No tax changes ‘by stealth’

The Malta Business Weekly - - FRONT PAGE -

The Min­istry for Fi­nance said in a state­ment that it would like to clar­ify cer­tain in­ac­cu­ra­cies con­tained in the ar­ti­cle which ap­peared on The Times of Malta of 15 May en­ti­tled Fi­nal with­hold­ing tax changes ‘by stealth’. 1. 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. 2. 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. 3. Re­cent EU reg­u­la­tory obli­ga­tions, such as Mar­kets in Fi­nan­cial In­stru­ments Di­rec­tive, the Sav­ings Di­rec­tive, Anti-Money Laun­der­ing di­rec­tive, the For­eign Ac­count Tax Com­pli­ance Act 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. 4. 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. 5. The im­ple­men­ta­tion of these changes has been

dis­cussed with the fi­nan­cial op­er­a­tors. 6. 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.

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