Implementing Guidelines on Automatic Exchange of Financial Account Information
On the 2nd of January 2020, the Commissioner for Revenue (“CfR”) published new Guidelines for FATCA and CRS. These Guidelines aim to facilitate the understanding of the rules relating to FATCA and CRS by merging the previous FATCA Guidelines and CRS Guidelines into one.
The changes to the Guidelines include:
A clarification on entity classification and reporting in respect of Cell Companies;
The elimination of the Holding and Treasury Company Financial Institution category in FATCA.
Clarification on Distributed Ledger Technology Assets to achieve a more aligned approach with that taken in the Guidelines issued by the CfR on this matter for tax purposes;
A more comprehensive detail on the local FATCA and CRS Registration, Modifications and Cancellation processes;
Alignment of the definition of Passive Income with that in the Income Tax Act;
Rules on Citizenship By Investment / Residence By Investment;
Changes in deadlines in relation to the “Excel Spreadsheet” Submissions;
More comprehensive guidance on the Completion of Data Elements for reporting purposes;
Updated information on Recalcitrant Accounts / Undocumented Accounts;
Updated rules as applicable to Trusts in respect to Registration and Reporting by the Trustee to the CfR and the removal of the reference to “professional trustee”.
We recommend that Maltese Financial Institutions review the new Guidelines in order to ensure that the FATCA and CRS compliance is being performed correctly and in line with the CfR’s latest practice and guidance.
XML Schema Reporting
FATCA and CRS reporting has now been in place for several years, however, when considering the context of ever increasing regulatory reporting requirements in general, compiling various reports can be rather challenging.
The new Guidelines clarify that Maltese Financial Institutions will no longer be able to use the Excel based alternative report without prior permission obtained from the CfR. For those Financial Institutions that are unable to obtain such permission, or in case a Financial Institution has more than 100 Reportable Accounts, the FATCA and CRS reporting will need to be undertaken by means of the XML Schema.
At PwC, we can help facilitate the FATCA and CRS reporting process with our PwC XML Schema Reporting Tool. This tool is especially designed to help with the population and testing of the information to be included in the FATCA and CRS reporting.
The PwC Automatic Exchange of Information Team can also assist you in compiling, collating and reviewing the necessary data in terms of the FATCA & CRS reporting Guidelines.
Key features of the PwC XML Schema Reporting Tool
Identification of any errors prior to submission to the CfR
A tool that supports all types of reportable accounts, including individuals, companies, trusts and foundations, and reporting for trustee sponsored trusts
Checks and deliverables are carried out to a consistent high standard in line with relevant guidelines
The tool assists with the decision making process vis-a-vis the reportable accounts being reported on
Flexibility to allow full control of the reportable data to be reported
What are the benefits of using the PwC XML Schema Reporting tool?
Ensures compliance with the FATCA & CRS Guidelines through early identification of errors which will avoid lengthy communication with the CfR and delays with meeting reporting obligations
Facilitates identification of errors in large data sets
Facilitates the submission of the data as per the requirements of the CfR
Flexibility - contained discretion as to the data to be reported, while having PwC’s full support for any clarifications required.
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