Malta publishes tax guidelines for burgeoning QROPS industry

The Inland Revenue Department has published new guidelines for QROPS, clarifying the jurisdiction’s position in terms of its tax compliance.

Malta continues in its efforts to position itself as one of the pre-eminent jurisdictions for Qualifying Recognised Overseas Pensions Schemes
Malta continues in its efforts to position itself as one of the pre-eminent jurisdictions for Qualifying Recognised Overseas Pensions Schemes

The guidelines, which were published this week, come as Malta continues in its efforts to position itself as one of the pre-eminent jurisdictions for Qualifying Recognised Overseas Pensions Schemes in the wake of Britain's Revenue & Customs shake-up of the pension's rules earlier this year.

According to Bethell Codrington, global head at TMF International Pensions - which has a Malta-based QROPS, the new guidelines will create more work for trustees, but are part of the island's commitment to creating a transparent tax environment.

One of the most significant aspects of the new guidelines is a section which stipulates that beneficiaries of a Malta-based scheme will need to submit an annual tax return, regardless of where they are based.

For example, within the tax return, a client will have the opportunity to apply for a tax exemption if they are in a country with which Malta has a double tax agreement (DTA) - evidence of the residency will need to be supplied.

If the client happens to be in a country with which no DTA with Malta is in place, they may end up paying income tax, in which case a QROPS may not be the best course of action.

Codrington said the implication of these new guidelines will make tax evasion "almost impossible".

"The UK authorities, and advisers, want to see transparency when it comes to tax and this is what these new guidelines deliver," said Codrington.

 

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I think it is a good thing that the MFSA are making it known globally that Malta will have a strict QROPS regime unlike Guernsey history. I have written about it here http://www.iexpats.com/2012/08/malta-qrops-regulator-issue-another-tax-warning/ I believe that these announcements will help Malta to secure its future in this industry