of Malaysia is 

identified, the Financial Institution must report such Financial Account

as would be required if the Financial Institution were a Reporting 

Malaysian Financial Institution (including by following the applicable 

registration requirements on the IRS FATCA registration website) or 

close such Financial Account; 

8. With respect to a Preexisting Account held by an individual who is not 

a resident of Malaysia or by an Entity, the Financial Institution must 

review those Preexisting Accounts in accordance with the procedures

set forth in Annex I applicable to Preexisting Accounts to identify any 

U.S. Reportable Account or Financial Account held by a NonParticipating Financial Institution, and must report such Financial

Account as would be required if the Financial Institution were a

Reporting Malaysian Financial Institution (including by following the 

applicable registration requirements on the IRS FATCA registration 

website) or close such Financial Account; 

9. Each Related Entity of the Financial Institution that is a Financial 

Institution must be incorporated or organized in Malaysia and, with 

the exception of any Related Entity that is a retirement fund described 
 

 

		

 

 

 

	 	 	 

in paragraphs A through C of section II of this Annex II, satisfy the 

requirements set forth in this paragraph A; and 

10. The Financial Institution must not have policies or practices that 

discriminate against opening or maintaining Financial Accounts for 

individuals who are Specified U.S. Persons and residents of Malaysia. 

B. Local Bank. A Financial Institution satisfying the following requirements: 

1. The Financial Institution operates solely as (and is licensed and 

regulated under the laws of Malaysia as) (a) a bank or (b) a credit

union or similar cooperative credit organization that is operated 

without profit; 

2. The Financial Institution’s business consists primarily of receiving 

deposits from and making loans to, with respect to a bank, unrelated 

retail customers and, with respect to a credit union or similar

cooperative credit organization, members, provided that no member 

has a greater than five percent interest in such credit union or 

cooperative credit organization; 

3. The Financial Institution satisfies the requirements set forth in 

subparagraphs A(2) and A(3) of this section, provided that, in addition 

to the limitations on the website described in subparagraph A(3) of 

this section, the website does not permit the opening of a Financial

Account; 

4. The Financial Institution does not have more than $175 million in 

assets on its balance sheet, and the Financial Institution and any 

Related Entities, taken together, do not have more than $500 million in 

total assets on their consolidated or combined balance sheets; and 

5. Any Related Entity must be incorporated or organized in Malaysia, and 

any Related Entity that is a Financial Institution, with the exception of

any Related Entity that is a retirement fund described in paragraphs A 

through C of section II of this Annex II or a Financial Institution with 

only low-value accounts described in paragraph C of this section, must 

satisfy the requirements set forth in this paragraph B. 

C. Financial Institution with Only Low‐Value Accounts. A Malaysian

Financial Institution satisfying the following requirements: 
 

 

 

	 	 	 

 

 

 

	 	 	 	 	 	 	 	 	

 

1. The Financial Institution is not an Investment Entity; 

2. No Financial Account maintained by the Financial Institution or any 

Related Entity has a balance or value in excess of $50,000, applying

the rules set forth in Annex I for account aggregation and currency 

translation; and 

3. The Financial Institution does not have more than $50 million in 

assets on its balance sheet, and the Financial Institution and any 

Related Entities, taken together, do not have more than $50 million in 

total assets on their consolidated or combined balance sheets. 

D. Qualified Credit Card Issuer. A Malaysian Financial Institution satisfying 

the following requirements: 

1. The Financial Institution is a Financial Institution solely because it is an 

issuer of credit cards that accepts deposits only when a customer 

makes a payment in excess of a balance due with respect to the card 

and the overpayment is not immediately returned to the customer; and 

2. By the later of July 1, 2014, or the date that the Financial Institution 

claims treatment as a deemed-compliant FFI pursuant to this 

paragraph D, the Financial Institution implements policies and

procedures to either prevent a customer deposit in excess of $50,000, 

or to ensure that any customer deposit in excess of $50,000, in each 

case applying the rules set forth in Annex I for account aggregation 

and currency translation, is refunded to the customer within 60 days. 

