Common Reporting Standard
CRS is a worldwide information-gathering and reporting requirement for financial institutions (including insurance companies and takaful operators) of the Participating Jurisdictions with the aim to increase tax transparency and combat cross-border tax evasion.
All financial institutions, including AIA, are legally required to collect and report your tax details following the gazette order issued by the Malaysia Federal Government under Income Tax (Automatic Exchange of Financial Account Information) Rules 2016 ("CRS Rules").
Yes, based on the CRS Rules, all financial institutions within the Participating Jurisdiction are required to comply with the CRS requirements.
CRS Rules require us to obtain your foreign tax residency status (if any).
E.g. If you have an insurance policy with AIA, we must ask you to disclose your tax residency status by completing a form known as "CRS Self-Certification Form". If you have any foreign tax residency, we will report your information to the local government authorities or regulatory bodies. This information may be exchanged with the tax authorities of another country/jurisdiction in which you may be a tax resident.
Please contact your tax advisor or refer to the Organisation for Economic Co-Operation and Development (OECD) website for more information on Common Reporting Standards. AIA, as a financial institution, is not allowed to give you any tax advice.
You need to complete the "CRS Self-Certification Form" and confirm your tax residency status for any country other than Malaysia and the United States of America.
Under the CRS Rules, AIA is required by law to verify the information declared by you in the CRS Self-Certification. Among the supporting documents are copy of your passport, working permit, student visa, etc.
As this is a requirement of CRS Rules, AIA will not be able to process your application for insurance/takaful coverage, request for change or claims without receiving the necessary documents.
For more information about CRS, please visit OECD Automatic Exchange of Information portal, http://www.oecd.org/tax/automatic-exchange.
Definitions
A non-financial entity (NFE) is considered to be an Active NFE if it meets any of the criteria listed below. In summary, those criteria refer to:
- active NFEs by reason of income and assets; publicly traded NFEs;
- Governmental Entities, International Organisations, Central Banks, or their wholly owned entities;
- holding NFEs that are members of a nonfinancial group;
- start-up NFEs;
- NFEs that are liquidating or emerging from bankruptcy;
- treasury centres that are members of a nonfinancial group; or
- non-profit NFEs.
An entity will be classified as "Active NFE" if it meets any of the following criteria:
- less than 50% of the NFE’s gross income for the preceding calendar year or other appropriate reporting period is passive income and less than 50% of the assets held by the NFE during the preceding calendar year or other appropriate reporting period are assets that produce or are held for the production of passive income;
- the stock of the NFE is regularly traded on an established securities market or the NFE is a Related Entity of an Entity the stock of which is regularly traded on an established securities market;
- the NFE is a Governmental Entity, an International Organisation, a Central Bank, or an Entity wholly owned by one or more of the foregoing;
- substantially all of the activities of the NFE 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 does not qualify for this 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 NFE is not yet operating a business and has no prior operating history, (a “ start-up NFE”) but is investing capital into assets with the intent to operate a business other than that of a Financial Institution, provided that the NFE does not qualify for this exception after the date that is 24 months after the date of the initial organisation of the NFE;
- the NFE was not a Financial Institution in the past five years, and is in the process of liquidating its assets or is reorganising with the intent to continue or recommence operations in a business other than that of a Financial Institution;
- the NFE 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; or
- the NFE meets all of the following requirements (a “non-profit NFE”) :
- 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 organisation, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation, civic league or an organisation operated exclusively for the promotion of social welfare;
- it is exempt from income tax in its jurisdiction of residence;
- it has no shareholders or members who have a proprietary or beneficial interest in its income or assets;
- the applicable laws of the NFE’s jurisdiction of residence or the NFE’s formation documents do not permit any income or assets of the NFE 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 NFE’s charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property which the NFE has purchased; and
- the applicable laws of the NFE’s jurisdiction of residence or the NFE’s formation documents require that, upon the NFE’s liquidation or dissolution, all of its assets be distributed to a Governmental Entity or other non-profit organisation, or escheat to the government of the NFE’s jurisdiction of residence or any political subdivision.
Note: Certain entities (such as U.S. Territory NFFEs) may qualify for Active NFFE status under FATCA but not Active NFE status under the CRS.
A "Controlling Person" is a natural person who exercises control over an entity. Where an entity Account Holder is treated as a Passive Non-Financial Entity ("NFE") then a Financial Institution must determine whether such Controlling Persons are Reportable Persons.
In the case of a trust, the Controlling Person(s) are the settlor(s), the trustee(s), the protector(s) (if any), the beneficiary(ies) or class(es) of beneficiaries, or any other natural person(s) exercising ultimate effective control over the trust (including through a chain of control or ownership). Under the CRS the settlor(s), the trustee(s), the protector(s) (if any), and the beneficiary(ies) or class(es) of beneficiaries, are always treated as Controlling Persons of a trust, regardless of whether or not any of them exercises control over the activities of the trust.
The settlor(s) of a trust is an Entity then the CRS requires Financial Institutions to also identify the Controlling Persons of the settlor(s) and when required report them as Controlling Persons of the trust.
In the case of a legal arrangement other than a trust, “Controlling Person(s) means persons in equivalent or similar positions.
"Custodial Institution" means any Entity that holds, as a substantial portion of its business, Financial Assets for the account of others. This is where 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.
A legal person or a legal arrangement, such as a corporation, organisation, partnership, trust or foundation. This term covers any person other than an individual (i.e. a natural person).
