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Deloitte Malta Tax Alert
On 4 December 2015, the Cooperation with Other Jurisdictions on Tax Matters Regulations Subsidiary Legislation 123.127 of the Laws of Malta (the ‘Regulations’), were amended through Legal Notice 384 of 2015. These amendments introduce rules and implementation measures relating to Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation as amended by EU Council Directive 2014/107/EU (the ‘EU Administrative Cooperation Directive’), implementing from 1 January 2016, the global standard for automatic exchange of financial account information in tax matters, as developed by the OECD and commonly known as Common Reporting Standard ('CRS'), into domestic legislation.
From a local perspective, the Regulations will require Malta Financial Institutions to register with the Commissioner for Revenue in such manner and within such period which shall be determined by means of guidelines that will be published on the website of the Inland Revenue Department.
Among the changes to the Regulations is the introduction of Annex 1, which outlines the reporting and due diligence rules that have to be applied by Reporting Malta Financial Institutions to automatically communicate the information required by the EU Administrative Cooperation Directive.
Certain penalties are contemplated when Reporting Malta Financial Institutions fail to comply with, inter alia, due diligence, data collection, retention and reporting obligations in accordance with the obligations set out in the EU Administrative Cooperation Directive.
Furthermore, the Regulations also provide that certain provisions thereof shall apply mutatis mutandis in relation to jurisdictions that are not EU member states but with which an arrangement is in place pursuant to which there is an obligation to provide the information to which the Regulations relate. These jurisdictions shall be identified in a list that shall be published on the website of the Inland Revenue Department.