The IRS wants to know who you are. If you receive US source
with-holdable payments or have a financial account with a Foreign
Financial Institution ("FFI"), the US Internal Revenue
Service ("IRS") really wants to identify and classify you
for the purpose of the Foreign Account Tax Compliance Act
Working in concert, the US Department of the Treasury has now
conscripted 114,764 FFIs and 112 foreign governments (as at
November 30, 2014) via Intergovernmental Agreements
("IGAs"), in addition to US Withholding Agents
("USWAs"), to find out if you are or might be a person of
interest, and require you to report your answer to the IRS.
These IGAs, classified as either Model 1 (under which FFIs
report via their domestic tax authorities) or Model 2
(with direct reporting to the IRS), are helping to propagate
FATCA's rapid global growth. An additional 8,117 FFIs from 118
other jurisdictions not subject to an IGA have also recognized that
it is in their best interests to register with the IRS and comply
with onerous FATCA customer due diligence, withholding and
Regardless of whether you are US or foreign, it will cost you
and your counterparties and financial institutions time and money
to document just who you are. If you fail to provide withholding
certificates and identification documentation in time, your
payor/financial institution is compelled to make a series of
unfavorable presumptions about your tax status. The presumptions
also apply if your payor/financial institution has "reason to
know" that documentation is "unreliable or
incorrect." These new international tax compliance rules are
designed to help the IRS clamp down on tax evasion by US taxpayers
in respect of their undisclosed or underreported foreign (
i.e. , non-US) assets.
Maltese tax law provides for rules which grant beneficiaries referred to as ‘Highly Qualified Persons' to be taxed at a reduced rate of tax of 15% on their employment income, provided certain conditions are satisfied.
Non-U.S. individuals making direct investments in the United States face a bewildering U.S. tax regime.
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