"Financial Institution" means a "Custodial Institution", a "Depository Institution", an "Investment Entity", or a "Specified Insurance Company".
A "Non-Reporting Financial Institution" means any Financial Institution that is:
- a Governmental Entity, International Organisation or Central Bank, 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 Broad Participation Retirement Fund; a Narrow Participation Retirement Fund; a Pension Fund of a Governmental Entity, International Organisation or Central Bank; or a Qualified Credit Card Issuer;
- an Exempt Collective Investment Vehicle; or
- a Trustee-Documented Trust: a trust where the trustee of the trust is a Reporting Financial Institution and reports all information required to be reported with respect to all Reportable Accounts of the trust;
- any other defined in a countries domestic law as a Non-Reporting Financial Institution.
Participating Jurisdiction means a jurisdiction with which an agreement is in place pursuant to which it will provide the information set out in the CRS.
Participating Jurisdiction Financial Institution means any Financial Institution that is tax resident in a Participating Jurisdiction, but excludes any branch of that Financial Institution that is located outside of that jurisdiction, and any branch of a Financial Institution that is not tax resident in a Participating Jurisdiction, if that branch is located in such Participating Jurisdiction.
Passive NFE means any:
- NFE that is not an Active NFE; and
- Investment Entity located in a Non-Participating Jurisdiction and managed by another Financial Institution.
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% of the vote and value in an Entity.
"Reportable Account" means an account held by one or more Reportable Persons or by a Passive NFE with one or more Controlling Persons that is a Reportable Person.
Reportable Jurisdiction is a jurisdiction with which an obligation to provide financial account information is in place.
"Reportable Jurisdiction Person" is an Entity that is tax resident in a Reportable Jurisdiction(s) under the tax laws of such jurisdiction(s) - by reference to local laws in the country where the Entity is established, incorporated or managed. An Entity such as a partnership, limited liability partnership or similar legal arrangement that has no residence for tax purposes shall be treated as resident in the jurisdiction in which its place of effective management is situated. As such if an Entity certifies that it has no residence for tax purposes it should complete the form stating the address of its principal office.
Dual resident Entities may rely on the tiebreaker rules contained in tax conventions (if applicable) to determine their residence for tax purposes.
A "Reportable Person" is defined as a "Reportable Jurisdiction Person", other than:
- a corporation the stock of which is regularly traded on one or more established securities markets;
- any corporation that is a Related Entity of a corporation described in clause (i);
- a Governmental Entity;
- an International Organisation;
- a Central Bank; or
- a Financial Institution (except for an Investment Entity described in Sub Paragraph A(6) b) of the CRS that are not Participating Jurisdiction Financial Institutions. Instead, such Investment Entities are treated as Passive NFE's.)
Generally, an Entity will be resident for tax purposes in a jurisdiction if, under the laws of that jurisdiction (including tax conventions), it pays or should be paying tax therein by reason of his domicile, residence, place of management or incorporation, or any other criterion of a similar nature, and not only from sources in that jurisdiction. Dual resident Entities may rely on the tiebreaker rules contained in tax conventions (if applicable) to solve cases of double residence for determining their residence for tax purposes. An Entity such as a partnership, limited liability partnership or similar legal arrangement that has no residence for tax purposes shall be treated as resident in the jurisdiction in which its place of effective management is situated. A trust is treated as resident where one or more of its trustees is resident.
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. This also applies to Takaful Operator.
"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 individual or an Entity and used to identify the individual or Entity for the purposes of administering the tax laws of such jurisdiction.
Privacy Statement
PDPA 2010 is an Act, enacted by Parliament of Malaysia, to regulate the processing of personal data in commercial transactions.
The PDPA defines personal data as any information that a person provides during a commercial transaction. The information relates directly or indirectly to the person, who is identified or can be identified based on the information provided. Personal data includes a person’s name, address, IC number, passport number, email address and other contact details.
Sensitive personal data is information that relates to the physical or mental health or condition of an individual. It includes the person’s:
- political opinions;
- religious beliefs;
- any offence committed or allegedly committed; or
- any other personal data determined by the Minister as published in the Act.
Any business transactions which is not necessarily contractual. This includes the collection of personal data of potential customers.
It is the act of collecting, recording, holding or storing personal data and carrying out any operation or set of operations on the personal data.
You have the right:
- To access your personal data and to update the information. This is to make sure that the personal data is accurate, complete and up-to-date.
- To withdraw your consent of disclosing your personal data for marketing or any other purposes, other than for the purpose of service that you are subscribing for.
We cannot deny your request to have access to your data. We can only do so if we cannot confirm your identity.
We will only keep your personal data for as long as it is necessary to do so. This is so that we can use the data to process your request or to meet any legal, regulatory or internal requirements.
In some cases we may transfer your personal data to places outside of Malaysia. This is necessary to provide you the services that you require or in situations where we need to perform our contractual obligations.
We will not be able to process your application if you do not provide the mandatory data we require. In cases where you do not provide data that is considered voluntary, we will still process your application, but we may not be able to provide the full range of services that we offer.
Yes, you can do so by writing to us. Please send your letter to:
Customer Servicing Department,
Level 6, Wisma AIA,
99 Jalan Ampang,
50450 Kuala Lumpur.
You can request to access your personal data by calling our Care Line at 1300 88 1899 or by visiting any of our Customer Centres for assistance.
