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Old Nov 5th 2017, 4:10 am   #1
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Default MM2H Tax Residency Status

I'm a retired British Citizen currently residing in Malaysia on an MM2H Visa. I spend more than 183 days per year here and have been continuously non-resident in the UK for about 12 years.

Recently I received a letter from a UK bank, where I still hold an account, to confirm where I am resident for tax purposes. This is being requested under the new Common Reporting System to which most countries have signed up to.

One section of the Tax Residency Self-Certification they have asked me to complete asks for a TIN (Tax Identification Number) for the country in which I'm resident. This is something I don't have because I don't pay tax here in Malaysia due to the fact I am retired.

Has anybody found themselves in the same situation and if so how did you resolve it? Is it necessary or even possible to 'register' yourself as resident for tax purposes in my situation?

I'd be very grateful if anyone could share their experiences or offer advice.
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Old Nov 5th 2017, 5:25 am   #2
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Default Re: MM2H Tax Residency Status

I'm in Bali and received the same document from my HSBC bank in UK where my UK OAP is deposited. I havent been resident UK since 1974 and not even visited in 25 years.

The form does allow to explain why you may not have a TIN under item B, as I recall. I complied by saying I'm resident Indonesia but the RI Govt. doesn't issue TIN to foreign retirees. I'm not sure if they will accept that but I'll wait and see.
The UK Gov't know I'm in Indonesia because I told them....thus they never increase my UK OAP for inflation...

This is a the Common Reporting system (CRS) for all banks/countries to track money-laundering. The only money-laundering I commit is when I forget to take some notes out of my pant pockets before dumping in the laundry basket ...therefore I wouldn't give them any more information than required.
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Old Nov 5th 2017, 3:29 pm   #3
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Default Re: MM2H Tax Residency Status

Normally in Malaysia your tax id is your passport number. at least if you are here with mm2h.
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Old Nov 5th 2017, 4:45 pm   #4
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Default Re: MM2H Tax Residency Status

We went to the Hasil office downtown George Town and registered to get Malaysian Tax ID numbers. There was a very basic form to fill out. I think foreigners need Malaysian Tax ID numbers for various reasons such as when they purchase property to pay Real Property Gains Tax, and to pay income tax if they own property that they rent out. And of course, you need it to give to foreign banks. We got a letter from the tax office a week later providing our Malaysian Tax ID numbers, and have given these numbers to foreign banks when requested.
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Old Nov 6th 2017, 7:13 am   #5
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Default Re: MM2H Tax Residency Status

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Originally Posted by montakute View Post
We went to the Hasil office downtown George Town and registered to get Malaysian Tax ID numbers. There was a very basic form to fill out. I think foreigners need Malaysian Tax ID numbers for various reasons such as when they purchase property to pay Real Property Gains Tax, and to pay income tax if they own property that they rent out. And of course, you need it to give to foreign banks. We got a letter from the tax office a week later providing our Malaysian Tax ID numbers, and have given these numbers to foreign banks when requested.
Thanks very much for the information montakute. It sounds like your experience is exactly the solution I'm looking for
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Old Nov 6th 2017, 8:29 am   #6
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Default Re: MM2H Tax Residency Status

Quote:
Originally Posted by balbykid View Post
I'm a retired British Citizen currently residing in Malaysia on an MM2H Visa. I spend more than 183 days per year here and have been continuously non-resident in the UK for about 12 years.

Recently I received a letter from a UK bank, where I still hold an account, to confirm where I am resident for tax purposes. This is being requested under the new Common Reporting System to which most countries have signed up to.

One section of the Tax Residency Self-Certification they have asked me to complete asks for a TIN (Tax Identification Number) for the country in which I'm resident. This is something I don't have because I don't pay tax here in Malaysia due to the fact I am retired.

Has anybody found themselves in the same situation and if so how did you resolve it? Is it necessary or even possible to 'register' yourself as resident for tax purposes in my situation?

I'd be very grateful if anyone could share their experiences or offer advice.
My understanding is that if you don't provide a TIN then the bank will simply inform the Malaysian tax authorities of any interest you have received. Since offshore income is not taxed in Malaysia this will probably end up in the bin.

So you can do as Davita or Montakute suggest depending on your preference. I'm not sure the TIN is your passport number though
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Old Nov 6th 2017, 11:29 am   #7
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Default Re: MM2H Tax Residency Status

So is it better to leave blank then ? I think its bloody nosey of the banks.
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Old Nov 6th 2017, 1:21 pm   #8
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Default Re: MM2H Tax Residency Status

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So is it better to leave blank then ? I think its bloody nosey of the banks.
It isn't the banks BB it's the government applying the international Common Reporting Standard (CRS)....which UK, Malaysia and many other countries have signed.

My document states...."If we don't receive a response, we'll use the information we already hold in our records to determine whether you may be liable for tax resident outside of UK."

The self-certification form did allow for reasons why a TIN may not be available. Maybe just me but, if retired and living off savings and investment, I'm cautious about opening a can of worms by applying for tax numbers from foreign countries....if not needed.
My thinking is the bank doesn't really care so long as it complies with the CRS requirement and, if asked by any country, they will just give out the information they have on file.

Last edited by Davita; Nov 6th 2017 at 1:28 pm.
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Old Nov 7th 2017, 9:06 am   #9
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Old Nov 8th 2017, 8:20 am   #10
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Default Re: MM2H Tax Residency Status

I encountered a few occasions where I was asked for my tax residency and for a tax identification number. I filled in Malaysia, but I don't have a Malaysian TIN. In one of the cases there was a tick box where I could indicate that no TIN was given to me. No follow up ensued.
In another case I left the section for the TIN open, and received a follow-up email question from the bank about it. To which I replied that I was not given a TIN. Response from bank: "we will store this reply together with the information you provided". That was the end of it, never heard of it again.
So until now have I not taken the trouble to get a Malaysian TIN, as no bank has really forced me to get one.
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Old Nov 10th 2017, 12:52 am   #11
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Default Re: MM2H Tax Residency Status

Check out how to get a tin here Pensions - escaping UK taxation
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