On 2 July 2015, the Inland Revenue Department (“IRD”) of Malta announced that the deadline for FATCA reporting has been extended to 31 July 2015 (Link). Maltese Financial Institutions are reminded that they are required to submit their reports, including nil reports, by this date. In addition, the Commissioner for Revenue published an updated version of the FATCA Guidelines (Link).
The IRD has recently published the updated Guidelines for the implementation of the FATCA Agreement and the FATCA regulations in Malta. This update was triggered by the need to have further clarification on the interpretation of the FATCA Agreement in the context of particular entities, business activities or financial accounts.
Initial observations of the amendedments with the most impact are highlighted briefly below:
- An update to the definition of “Holding Companies” and “Treasury Centres”;
- Clarification on the correct classification of trusts under the FATCA agreement (with reference to the Investment Entity and the Custodial Institution definitions);
- An update to the definition of Custodial Institution;
- Further explanation and clarification of what constitutes an Investment Entity and how particular Maltese companies may be classified as Passive non-financial foreign entities (NFFEs) subject to certain conditions;
- Clarification on nominee arrangements in relation to the concept of “Related Entity”;
- An update to the definition of Controlling Persons in the context of FATCA – this is of particular interest to those entities that have been classified as Passive NFFEs;
- Further updates on aggregation rules applicable and certain aspects of FATCA due diligence; and,
- Further guidance on the practicalities of FATCA Reporting in Malta.