After HMRC’s recent changes to QROPS regulations, Malta has published a new set of guidelines to help secure the jurisdictions place as the QROPS location of choice.
London, UK (Pryce Warner International) July 31st, 2012 - The guidelines, published this week, come as Malta continues to secure position as the QROPS jurisdiction of choice in the wake of the recent HMRC changes to QROPS legislation.
The new guidelines will require more effort from trustees, but they are being justified as a means of creating a transparent tax jurisdiction that is doing all it can to stay within the guidelines provided by HMRC.
A key part of the new Malta guidelines is that trustees will have to submit an annual tax return, regardless of where they are based.
If the trustee can potentially apply for a tax exemption, as they are resident in a country with which Malta has a double taxation agreement, they will need to supply evidence of their residency in that country.
If they are resident in a country with which Malta does not have a double taxation agreement, the trustee will have to pay income tax in Malta. In such cases, QROPS may not be advisable.
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.
The guidance states:
- Beneficiaries of a Malta QROPS must register with the Malta income tax office and submit a tax return
- These returns must include details of any tax withheld at source or of a DTA with another country
- The member must include details of the DTA and evidence of tax residence in that country, for example, a tax residence certificate
- Any monies paid out by the QROPS must be in the form of retirement benefits
Malta’s top rate of tax is 35% but according to the Malta Association of Retirement Scheme Practitioners, high-net-worth individuals may be entitled to pay only 15%.
By Aneil Fatania
Pryce Warner International Group
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