On behalf of their respective Governments, Minister for Finance Edward Scicluna and U.S Ambassador Gina Abercrombie –Winstanley signed the Foreign Account Tax Compliance Act (FATCA) on Monday, December 16, 2013.
The “FATCA Agreement” is a further development in the relations between Malta and the United States regarding exchange of information and is to be made with a view to improving international tax compliance through mutual assistance in tax matters based on an effective infrastructure for the automatic exchange of information.
Automatic exchange of information in relation to FATCA agreement essentially follows a bilateral approach. In view that attempts by the European Commission to adopt a common approach vis-à-vis EU Member States for FATCA did not succeed, Malta, like many other EU Member States negotiated separately with the US in order to conclude a FATCA agreement.
Through this Act the U.S and Malta will work together to detect, deter and discourage offshore tax abuses and build a stronger, more stable, and more accountable, global financial system.
Ambassador Gina Abercrombie –Winstanley remarked at the signing ceremony that FATCA is a further example of the deep and substantial links that positively bind the economies of Malta and the U.S. She said, “Today’s signing marks a significant step forward in our countries’ efforts to work collaboratively to combat offshore tax evasion – an objective that mutually benefits our two countries.”
Minister for Finance Prof. Scicluna stated that “The signal we are sending today by signing this agreement is that in the area of tax evasion it is deeds not words which matter. The OECD Global Forum ‘Report on Transparency and Exchange of Information for Tax Purposes’ has shown that Malta effectively is largely compliant, similar to the US, UK and Germany.
Furthermore, the citizens of both countries will now realise that it is in their interest to comply with tax laws of their respective country. In this respect the soon to be launched Investment Registration Scheme is meant to give the opportunity to Maltese citizens to voluntarily comply and disclose their previously undeclared investments before the tax authorities act on the information received from abroad.”