A press release issued by the Ministry for Finance states that the Ministry would like to clarify certain inaccuracies contained in the article which appeared on the Times of Malta, 15th May 2018, entitled Final withholding tax changes ‘by stealth’.
- The amendments to the Income Tax Act giving powers to the Inland Revenue Department to get full access, from banks and investment service providers, regarding data on investment income of any particular tax payer, from banks and investment service providers, was passed in 2008.
- As from next year, the current legal requirement for banks and investment service providers, to pass on information to the tax authorities, regarding investment income whose tax is not deducted at source will be extended to investment income taxed at source.
- Recent EU regulatory obligations, such as Markets in Financial Instruments Directive (MiFID); the Savings Directive; Anti-Money Laundering directive (AMLD4); the Foreign Account Tax Compliance Act (FATCA); together with a number of exchange of information agreements, signed and ratified, between Malta and other jurisdictions, have committed the Inland Revenue Authorities to automatic exchange of information on investment income.
- Tax Authorities have an obligation to ensure that all the tax withheld by the banks and investment service providers is fully passed on to the authorities.
- The implementation of these changes has been discussed with the financial operators.
- Malta can maintain and enhance its international reputation in the area of combatting tax evasion and money laundering through effective actions as delineated in Malta’s AML and Action Plan.
The Government of Malta refutes that these changes were done by stealth, since they are the result of directives and commitments that the Ministry for Finance has been discussing and working on at various levels both in Brussels and Valletta.
The press release concludes by stating that in its report, the Times of Malta seems to be criticising Malta for taking a strong approach towards greater transparency and implementing European directives on anti-money laundering and other financial crimes.