For this purpose, a customer deposit does not refer to credit balances

to the extent of disputed charges but does include credit balances

resulting from merchandise returns. 

IV. Investment Entities that Qualify as Deemed‐Compliant FFIs and Other

Special Rules. The Financial Institutions described in paragraphs A through E of 

this section are Non-Reporting Malaysian Financial Institutions that shall be

treated as deemed-compliant FFIs for purposes of section 1471 of the U.S. Internal 

Revenue Code. In addition, paragraph F of this section provides special rules 

applicable to an Investment Entity. 

A. Trustee‐Documented Trust. A trust established under the laws of 

Malaysia to the extent that the trustee of the trust is a Reporting U.S. 

Financial Institution, Reporting Model 1 FFI, or Participating FFI and reports 
	 	 	 	 	

 

 

 

 

 

 

 

 

 

 

 

 

 

 

all information required to be reported pursuant to the Agreement with

respect to all U.S. Reportable Accounts of the trust. 

B. Sponsored Investment Entity and Controlled Foreign Corporation. A

Financial Institution described in subparagraph B(1) or B(2) of this section 

having a sponsoring entity that complies with the requirements of

subparagraph B(3) of this section. 

1. A Financial Institution is a sponsored investment entity if (a) it is an 

Investment Entity established in Malaysia that is not a qualified 

intermediary, withholding foreign partnership, or withholding foreign 

trust pursuant to relevant U.S. Treasury Regulations; and (b) an Entity

has agreed with the Financial Institution to act as a sponsoring entity 

for the Financial Institution. 

2. A Financial Institution is a sponsored controlled foreign corporation if 

(a) the Financial Institution is a controlled foreign corporation1 

organized under the laws of Malaysia that is not a qualified

intermediary, withholding foreign partnership, or withholding foreign 

trust pursuant to relevant U.S. Treasury Regulations; (b) the Financial 

Institution is wholly owned, directly or indirectly, by a Reporting U.S. 

Financial Institution that agrees to act, or requires an affiliate of the 

Financial Institution to act, as a sponsoring entity for the Financial

Institution; and (c) the Financial Institution shares a common 

electronic account system with the sponsoring entity that enables the 

sponsoring entity to identify all Account Holders and payees of the 

Financial Institution and to access all account and customer

information maintained by the Financial Institution including, but not 

limited to, customer identification information, customer 

documentation, account balance, and all payments made to the 

Account Holder or payee. 

3. The sponsoring entity complies with the following requirements: 

1 A “controlled foreign corporation” means any foreign corporation if more than 50 percent of the total combined 

voting power of all classes of stock of such corporation entitled to vote, or the total value of the stock of such 

corporation, is owned, or is considered as owned, by “United States shareholders” on any day during the 

taxable year of such foreign corporation. The term a “United States shareholder” means, with respect to any 

foreign corporation, a United States person who owns, or is considered as owning, 10 percent or more of the 

total combined voting power of all classes of stock entitled to vote of such foreign corporation, or, beginning 

with tax years of foreign corporations beginning after December 31, 2017, and taxable years of United States 

shareholders with or within which such taxable years of foreign corporations end, 10 percent or more of the 

total value of shares of all classes of stock of such foreign corporation. 
 

 

 

 

	 	 	

 

a) The sponsoring entity is authorized to act on behalf of the 

Financial Institution (such as a fund manager, trustee, corporate 

director, or managing partner) to fulfill applicable registration 

requirements on the IRS FATCA registration website; 

b) The sponsoring entity has registered as a sponsoring entity with

the IRS on the IRS FATCA registration website; 

c) If the sponsoring entity identifies any U.S. Reportable Accounts 

with respect to the Financial Institution, the sponsoring entity 

registers the Financial Institution pursuant to applicable 

registration requirements on the IRS FATCA registration website 

on or before the later of December 31, 2016 and the date that is 

90 days after such a U.S. Reportable Account is first identified; 

d) The sponsoring entity agrees to perform, on behalf of the Financial

Institution, all due diligence, withholding, reporting, and other 

requirements that the Financial Institution would have been 

required to perform if it were a Reporting Malaysian Financial

Institution; 

e) The sponsoring entity identifies the Financial Institution and 

includes the identifying number of the Financial Institution 

(obtained by following applicable registration requirements on 

the IRS FATCA registration website) in all reporting completed on 

the Financial Institution’s behalf; and 

f) The sponsoring entity has not had its status as a sponsor revoked. 

