Malta Signs FATCA IGA With US
by Jason Gorringe, Lowtax.net, London
18 December, 2013
Malta signed an intergovernmental agreement (IGA) with the United States on the implementation of the Foreign Account Tax Compliance Act (FATCA) on December 16, 2013.
The IGA, signed by Malta's Finance Minister Edward Scicluna and the US Ambassador Gina Abercombie-Winstanley, was negotiated on the basis of the Model 1 reciprocal agreement issued by the US, which will require financial institutions in both Malta and the US to submit the required information to their own tax authorities, which in turn will automatically share such information with the other tax authority.
The agreement is intended to reduce the administrative burden of complying with FATCA regulations for Malta's financial institutions, as well as to provide a mechanism for them to comply with their obligations without breaching Maltese data protection laws.
Abercrombie-Winstanley remarked at the signing ceremony that the IGA "marks a significant step forward in our countries' efforts to work collaboratively to combat offshore tax evasion – an objective that mutually benefits our two countries."
Scicluna noted that "the signal we are sending today by signing this agreement is that in the area of tax evasion it is deeds not words which matter. The OECD Global Forum 'Report on Transparency and Exchange of Information for Tax Purposes' has shown that Malta effectively is largely compliant, similar to the US, UK and Germany."
"Furthermore," he added, "the citizens of both countries will now realize that it is in their interest to comply with tax laws of their respective country. In this respect the soon to be launched Investment Registration Scheme is meant to give the opportunity to Maltese citizens to voluntarily comply and disclose their previously undeclared investments before the tax authority acts on the information received from abroad."
Malta's signing of an IGA with the US follows similar signings in the last few days of IGAs between the US and Jersey, Guernsey and the Isle of Man.
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