Maltese Investors Rush To Beat Tax Amnesty Deadline

by Robert Lee, Tax-News.com, London

29 March 2002

Banks and financial intermediaries in Malta have revealed that they have been overwhelmed by a surge of investors wanting to repatriate their investments before the March 31 deadline.

The Registration of Funds scheme launched recently by the Maltese government means that individuals who regularise their tax position vis-a-vis investments and assets held abroad before Sunday are only obliged to pay 3% tax on returning funds. This rises to 4% in April, and 5% after that. However, yesterday was, in effect, the last day that investors could take advantage of the scheme, as today is a public holiday, and banks are not open on Saturday.

Speaking to the Malta Business Weekly, sources from within the banking industry said that the initiative had been an overall success for the government, although they revealed that the majority of interested parties which have contacted them have wanted to register the funds now, and repatriate them at a later date.

Reasons given for this have included the perceived paucity of investment opportunities in Malta at the moment, and investments in long-term fixed deposits or bonds which can only be withdrawn on maturity.

However, many Maltese investors feel that the government should extend the deadline for taking advantage of the 3% tax rate.

Talking to the Malta Business Weekly, an unnamed investor argued that as the legislation was amended last month and only actually came into effect on March 5, investors have only been able to reap the full benefits of the Registration of Funds scheme for 23 days.

'I feel that it would be more than fair and a sign of goodwill on the government's part, that the 3% tax rate is extended for another couple of weeks,' he told the newspaper, adding that: 'Such a move would not only attract other investors who need some more time to think about the scheme but it would also put the government in a better light.'

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