Malta becomes Signatory to OECD’s Multilateral Agreement on Automatic Exchange of Tax Information
Affirming its commitment to tackling global tax evasion, Malta became a signatory to the Multilateral Agreement on The Automatic Exchange of Tax Information, taking the total number of member states and jurisdictions to fifty.
Setup under the aegis of the OECD, the tax standard has been designed to facilitate better sharing of information related to financial transactions of individuals and entities that have tax residence in a country other than the country of citizenship or formation.
Finance minister Edward Scicluna represented Malta and welcomed the agreement as a useful tool in hands of the authorities seeking to identify concealed or undeclared assets held by taxpayers in foreign countries. The Minister encouraged those with foreign undeclared assets to take advantage of schemes like the ongoing Malta Investment Registration Scheme to regularize tax issues without the risk of penal action. The Minister also encouraged other countries to join the framework to strengthen the information-sharing mechanism.
Along with other agreements like the EU Savings Directive, the FACTA with the USA, and Tax Information Exchange Agreement with other countries, this agreement will empower tax authorities in the country to seek and obtain details of undeclared assets of Maltese taxpayers in foreign countries.
A member of the Early Adopters Group of the Agreement, Malta has recognized the importance of coordinated global action and has accepted this mutually-acceptable standard facilitating automatic exchange of information related to individuals with tax residence in foreign countries.
The standard requires financial institutions in Malta to analyze existing accounts by 31st December 2014 and review tax residence of their customers from January 2016. The first instance of automatic exchange of information under the Standard will take place in September 2017. The automatic exchange will ensure Malta provides information related to Maltese citizens who are taxpayers in other countries automatically even as other countries receive information about their citizens from Malta.