Personal scope of application As per 26 June 2022

Are there any deviations from the Directive in defining the intermediary?

2021/06/17

No, Maltese Law simply reworded the definition to reflect the drafting of Maltese laws.

How is an intermediary defined? Is there a differentiation between a corporate entity and an individual person?

2021/06/17

Same definition as Directive. Yes.

Can a corporate tax department (or its members) within a MNE or within a group of entities qualify as an intermediary?

2021/06/17

There is no direct guidance on this but one must note that in the absence or waiver by an intermediary to file, the taxpayer then does have an obligation to file.

How are the actions of designing, marketing, organizing, making available for implementation or managing the implementation of a tax arrangement defined?

2021/06/17

Same as Directive.

Have the legal preconditions regarding the territorial nexus for an intermediary been implemented in accordance with the Directive?

2021/06/17

Yes, same as the Directive.

Are there any other conditions apart from those of the Directive, such as the territorial nexus of a tax arrangement to a certain Member State, which trigger a reporting obligation of an intermediary (e.g. including intermediaries from outside the EU)?

2021/06/17

No, apart from the directive. To note that due to COVID-19 it is currently being debated that the deadline for reporting has been extended. Clearly there are also Money Laundering reporting obligations in terms of other provisions.

In which cases is the relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

Same as Directive.

Are there any other persons beside intermediaries or relevant taxpayers obliged to report?

2021/06/17

Reporting Malta Financial Institutions.

Are there any deviations from the Directive in defining the relevant taxpayer?

Mechanism to avoid multiple reporting

Which measures have been taken to avoid multiple reporting obligations referring to an intermediary obliged to report in several countries? Are there deviations from the Directive?

2021/06/17

Same as Directive.

Which measures have been taken to avoid multiple reporting obligations referring to more than one intermediary obliged to report? Are there deviations from the Directive?

2021/06/17

Same as Directive.

Which measures have been taken to avoid multiple reporting obligations referring to a relevant taxpayer obliged to report several countries? Are there deviations from the Directive?

2021/06/17

Same as Directive.

Which measures have been taken to avoid multiple reporting obligations referring to more than one relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

Same as Directive.

How does the National Tax Authority expect the conditions for exemption from filing a report to be met?

2021/06/17

Still to be determined. It is to be noted that the Law does not specify, simply says Provided that the proof may be in such form as the Commissioner may determine.

Material scope of application

Are national tax arrangements subject to reporting under the Directive?

2021/06/17

No.

Which taxes are affected? Are there deviations from the Directive?

2021/06/17

The same taxes as specified in the directive.

Does the hallmark catalogue deviate from the Directive? If yes, to what extent?

2021/06/17

Same as Directive.

Which hallmarks are linked with the main benefit test?

2021/06/17

Same as Directive.

How is the main benefit test defined?

2021/06/17

Same as Directive.

How is a tax advantage defined?

2021/06/17

Not defined, yet it would constitute a transaction that would affect one of the 4 hallmarks.

Are there any deviations from the Directive in defining a cross-border arrangement?

Is there a white list defining arrangements explicitly excluded from a reporting obligation? If yes, please provide details.

Are there any deviations from the Directive in defining associated enterprises?

Reporting process

When is a cross border arrangement made available for implementation (e.g. handover of contract documents)?

2021/06/17

Same as Directive.

When is a cross-border arrangement ready for implementation?

2021/06/17

Same as Directive.

When has the first step in the implementation of a cross-border arrangement been made?

2021/06/17

Same as Directive.

Which information should be included in the report? Are there deviations from the Directive?

2021/06/17

Same as Directive.

What does the reporting process look like? Are there deviations from the Directive?

2021/06/17

To date there is no template for a report. It is however believed that there will be no deviation from the directive.

Is the entire report to be provided by the intermediary/relevant taxpayer? Who must provide the report?

2021/06/17

The intermediary is to provide the report.

What are the respective deadlines for the intermediary and the relevant taxpayer to file the report? Are there deviations from the Directive in terms of filing the information within 30 days?

2021/06/17

No, same as the Directive.

Which numbers are assigned by local tax authorities to the cross-border arrangements?

2021/06/17

No information is available on this yet.

What is the reporting deadline for arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020?

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies between 1 July 2020 and 31 December 2020?

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies after 1 January 2021?

Penalties

In which cases are penalties imposed?

