FATCA was introduced in 2010 for the purpose of global identification of U.S. tax payers owning financial assets with non-U.S. financial institutions through the disclosure of all worldwide. The legislation imposes an obligation on financial institutions to inform the IRS when any sums are paid to or for a US person. Accordingly, all entities which carry out certain investment activities would be considered as Financial Institutions for FATCA purposes and accordingly subject to FATCA compliance requirements, which requirements include a one-time online registration with the IRS and filing an annual FATCA return with the Maltese tax authorities. In case no US persons are involved in the structure one should simply be required to submit a nil return.
CRS, on the other hand, is aimed at combatting tax evasion by tax payers located in other jurisdictions, not the U.S. and provides for bilateral automatic exchange of information, built on the FATCA regime. The EU adopted CRS in the form of approved revision to the EU Directive 2014/107/EU. The Directive was adopted as law in Malta by virtue of LN 384 of 2015 entitled the Cooperation with Other Jursidiction on Tax Matters (Amendment) Regulations, 2015 and as per Article 96(2) of the Income Tax Act.
Fenlex may, with the advice provided by Fenech & Fenech Advocates, assist its clients to identify reporting obligations within the stipulated deadlines, and fill in all necessary forms and upload all necessary notifications for this purpose.