Guidelines for the implementation of the EU Council Directive 2014/107/EU of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (DAC2) in Malta and the Common Reporting Standard (CRS) issued in terms of Article 96(2) of the Income Tax Act (Chapter 123 of the Laws of Malta).

The first set of amendments made to the said DAC2 and CRS Guidelines was brought about by virtue of Version 1.2 of the Guidelines that was published on the 8th November 2016. Changes included amendments to the list of Non–EU Reportable Jurisdictions as well as the list of Participating Jurisdictions in terms of the Cooperation with Other Jurisdiction on Tax matters Regulation.

The second set of amendments was brought about by Version 1.3 of the Guidelines that were published on the 19th December 2016. Version 1.3 has brought about two main changes:

  1. The first being of particular relevance to trustees that qualify as RMFIs for CRS purposes, since RMFIs are no longer allowed to “align the scope of the beneficiaries of a trust reported as Controlling Persons of the trust with the scope of beneficiaries of a trust treated as Reportable Persons of a trust that is a MFI.” Therefore the difference in treatment of trusts that are MFIs as opposed to those that are NFEs, particularly in the context of discretionary beneficiaries, is very important since discretionary beneficiaries of an RFI are required to be treated as an Account Holder in the years in which they receive a distribution and discretionary beneficiaries of a NFE are required to be reported regardless of whether a distribution is received in a given year.
  2. The second amendment is of broader application in the sense that it relates to the transmission of information to the Commissioner for Revenue. The Guidelines now require reporting to be done using the XSD Schema issued by the OECD available here.

Further guidance has been introduced in the area of reporting.

Version 1.3 of the Guidelines can be found here.

Authors: Dr Anthony Cremona and Dr Abigail Galea.