Common Reporting Standard (CRS) is a global standard for automatic exchange of information (AEOI) on financial account information between the governments in order to combat offshore tax evasion and protect the integrity of taxation systems.

Over 100 countries/ jurisdictions, including Malaysia, have committed to CRS. You may view the full list of CRS participating jurisdictions (i.e. Jurisdictions who agreed to participate in the CRS regime) at the OECD website

CRS mandates financial institutions located in a CRS participating jurisdiction such as Rakuten Trade to:

i. Identify and collect relevant information regarding customer's tax residency status;


ii. Report financial account information held by the customers who are tax residents in other reportable jurisdictions (i.e. two participating jurisdictions who signed a bilateral agreement to exchange financial information with one another) to the local tax authority. The information will be exchanged annually by the local tax authority with the relevant tax authorities in other participating jurisdictions.

Financial institutions in CRS participating jurisdictions including Malaysia-based Financial Institutions (e.g. Rakuten Trade) are obliged to comply with the CRS requirements.

The Foreign Account Tax Compliance Act (FATCA) is a United States federal law that aims to combat tax evasion by U.S. persons holding assets and accounts offshore.

Under FATCA, foreign financial institutions (FFIs) are required to report information about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest. FFIs must report this information to the U.S. Internal Revenue Service (IRS) or their local tax authority, which then shares the information with the IRS.

Additionally, FATCA requires U.S. taxpayers to report certain foreign financial assets and offshore accounts on their annual tax returns. Failure to comply with FATCA reporting requirements can result in significant penalties.

Overall, FATCA aims to increase transparency and discourage tax evasion by providing the IRS with information about offshore financial accounts held by U.S. taxpayers. It has led to significant changes in the way international financial institutions handle and report accounts held by U.S. taxpayers.

We are required to collect information on the country of tax residence as per the FATCA/CRS guidelines so we seek your full cooperation to provide us the related information/documents when requested.

Malaysia tax resident?

For definition of Malaysia Tax Resident (individual and Entity), please refer to the following link:

Taxpayer Identification Number (TIN)?

The term TIN means Taxpayer Identification Number or a functional equivalent in the absence of a TIN. A TIN is a unique combination of letters or numbers assigned by a jurisdiction to an entity and used to identify the entity for the purpose of administering the tax laws of such jurisdiction. For e.g. in Malaysia, the TIN will be the identification number issued by the Inland Revenue Board of Malaysia to entities.

Financial Institution?

The term "Financial Institution" means a Custodial Institution, a Depository Institution, an Investment Entity, or a Specified Insurance Company.

Depository Institution?

The term "Depository Institution" means any Entity that accepts deposits in the ordinary course of a banking or similar business.

Custodial Institution?

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% of the Entity's gross income during the shorter of: (i) the three-year period that ends on 31 December (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.

Investment Entity?

The term "Investment Entity" means any Entity:

a) that primarily conducts as a business one or more of the following activities or operations for or on behalf of a customer:

i) 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;

ii) individual and collective portfolio management; or

iii) otherwise investing, administering, or managing Financial Assets or money on behalf of other persons;

(An investment manager/investment advisor falls under the definition of Investment Entity)

b) the gross income of which is primarily attributable to investing, reinvesting, or trading in Financial Assets, if the Entity is managed by another Entity that is a Depository Institution, a Custodial Institution, a Specified Insurance Company, or an Investment Entity described in (a) above.

An entity is "managed by" another entity if the managing entity performs, either directly or indirectly or through another service provider on behalf of the managed entity, any of the activities or operations described in (a) above.

An entity only manages another entity if it has discretionary authority to manage the other entity's assets (either whole or in part). Where an entity is managed by a mix of Financial Institutions, NFEs or individuals, the entity is considered to be managed by another entity that is a Depository Institution, a Custodial Institution, a Specified Insurance Company, or the Other Investment Entity as described in (a) above, if any of the Managing Entities is such an entities.

Passive NFE?

The term "NFE" means any Entity that is not a Financial Institution. The term "Passive NFE" means any: (i) NFE that is not an Active NFE; or (ii) an Investment Entity that is not a Participating Jurisdiction Financial Institution (as described above).

 Controlling Persons?

Controlling Persons are the natural person(s) who ultimately has a controlling ownership interest (25%) in the entity. Where no natural person(s) exercises control through ownership interests, the Controlling Person(s) of the entity will be the natural person(s) who exercises control of the entity through other means. Where no natural person(s) is/are identified as exercising control of the entity through ownership interests, then under the CRS, the Reportable Persons is deemed to be the natural person(s) who hold the position of senior managing official.

 Source of information: