OECD on 16th october, published a list of over 20 CBI/RBI schemes which poses high risk for the CRS standards and Malta programs was included in the list.
The Finance Ministry of Malta today defended residency programmes introduced in Malta, saying that Malta’s listing in an OECD report is “a result of a misunderstanding” reported Malta Independent
In particular, the Ministry has clarified that “persons benefitting under the IIP and the MRVP do not automatically become resident for tax purposes in Malta nor are they granted any tax-related benefits once a person obtains citizenship/residence through such schemes”. For the purposes of the CRS, therefore, Malta Financial Institutions cannot conclude that an individual is tax resident in Malta, and consequently not disclose information, purely on the basis of such individual’s qualification under any of the Malta Programmes.
The determination of residence for tax purposes is a facts-based exercise; under the Maltese Income Tax Act, an individual would be considered resident for tax purposes in Malta depending on that person’s physical presence in Malta. Furthermore, an individual would become liable to taxation in Malta once such an individual becomes resident in Malta for tax purposes and is not given any beneficial tax treatment purely on the basis of qualification under any of the above-mentioned Malta Programmes. These factors do not seem to have been sufficiently considered in the analysis of the Malta Programmes.
The ministry maintained that the listing of the Malta Programmes can only be a result of a misunderstanding. The Ministry looks forward to further engagement with the OECD so that +a proper analysis is carried out and the Malta Programmes are removed from the stated category.
In an interview to TVM, Finance Minister Edward Scicluna said that the Government will be investigating why the OECD has left Malta on the list of 21 countries which in its opinion have citizenship programmes as well as taxation systems which may threaten the international fight against tax evasion.
He insisted that Malta has a transparent and automatic system of exchange of information for tax purposes as the OECD itself requires. He said that the report by the OECD is therefore incorrect.
“We have already told them that it is incorrect and now want to know why, after giving them a full explanation of why we should not be on that list, some countries such as Portugal and Switzerland have been removed, while Malta is still there. We want to know why the name of our country was left there.”
Parliamentary Secretary Julia Farrugia Portelli said … Malta has a transparent & automat system of info exchange for tax purposes as required by OECD.
#Malta shouldn’t be on #OECD list as decision was based on incorrect info which @Maltagov had already pointed out. Malta has a transparent & automat system of info exchange for tax purposes as required by OECD. Malta demands full explanation.@JosephMuscat_JM @edward_scicluna https://t.co/STYVIcjmhB
— Julia Farrugia Portelli (@JuliaFarrugia) October 18, 2018
OECD released a latest update saying the list is only for guidance and not a blacklist
17/10/2018 – Further to the press coverage following yesterday’s publication of the guidance for financial institutions on residence by investment (RBI) and citizenship by investment (CBI) schemes, the OECD would like to reiterate that the sole objective of the high-risk RBI/CBI schemes included in this guidance is to provide Financial Institutions with the right tools to identify account holders that may misuse RBI/CBI schemes to circumvent the Common Reporting Standard (CRS) and carry out enhanced CRS due diligence procedures, where appropriate. This guidance was issued as part of the OECD’s ongoing efforts to address any risks to the integrity of the CRS, including those arising from the possible misuse of RBI/CBI schemes.