2021/06/17

1. Failure to Comply with a request for information made by the Commissioner in relation to a request made by a requesting authority; 2. Upon evidence being provided that failure to provide the relevant information is due to the person's failure to keep or properly update the information as required by Maltese law; 3. (a) Failure to comply with a request made by the Commissioner which persists for 6+ months from the date of original request; 3. (b) Refusal by the requested party to be served with notice (the requested party is the proper addressee); 3. (c) The information provided by the requested party is incorrect as it is either misleading, deceitful, or false; 33(1)(f) Reporting Malta Financial Institution relies on an invalid self-certification or has reason to believe that the certificate is invalid. Also, an account holder who provides false self-certification; 35(7) Refusal to be served with the notice, which notice is addressed to the relevant person; 44(1)(a) RMFI relies on self-certification and knows or has reason to know that it is invalid. Also, an account holder who provides false self-certification; 50(1) Failure to comply with the obligations established by the EU Administrative Cooperation Directive: (a) failure to retain the documentation for a minimum period of 5 years from the end of the year to which the information relates; (b) failure to report any information as required by the Sub. Leg; 50(2) Failure to report the information required to the Commissioner in a complete and accurate manner; 50(3) Failure to comply with a request for information by the Commissioner, even though it has the obligation to file said information

What are the penalties?

2021/06/17

For 1. (a) €1,000 for delayed submission of information as specified by the Commissioner;For 1. (b) €50 for every day in default not exceeding €19,250; For 2. €19,250; (3)(a) to (c) €5,000 < FINE < €30,000 and/or imprisonment for a period not exceeding 2 years; For 33(1)(f) €5,000; For 35(7) €5,000 < FINE < €30,000 and/or imprisonment for a period not exceeding 2 years; For 44(1)(a) €5,000; For 44(2) limited to RMFI director, manager, other principal officer (unless proves not aware and could not with reasonable diligence be aware of such act or omission and that he did everything in his power to prevent the act or omission) €10,000 < FINE < €30,000 and/or imprisonment for a period not exceeding 2 years; For 50(1)(a) €2,500; For 50(1)(b) €200, and €100 per day not exceeding €20,000; For 50(2) €200, and €100 per day not exceeding €20,000; For 50(3) €1,000, and €100 per day not exceeding €30,000.

Is a distinction made between penalties imposed on intermediaries/relevant taxpayers/other persons obliged to report?

2021/06/17

Yes, only in instances of false self-certification the penalty is imposed either on the RMFI or the account holder.

What are the penalties in case of redundant reports? A redundant report is a report, which was filed, although there is no obligation to file one.

2021/06/17

No specific mentioned, however, GDPR provisions may apply.

Do the penalties differ with regard to incomplete, incorrect, missing or late reports? Are there any gradations?

2021/06/17

See point 31 and 32.

Are arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 treated differently in the means of penalties?

Other aspects

Do already other reporting regimes on cross-border arrangements exist?

2021/06/17

No.

Are there any other special deviations from the Directive? 

2021/06/17

Nothing other than as stated above.

What is the name of the national Tax Authority responsible for DAC6?

Do any other obligations apart from reporting a reportable cross-border arrangement exist under the national DAC6 legislation? (i.e. indication of the arrangement in the tax return)

Professional privilege/secrecy

Who is primarily obliged to report? Is there a primary reporting obligation of the intermediary or the relevant taxpayer? Is there legal privilege and in how far has it been considered for allocating the reporting obligation?

2021/06/17

Intermediaries, and in the absence of or following a waiver of right by the intermediary, the taxpayer has the obligation to file. Intermediaries who are regulated by the Professional Secrecy Act have the right to waive the filing of information as long as the intermediary operates within the limits of the relevant national laws that define the respective profession.

Does the reporting obligation breach a legal professional privilege under national law?

2021/06/17

Yes, the intermediary whose profession is listed under the Professional Secrecy Act shall have the right to waive filing information on a reportable cross border arrangement where the reporting of such information would constitute an offense in terms of a specific provision of the Criminal Code. In the instance, the waiver that is opted as the intermediary shall notify with immediate effect (no later than 7 days from the time frames established to commence reporting) any other intermediary or, in the absence of another intermediary the relevant taxpayer of their reporting obligation. The waiver shall only apply if the intermediaries operate within the limits of the relevant national laws that define their professions. Additionally, in the instance that the intermediary opts to waive the reporting obligation, the same intermediary shall notify the Commissioner (on an annual basis) of the reportable cross-border arrangement for which the reporting had been waived onto another intermediary or the relevant taxpayer.

Does the national law make reference to professional privilege or professional secrecy?

What is the difference, as per the national law, between professional privilege and professional secrecy?

To which categories of intermediaries does the professional privilege or professional secrecy apply?

In the context of the reporting obligation, under which conditions are the intermediaries entitled/obliged to make use of professional privilege or professional secrecy?

In cases in which professional privilege or secrecy applies, please describe the procedure for notification.

Does the national law provide specific conditions to waive professional privilege or professional secrecy?

Paul Giglio
Partner