Update_Misuse of Residence/Citizenship by Investment

On 19 April 2018 the OECD made an announcement to underline the importance of ensuring the integrity of the OECD/G20 Common Reporting Standard (CRS) and addressing any potential circumvention.

Over the last months, the OECD has been taking a set of actions to ensure that all taxpayers maintaining financial assets abroad are effectively reported under the CRS, including by:

  1. issuing new model disclosure rules that require lawyers, accountants, financial advisors, banks and other service providers to inform tax authorities of any schemes they put in place for their clients to avoid reporting under the CRS. The EU Member States have already agreed  to implement these rules as part of a wider directive on mandatory disclosures;
  2. reaching out to individual jurisdictions, including Malta, to make them aware of the risk of abuse of their CBI/RBI schemes and offer assistance in adopting mitigating measures; and
  3. establishing a list of high risk schemes in order to further raise awareness amongst stakeholders of the potential of such schemes to undermine the CRS due diligence and reporting requirements.

The OECD is expected to take further action on the matter in May at the meeting of experts from OECD and G20 countries in Paris focusing on the misuse of CBI/RBI schemes.

For further information, please refer to OECD webpage (http://www.oecd.org/tax/oecd-addresses-the-misuse-of-residence-citizenship-by-investment-schemes.htm).

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