The Commissioner for Inland Revenue Malta has recently issued the latest version of 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 latest version of these guidelines defines further the interpretation to Depository Institution and Investment Entity. Thus in the case of Depository Institution, Electronic Money Institutions [EMIs] regulated by the Financial Institutions Act (Chapter 376 of the Laws of Malta), which transposes the EU Electronic Money Directive (2009/110/EC) into local legislation, will not fall within the definition of Depository Institution for CRS purposes, since such deposits are not done in the ordinary course of a banking or similar business.
Similarly, Payment Service Providers [PSPs] regulated by the Financial Institutions Act, which transposes the EU Payment Services Directive (2007/64/EC), are not deposit-takers for the purposes of the CRD. Any funds received by Payment Institutions from payment service users, with a view to the provision of payment services, does not constitute deposit-taking. Consequently, PSPs shall not fall within the definition of Depository Institution, which requires deposits to be accepted in the ordinary course of a banking or similar business. In the case of EMIs and PSPs however, one would have to consider whether a PSP, which for instance holds money until clearance, or an EMI which is authorized to issue e-money and transfer this to third parties, could fall to be defined as a Custodial Institution. As a point of note, if merchant services payments simply flow through systems but were not retained in an account, then such payments are not to be considered as a Financial Account.
In terms of Regulation 45 of the Cooperation with Other Jurisdiction on Tax Matters Regulations, the list of Non-EU Reportable Jurisdictions now includes Australia, Colombia, Greenland, Liechtenstein, Mauritius, Montserrat, Saint Vincent and the Grenadine, Singapore and Switzerland. Today the total list of non- EU reportable jurisdictions amount to 24 countries. The list of jurisdictions with which Malta has an agreement in place pursuant to which it will provide information, also referred to as the ‘Participating Jurisdictions’ has included a further two more jurisdictions Saudi Arabia and Uruguay, bringing the total to 88 Participating Jurisdictions.
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