The OECD has proposed new rules for the Automatic Exchange of Information in Tax Matters between tax authorities in participating jurisdictions, known as the Common Reporting Standard (‘CRS’).
The implementation is provided by the Directive 2011/16/EU on Administrative Cooperation in the field of Taxation (as amended by Council Directive 2014/107/EU).
The CRS, which applies in Malta from 1 January 2016, require Reporting Financial Institution including Maltese Funds and the Sub-Funds, to comply with the Maltese CRS obligations. Accordingly, in order to satisfy its CRS obligations, Maltese Funds and the Sub-Funds will be required to provide certain information to the Commissioner for Revenue regarding the tax residence of all new and existing investors and may, in some cases, require information in relation to the tax residence of the beneficial owners of the investors. The requirements under the CRS supplement the current obligations to identify and confirm the status of investors from a US tax perspective under the US Foreign Account Tax Compliance Act (“FATCA”). The Commissioner for Revenue will then share the appropriate information with the relevant tax authorities in participating jurisdictions.
The Malta CRS Guidelines have advised that, in respect of new investors, self-certifications must be obtained and validated at account opening stage or within 90 days of opening the account at the latest. The wording of the self-certifications should be sufficient for the investors to confirm they are tax resident in the particular jurisdiction. Consequently, Maltese Funds must update their applications forms and / or subscription documents to reflect the CRS. It is also recommend to update fund prospectuses in due course to reflect these new CRS issues. We are happy to assist you with the review, update, or preparation of your application forms to meet the CRS requirements.
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