National Tax Service and Malaysia Agree to 'Activate Advance Pricing Agreement System'

Kim Hyun-joon, Commissioner of the National Tax Service (left), and Sabin Samitah, Commissioner of the Malaysian Inland Revenue Board, are shaking hands and smiling brightly.

[Asia Economy Reporter Kwangho Lee] South Korea and Malaysia have agreed to activate the Advance Pricing Agreement (APA) system to prevent double taxation.

On the 12th, Kim Hyun-joon, Commissioner of the National Tax Service (NTS), held the 2nd Korea-Malaysia National Tax Commissioners' Meeting in Malaysia and announced that they reached this agreement.

This year marks the 60th anniversary of diplomatic relations between Korea and Malaysia. To commemorate this, the national tax commissioners of both countries agreed last November at the Korea-Malaysia summit to elevate bilateral relations to a "strategic partnership."

Commissioner Kim and Malaysia's Sabin Samitah discussed measures to enhance the utilization of financial account information of residents of the other country submitted by domestic financial institutions annually under the "Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information."

Malaysia has been participating in the multilateral automatic exchange of financial information, an international cooperation infrastructure to combat offshore tax evasion, since September 2018.

The commissioners agreed to strengthen cooperation to resolve double taxation issues arising from increased international transactions between the two countries more promptly. In particular, they decided to activate the APA system to prevent double taxation that may occur due to transfer pricing tax audits.

Before the commissioners' meeting, Commissioner Kim held a "Tax Administration Meeting for Korean Companies in Malaysia" to listen to tax difficulties and assess the damage status of local companies caused by the recent COVID-19 situation.

On the 18th, Commissioner Kim will hold the Korea-Vietnam National Tax Commissioners' Meeting.

Since 2003, the two countries have continuously held national tax commissioners' meetings to promote exchange and cooperation on major tax administration issues.

Commissioner Kim and Vietnam's Cao Anh Tuan are scheduled to sign an amendment extending the validity period of the Memorandum of Understanding on "Activation of Mutual Exchange Visits."

This content was produced with the assistance of AI translation services.