FATCA - Malta On The Way To Implementing Its IGA

Following the signature of the intergovernmental agreement ("IGA") between Malta and the US on the 16th December, 2013 whereby the latter agreed to implement Foreign Account Tax Compliance provisions (commonly known as FATCA) in Malta, the Inland Revenue Department ("IRD") has issued draft FATCA Regulations and Guidelines implementing the said intergovernmental agreement.

FATCA requires financial institutions outside the US to register with the IRS of the US and to pass information about their US customers to the US tax authorities, namely the Internal Revenue Service (IRS). A 30% withholding tax will be imposed on the US source income of any financial institution that fails to comply with FATCA.