Malaysia
Malaysia can legally issue the following five types of rulings within the scope of the transparency framework: (i) preferential regimes; 1) Pioneer status – contract R&D, 2) Biotechnology industry, 3) Principal hub, 4) MSC Malaysia, 5) Green technology services and 6) Special economic regions, 7) High technology regime and 8) Treasury management centre. (ii) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (iii) rulings providing for unilateral downward adjustments; (iv) permanent establishment rulings; and (v) related party conduit rulings.
First reporting fiscal year: Commencing on or after 1 January 2017. Malaysia also allowed MNE Groups to file a CbC report on a voluntary basis, for reporting fiscal years commencing between 1 January 2016 and 31 December 2016.
Malaysia aspires to be the world’s top Muslim-friendly destination. In this regard, it plans to expand its partnerships internationally to establish itself as a lifestyle destination and a health hub within the context of Islamic tourism. These objectives are already in motion: Malaysia hosted the World Islamic Tourism Conference from 17-19 October 2022. The Islamic Tourism Centre (ITC) is the agency entrusted by the Ministry of Tourism, Arts and Culture to drive Malaysia’s 2020-30 Islamic tourism agenda. At the same time, Tourism Malaysia’s Strategic Plan 2022-26 aims to reinvigorate the post-pandemic tourism landscape through a coherent and holistic approach to ensure the demand and supply of sustainable tourism. This country note discusses Malaysia’s potential in Islamic tourism, and the need of enhancing tourist experience through smart tourism and water villages and cultural products.
Malaysia can legally issue the following five types of rulings within the scope of the transparency framework: (i) preferential regimes; 1) Pioneer status – contract R&D, 2) Biotechnology industry, 3) Principal hub, 4) MSC Malaysia, 5) Green technology services and 6) Special economic regions, 7) High technology regime and 8) Treasury management centre. (ii) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (iii) rulings providing for unilateral downward adjustments; (iv) permanent establishment rulings; and (v) related party conduit rulings.
This report analyses the implementation of the AEOI Standard in Malaysia with respect to the requirements of the AEOI Terms of Reference. It assesses both the legal frameworks put in place to implement the AEOI Standard and the effectiveness of the implementation of the AEOI Standard in practice.
This chapter presents the country profile for Malaysia. It provides an overview of the current de jure requirements for the institutions, tools and processes of regulatory governance and, where possible, how these have been implemented in practice. The profile focus on three aspects of regulatory governance pertinent to the past, present and near future of regulatory reforms in the ASEAN region. The first is whole-of-government approachesto regulatory policy making, including national and international commitments to better regulation that are driving domestic reform processes. The second is the use of good regulatory practices, including regulatory impact assessments (RIAs), stakeholder engagement and ex post review. The third is approaches to digitalisation, or how countries are using digital tools to respond to regulatory challenges, and is the newest frontier for better regulation reforms in both ASEAN and OECD communities. The information contained in this and the other profiles serves as the basis for the analysis of trends in regulatory reform presented in Chapter 1.
First reporting fiscal year: Commencing on or after 1 January 2017. Malaysia also allowed MNE Groups to file a CbC report on a voluntary basis, for reporting fiscal years commencing between 1 January 2016 and 31 December 2016.
SMEs are the backbone of the Malaysian economy, accounting for 97.2% of total business establishments, generating 38.2% of GDP and providing employment for 7.3 million people. In the last few decades, a comprehensive financing ecosystem has been put in place to provide diversified funding options for SMEs from both public and private institutions. This has enabled Malaysian SMEs to continue to have access to diversified sources of financing to address their needs at various stages of development.
Malaysia can legally issue the following five types of rulings within the scope of the transparency framework: (i) preferential regimes; 1) Pioneer status – contract R&D, 2) Biotechnology industry, 3) Principal hub, 4) MSC Malaysia, 5) Green technology services and 6) Special economic regions, 7) High technology regime and 8) Treasury management centre. (ii) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (iii) rulings providing for unilateral downward adjustments; (iv) permanent establishment rulings; and (v) related party conduit rulings.
Malaysia’s legal framework implementing the AEOI Standard is in place and is consistent with the requirements of the AEOI Terms of Reference. This includes Malaysia’s domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) and its international legal framework to exchange the information with all of Malaysia’s Interested Appropriate Partners (CR2).
First reporting fiscal year: Commencing on or after 1 January 2017. Malaysia also allowed MNE Groups to file a CbC report on a voluntary basis, for reporting fiscal years commencing between 1 January 2016 and 31 December 2016.
Before the COVID-19 pandemic, Malaysia undertook a series of vigorous reforms, ranging from the improvement of regulatory framework to the digitalisation of the economy, with the aim of boosting productivity. While the protracted pandemic has inevitably stalled reform efforts in many countries, including Malaysia, strengthening the business climate has become all the more important. This will be essential to achieve a robust recovery, accelerate digitalisation, and adopt a new working environment combining productivity and sanitary precautions. This chapter discusses: 1) how Malaysia can reinvigorate business dynamism with new regulatory reforms; 2) how it can boost the uptake by businesses of digital solutions; and 3) based on the recent experience of teleworking, how it can prepare an enabling working environment for the digital age.
This Survey is published under the responsibility of the Secretary-General of the OECD. The draft report was discussed at a meeting of the Economic and Development Review Committee on 24-25 June 2021, with participation of representatives of the Malaysian authorities. The 2021 OECD Economic Survey of Malaysia was prepared by Kosuke Suzuki, Zahid Ismail, Wan Fazlin Nadia Wan Osman, Sugumar Saminathan, Mohamad Norjayadi Tamam, Zafrulla Hussein, Suraiti Zainal Abidin, Halimahton Sa'diah Let, Mohamad Muzaffar Abdul Hamid, Nurrul Nur Aisyah Hamran, Suhaimi Hamad, Peter Gal, Francesco Losma, Laurence Todd and Eva Tène, under the supervision of Patrick Lenain. It benefitted from contributions at various stages by Alvaro Pereira, Isabell Koske, Cristiana Vitale, Ashikin binti Abdul Razak, Adlina Merican binti Zainuddin Merican, Tan Fung Ling, Zaharel Reeza Bin Ruslan and Mohd Aizuddin Noor Azman. Isabelle Luong provided statistical assistance and Stephanie Henry and Karimatou Diallo provided editorial support. Support from the World Bank and the governments of Malaysia and Japan is gratefully acknowledged. Information about the latest as well as previous Surveys and more information about how Surveys are prepared is available at http://www.oecd.org/eco/surveys.
The COVID-19 crisis has caused a deep economic contraction in Malaysia. A recovery is projected to unfold in the second half of 2021, thanks to government intervention to control the contagion, but mutations of the virus could jeopardise the return to growth. The pandemic has revealed acute policy issues that need to be addressed. Vulnerable groups were hit severely, despite social protection support from the government, and the SME sector has more suffered from the economic downturn than large firms. This chapter discusses the macroeconomic and social impacts of the pandemic and policy responses that will be required to achieve a sustainable and inclusive recovery and progress towards high-income status, including a strategy to decarbonise economic growth.
When the pandemic struck, Malaysia was relatively well prepared thanks to past efforts to build a robust policy framework. Over the past decades, Malaysia showed remarkable commitment to improve its economy and address its social challenges. This commitment remains intact as shown by the upcoming 12th Malaysia Plan 2021-2025, a stepped-up pivot on further reforms.