Malta: CRS developments

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Malta: CRS developments

intl-updates-small.jpg
Salomone
Vella

Mark Galea Salomone

Donald Vella

The guidelines issued in relation to the implementation of EU Council Directive 2014/107/EU of December 9 2014 amending Directive 2011/16/EU as regards to mandatory automatic exchange of information in the field of taxation (DAC2) in Malta and the common reporting standard (CRS) were amended on April 7 2017. Specifically with respect to trusts, the Commissioner for Revenue has introduced clarifications to the guidelines, which the Inland Revenue Department (IRD) has deemed necessary for the purposes of a more correct application of the regulations.

By way of background, the qualification of a trust as a reportable Malta financial institution (RMFI) depends heavily on whether the trust is defined as an investment entity. A trust is deemed to be a RMFI if the trustee is Malta-resident, and it does not qualify as a non-reporting financial institution, that is, where the trustee is a RMFI and reports all information that is required to be reported with respect to all reportable accounts. Once classified as a RMFI, the trust or its trustee has an obligation to report to the IRD.

RMFIs are obliged to register with the IRD within 30 days following the date on which the entity was classified as a RMFI. The Commissioner for Revenue has also been vested with the power to require Maltese trustees to report on a yearly basis (from 2016) the following information on the trusts for which they act as trustee: (i) the name of the trust, (ii) the date of its creation, (iii) the date when it first had a trustee that was resident in Malta, and (iv) the date of its termination (where applicable). Failure of a trustee to register the trusts within 30 days of the lapse of the deadline for reporting will result in the trustee having an obligation to register all its trusts for the purposes of the regulations.

The updated guidelines have clarified that:

  • Consolidated reporting by trustees will only be supported through the upload of the CRS XML data file using the IRD Secure File Transfer Protocol (SFTP) server. Trustees that wish to use this service must apply to the Commissioner for Revenue;

  • With respect to investment entities managed by a professional corporate trustee, the CRS guidelines clarify that an entity that is dedicated to the investment, management or administration of the wealth of a limited number of shareholders or of related shareholders and is managed by a reporting financial institution that is duly registered for CRS purposes, is to not be considered an investment entity but a non-financial entity. The non-financial entity is to be classified as a passive non-financial entity in order to ensure proper disclosure for CRS purposes; and

  • Trusts that have no reportable accounts and trusts, which are deemed to be non-reporting financial institutions where the trustee itself is a RMFI, do not need to register with the Commissioner for Revenue for the purposes of CRS.

It is pertinent to note that any reporting to the IRD in terms of CRS would have needed to be done by June 30 2017.

Mark Galea Salomone (mark.galeasalomone@camilleripreziosi.com) and Donald Vella

(donald.vella@camilleripreziosi.com)

Camilleri Preziosi

Tel: +356 21238989

Website: www.camilleripreziosi.com

more across site & shared bottom lb ros

More from across our site

World Tax global head of research Jon Moore tells ITR how his team spots standout submissions, and gives early statistical insights into this year’s entries
Australia’s conservative opposition will repeal controversial tax agent reporting rules if elected in the country’s May general election
Shapley would be the fourth person to hold the job this year; in other news, UK tax advisory firm MHA raised fewer funds than expected from its London IPO
The US needs to be involved in pillar one for there to be more international acceptance of the project, Michael Masciangelo says
The UK regulator is investigating EY’s auditing of the national postal service as it relates to the high-profile Horizon scandal, which saw hundreds wrongfully convicted
The directive will extend cooperation and information exchange around pillar two, according to the Council of the EU
Audit engagement partner Christopher Voogd has also been hit with a £32,500 charge over the firm’s work with Stirling Water Seafield Finance
China’s largest overhaul of its tax administration system in 24 years, featuring enhanced enforcement powers, is underway, says Abe Zhao of FenXun Partners
However, the US president increased tariffs on imported Chinese goods to 125%; in other news, UK tax firm MHA expects to raise £102m from its London listing
A mere three firms accounted for more than 90% of top-up taxes paid, according to research from Deloitte
Gift this article