The penalties for non-compliance with prescribed laws are heavy. Any person convicted of an offence may be subject to a fine of not less than RM20,000, imprisonment for a term not exceeding 6 months, or both under the CRS Rules. Under the CRS Regulations, persons convicted of an offence may be subject to a fine of not more than RM1,000,000, imprisonment for a term not more than 2 years, or both.
Summary of the Common Reporting Standards
The CRS contains the reporting and due diligence standard that underpins the exchange of financial account information. The financial institutions covered by the reporting standard include custodial institutions, depository institutions, investment entities and specified insurance companies. The financial information to be reported with respect to reportable accounts includes interest, dividends, account balance or value, income from certain insurance products, sales proceeds from financial assets and other income generated with respect to assets held in the account or payment made with respect to the account. Reportable accounts include accounts held by individuals and entities (which includes trusts and foundations), and the standard includes a requirement to look through passive entities to report on the relevant controlling persons.
Identify reportable accounts:
• Identify accounts using CRS definitions as above;
• There are no de minimis limits for individual accounts, but for pre-existing entity accounts a $250,000 de minimis limit can be applied
• Amend take on procedures, including obtaining prescribed information for early adopters;
• Issue self-certification forms to account holders
• Pre-existing accounts are those in existence as at 31 December 2015;
• Carry out due diligence on pre-existing account, which are generally split into high value (above $1 million) and low value (below $1 million);
• Review pre-existing entity accounts with an account balance that exceeds $250,000 by 31 December 2017;
• Review pre-existing individual high value accounts by 31 December 2016 and review pre-existing individual low value accounts by 31 December 2017.