C. Sponsored, Closely Held Investment Vehicle. A Malaysian Financial

Institution satisfying the following requirements: 

1. The Financial Institution is a Financial Institution solely because it is an

Investment Entity and is not a qualified intermediary, withholding 

foreign partnership, or withholding foreign trust pursuant to relevant 

U.S. Treasury Regulations; 

2. The sponsoring entity is a Reporting U.S. Financial Institution,

Reporting Model 1 FFI, or Participating FFI, is authorized to act on 
 

 

 

 

 

 

 

	 	 	

 

behalf of the Financial Institution (such as a professional manager,

trustee, or managing partner), and agrees to perform, on behalf of the 

Financial Institution, all due diligence, withholding, reporting, and 

other requirements that the Financial Institution would have been 

required to perform if it were a Reporting Malaysian Financial

Institution; 

3. The Financial Institution does not hold itself out as an investment 

vehicle for unrelated parties; 

4. Twenty or fewer individuals own all of the debt interests and Equity 

Interests in the Financial Institution (disregarding debt interests 

owned by Participating FFIs and deemed-compliant FFIs and Equity 

Interests owned by an Entity if that Entity owns 100 percent of the 

Equity Interests in the Financial Institution and is itself a sponsored 

Financial Institution described in this paragraph C); and 

5. The sponsoring entity complies with the following requirements: 

a) The sponsoring entity has registered as a sponsoring entity with

the IRS on the IRS FATCA registration website; 

b) The sponsoring entity agrees to perform, on behalf of the 

Financial Institution, all due diligence, withholding, reporting, 

and other requirements that the Financial Institution would have 

been required to perform if it were a Reporting Malaysian 

Financial Institution and retains documentation collected with

respect to the Financial Institution for a period of six years; 

c) The sponsoring entity identifies the Financial Institution in all 

reporting completed on the Financial Institution’s behalf; and 

d) The sponsoring entity has not had its status as a sponsor revoked. 

D. Investment Advisors and Investment Managers. An Investment Entity 

established in Malaysia that is a Financial Institution solely because it (1) 

renders investment advice to, and acts on behalf of, or (2) manages 

portfolios for, and acts on behalf of, a customer for the purposes of investing, 

managing, or administering funds deposited in the name of the customer 
 

 

 

 

 

 

with a Financial Institution other than a Non-Participating Financial

Institution. 

E. Collective Investment Vehicle. An Investment Entity established in 

Malaysia that is regulated as a collective investment vehicle, provided that 

all of the interests in the collective investment vehicle (including debt 

interests in excess of $50,000) are held by or through one or more exempt 

beneficial owners, Active NFFEs described in subparagraph B(4) of section

VI of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial

Institutions that are not Non-Participating Financial Institutions. 

F. Special Rules. The following rules apply to an Investment Entity: 

1. With respect to interests in an Investment Entity that is a collective 

investment vehicle described in paragraph E of this section, the 

reporting obligations of any Investment Entity (other than a Financial

Institution through which interests in the collective investment vehicle

are held) shall be deemed fulfilled. 

2. With respect to interests in: 

a) An Investment Entity established in a Partner Jurisdiction that is 

regulated as a collective investment vehicle, all of the interests in 

which (including debt interests in excess of $50,000) are held by 

or through one or more exempt beneficial owners, Active NFFEs

described in subparagraph B(4) of section VI of Annex I, U.S.

