All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Malta: Inland Revenue department issues FATCA guidelines



Donald Vella

Mark Galea Salomone

On December 16 2013 Malta and the US signed an agreement to improve international tax compliance and to implement the Foreign Account Tax Compliance Act (FATCA) provisions. The FATCA agreement was incorporated into Maltese law by virtue of Legal Notice 78 of 2014. The Maltese Inland Revenue Department recently issued guidelines for the implementation of the FATCA agreement and the FATCA regulations in Malta providing insight into what is expected of Malta financial institutions to comply with FATCA. The FATCA regulations provide that the FATCA agreement and the FATCA regulations are to be interpreted in accordance with the FATCA guidelines, unless it is clear that the context requires otherwise.


Malta financial institutions need to register with the Maltese Commissioner for Revenue for FATCA purposes even if they are non-reporting financial institutions. Each Malta financial institution is also required to register with the US IRS and obtain a Global Intermediary Identification Number (GIIN). The FATCA guidelines exclude non-reporting Malta financial institutions, deemed-compliant Malta financial institutions and active and passive non-financial foreign entities from registering with the IRS. In the case of a financial institution with a local client base that has a reporting obligation due to it holding US reportable accounts, a GIIN will be required.

Compliance and reporting

Once the requisite procedure and due diligence, as detailed in the FATCA regulations and FATCA guidelines, is carried out and a Malta financial institution has identified reportable accounts, it must report certain information to the Commissioner of Revenue (for instance: name, address, US tax information number and account balance). It is important to note that where a reporting financial institution has no information to report, a nil return is still required.

The FATCA guidelines state that significant non-compliance may be determined from either an IRS or the Commissioner for Revenue's perspective. Examples provided include: (i) repeated failure to file a return or repeated late filing; (ii) ongoing or repeated failure to register, supply accurate information or establish appropriate due diligence processes; (iii) intentional provision of substantially incorrect information; or (iv) deliberate or negligent omission of required information.

The FATCA guidelines do not provide a concrete definition of "transactions and schemes" carried out by persons to avoid the obligations placed upon them by the FATCA regulations. It is however intended that the phrase will be interpreted widely and the effect of the anti-avoidance regulation is that the FATCA regulations will apply as if the transactions and schemes had not been entered into.

Should a Malta financial institution fail to comply and report, the mechanics of FATCA will come into play and a 30% withholding tax imposed on the US source income will apply. The FATCA guideline has provided much needed context to the FATCA regulations as the Inland Revenue Department continues to encourage Malta financial institutions to comply with FATCA.

Donald Vella ( and Mark Galea Salomone (

Camilleri Preziosi

Tel: +356 212 38989


more across site & bottom lb ros

More from across our site

The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.
Tax authorities and customs are failing multinationals by creating uncertainty with contradictory assessment and guidance, say in-house tax directors.
The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.
An OECD report reveals multinationals have continued to shift profits to low-tax jurisdictions, reinforcing the case for strong multilateral action in response.
The UK government announced plans to increase taxes on oil and gas profits, while the Irish government considers its next move on tax reform.
War and COVID have highlighted companies’ unpreparedness to deal with sudden geo-political changes, say TP specialists.
A source who has seen the draft law said it brings clarity on intangibles and other areas of TP including tax planning.
Tax consultants say companies must not ignore financial transactions in their TP policies as authorities, particularly in the UK, become more demanding.