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Foreign Account Tax Compliance (FATCA)

The Foreign Account Tax Compliance provisions (commonly known as FATCA) contained in the HIRE Act 2010 are US legislation aimed at reducing tax evasion by citizens of the United States of America (US). It requires Financial Institutions outside the US to pass information about their US customers to the US tax authorities i.e. the Internal Revenue Service (IRS). A 30% withholding tax is imposed on the US source income of any Financial Institution that fails to comply with FATCA.

On 16th December, 2013 Malta and the US signed an agreement to implement FATCA in Malta (Agreement between the Government of the United States of America and the Government of the Republic of Malta to Improve International Tax Compliance and to Implement FATCA – incorporated into Maltese law through LN 78 of 2014 (the IGA)). Implementing regulations have also been enacted in LN 295 of 2011 (as amended).

In accordance with article 3(6) of the IGA, the Competent Authorities of Malta and of the US have entered into an arrangement in order to establish and prescribe the rules and procedures necessary to implement certain parts of the IGA. A copy of this Competent Authority Agreement is available by clicking here.

Guidelines in relation to the implementation of the Malta-US FATCA IGA are available by clicking here.

Any further queries not covered by these guidelines can be sent by email to itu.mfin@gov.mt

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