Persons that are not Specified U.S. Persons, or Financial 

Institutions that are not Non-Participating Financial Institutions;

or 

b) An Investment Entity that is a qualified collective investment

vehicle under relevant U.S. Treasury Regulations; 

the reporting obligations of any Investment Entity that is a Malaysian 

Financial Institution (other than a Financial Institution through which

interests in the collective investment vehicle are held) shall be deemed 

fulfilled. 

3. With respect to interests in an Investment Entity established in 

Malaysia that is not described in paragraph E or subparagraph F(2) of 

this section, consistent with paragraph 4 of Article 5 of the Agreement, 
	 	 	 	 

	 	 	

 

 

 

the reporting obligations of all other Investment Entities with respect 

to such interests shall be deemed fulfilled if the information required

to be reported by the first-mentioned Investment Entity pursuant to 

the Agreement with respect to such interests is reported by such 

Investment Entity or another person. 

V. Accounts Excluded from Financial Accounts. The following accounts are 

excluded from the definition of Financial Accounts and therefore shall not be

treated as U.S. Reportable Accounts. 

A. Certain Savings Accounts.

1. Retirement and Pension Account. A retirement or pension account 

maintained in Malaysia that satisfies the following requirements under 

the laws of Malaysia. 

a) The account is subject to regulation as a personal retirement 

account or is part of a registered or regulated retirement or 

pension plan for the provision of retirement or pension benefits

(including disability or death benefits); 

b) The account is tax-favored (i.e., contributions to the account that

would otherwise be subject to tax under the laws of Malaysia are 

deductible or excluded from the gross income of the account 

holder or taxed at a reduced rate, or taxation of investment

income from the account is deferred or taxed at a reduced rate); 

c) Annual information reporting is required to the tax authorities in 

Malaysia with respect to the account; or the account is an account 

in a Broad Participation Retirement Fund that is overseen by the 

Ministry of Finance of Malaysia, there are annual information 

statements of its beneficiaries, which are available upon request 

to the relevant tax authorities in Malaysia; 

d) Withdrawals are conditioned on reaching a specified retirement 

age, disability, or death, or penalties apply to withdrawals made 

before such specified events; and 

e) Either (i) annual contributions are limited to $50,000 or less, or 

(ii) there is a maximum lifetime contribution limit to the account 
 

 

 

 

 

	 	 	 

of $1,000,000 or less, in each case applying the rules set forth in 

Annex I for account aggregation and currency translation. 

2. Non-Retirement Savings Accounts. An account maintained in Malaysia

(other than an insurance or Annuity Contract) that satisfies the 

following requirements under the laws of Malaysia. 

a) The account is subject to regulation as a savings vehicle for 

purposes other than for retirement; 

b) The account is tax-favored (i.e., contributions to the account that

would otherwise be subject to tax under the laws of Malaysia are 

deductible or excluded from the gross income of the account 

holder or taxed at a reduced rate, or taxation of investment

income from the account is deferred or taxed at a reduced rate); 

c) Withdrawals are conditioned on meeting specific criteria related 

to the purpose of the savings account (for example, the provision 

of educational or medical benefits), or penalties apply to

withdrawals made before such criteria are met; and 

d) Annual contributions are limited to $50,000 or less, applying the 

rules set forth in Annex I for account aggregation and currency 

translation. 

B. Certain Term Life Insurance Contracts. A life insurance contract

maintained in Malaysia with a coverage period that will end before the

insured individual attains age 90, provided that the contract satisfies the 

following requirements: 

1. Periodic premiums, which do not decrease over time, are payable at 

least annually during the period the contract is in existence or until the 

insured attains age 90, whichever is shorter; 

2. The contract has no contract value that any person can access (by

withdrawal, loan, or otherwise) without terminating the contract; 

3. The amount (other than a death benefit) payable upon cancellation or 

termination of the contract cannot exceed the aggregate premiums

paid for the contract, less the sum of mortality, morbidity, and expense 

charges (whether or not actually imposed) for the period or periods of 
	 	 	 	 		 

 

	 	

 

 

 

 

 

 

 

the contract’s existence and any amounts paid prior to the cancellation 

or termination of the contract; and 

4. The contract is not held by a transferee for value. 

C. Account Held By an Estate. An account maintained in Malaysia that is held

solely by an estate if the documentation for such account includes a copy of

the deceased’s will or death certificate. 

