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Malta: Malta's recent efforts towards effective exchange of information



Donald Vella

Kirsten Cassar

Malta signs IGA with the US

A fast-developing theme in international tax recently has been the exchange of tax information. It is clear that the US Foreign Account Tax Compliance Act (FATCA) has opened the eyes of jurisdictions all over the world to the potential benefits of information exchange. At the end of last year, Malta signed an intergovernmental agreement (IGA) with the US in an effort to improve international tax compliance and to implement FATCA. Other jurisdictions such as Germany, France, Spain and the UK have also become partner countries with the US to combat international tax evasion, demonstrating the growing global momentum behind FATCA.

The IGA negotiated and agreed between Malta and the US follows the Model 1 reciprocal version, meaning that Malta registered financial institutions will report specific information to the Maltese competent authority, which will then automatically exchange that information annually on a reciprocal basis. Thus, Maltese investment funds, banks and insurers may on this basis be exempted from US withholding tax on income received from US investments and from withholding tax on payments made to US shareholders or beneficial owners.

Now that the IGA between Malta and the US has been signed and implementation into local legislation has started, reporting Malta financial institutions should focus on the upcoming FATCA deadlines, mainly that in relation to registration with the IRS. An important upcoming deadline is July 1 2014, by which date reporting Malta financial institutions should implement the procedures required to comply with their FATCA related obligations.

Recent tax information exchange agreements efforts by Malta

A number of Malta's double tax treaties, including those with Barbados, South Africa, Singapore, Belgium and Luxembourg, have recently been renegotiated with a view to include OECD standard provisions relating to exchange of information. This means that the competent authorities of the relevant jurisdictions are obliged to exchange information as is foreseeably relevant for implementing treaty provisions or carrying out the administration or enforcement of domestic laws regarding taxes.

Furthermore, Malta has recently signed tax information exchange agreements with the Cayman Islands, Macao, Bahamas, Gibraltar and Bermuda. Such agreements include all standard means which aim to ensure due process is followed in tax information requests made to Malta and the other jurisdictions.

Clearly, exchange of information is a hot topic at the moment and the momentum is likely to continue to pick up during 2014. Along with the commencement of FATCA implementation, key events during this year also include the OECD having in February 2014 published a new single global standard for the automatic exchange of information between tax authorities. The standard calls on jurisdictions to obtain information from their financial institutions and exchange it automatically with other jurisdictions annually. This has been endorsed by the G20 finance ministers while more than 40 countries, including Malta, have committed to early adoption of the standard.

Donald Vella ( and Kirsten Cassar (

Camilleri Preziosi

Tel: +356 21238989


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