D. Escrow Accounts. An account maintained in Malaysia established in 

connection with any of the following: 

1. A court order or judgment. 

2. A sale, exchange, or lease of real or personal property, provided that

the account satisfies the following requirements: 

a) The account is funded solely with a down payment, earnest 

money, deposit in an amount appropriate to secure an obligation 

directly related to the transaction, or a similar payment, or is

funded with a financial asset that is deposited in the account in

connection with the sale, exchange, or lease of the property; 

b) The account is established and used solely to secure the

obligation of the purchaser to pay the purchase price for the

property, the seller to pay any contingent liability, or the lessor or 

lessee to pay for any damages relating to the leased property as

agreed under the lease; 

c) The assets of the account, including the income earned thereon, 

will be paid or otherwise distributed for the benefit of the 

purchaser, seller, lessor, or lessee (including to satisfy such

person’s obligation) when the property is sold, exchanged, or

surrendered, or the lease terminates; 

d) The account is not a margin or similar account established in

connection with a sale or exchange of a financial asset; and 

e) The account is not associated with a credit card account. 

3. An obligation of a Financial Institution servicing a loan secured by real

property to set aside a portion of a payment solely to facilitate the 
	 	

 

	 	 	

 

 

		

 

 

payment of taxes or insurance related to the real property at a later 

time. 

4. An obligation of a Financial Institution solely to facilitate the payment 

of taxes at a later time. 

E. Partner Jurisdiction Accounts. An account maintained in Malaysia and 

excluded from the definition of Financial Account under an agreement 

between the United States and another Partner Jurisdiction to facilitate the 

implementation of FATCA, provided that such account is subject to the same 

requirements and oversight under the laws of such other Partner 

Jurisdiction as if such account were established in that Partner Jurisdiction

and maintained by a Partner Jurisdiction Financial Institution in that Partner 

Jurisdiction. 

VI. Definitions. The following additional definitions shall apply to the descriptions 

above: 

A. Reporting Model 1 FFI. The term Reporting Model 1 FFI means a Financial

Institution with respect to which a non-U.S. government or agency thereof

agrees to obtain and exchange information pursuant to a Model 1 IGA, other 

than a Financial Institution treated as a Non-Participating Financial 

Institution under the Model 1 IGA. For purposes of this definition, the term 

Model 1 IGA means an arrangement between the United States or the

Treasury Department and a non-U.S. government or one or more agencies

thereof to implement FATCA through reporting by Financial Institutions to 

such non-U.S. government or agency thereof, followed by automatic 

exchange of such reported information with the IRS. 

B. Participating FFI. The term Participating FFI means a Financial Institution

that has agreed to comply with the requirements of an FFI Agreement, 

including a Financial Institution described in a Model 2 IGA that has agreed 

to comply with the requirements of an FFI Agreement. The term 

Participating FFI also includes a qualified intermediary branch of a

Reporting U.S. Financial Institution, unless such branch is a Reporting Model

1 FFI. For purposes of this definition, the term FFI Agreement means an

agreement that sets forth the requirements for a Financial Institution to be

treated as complying with the requirements of section 1471(b) of the U.S.

Internal Revenue Code. In addition, for purposes of this definition, the term 

Model 2 IGA means an arrangement between the United States or the

Treasury Department and a non-U.S. government or one or more agencies 
thereof to facilitate the implementation of FATCA through reporting by 

Financial Institutions directly to the IRS in accordance with the 

requirements of an FFI Agreement, supplemented by the exchange of 

information between such non-U.S. government or agency thereof and the 

IRS.