Malta reporting frameworks and U.S. trust forms

Malta's CRS rules

The Common Reporting Standard is implemented in Malta through the European Union's DAC 2 framework, which requires automatic exchange of financial account information. CRS data is exchanged with OECD member jurisdictions where Malta has activated relations.^[3]

Financial institutions in Malta fall within the scope of the framework. Classification is the first step in determining their obligations. They then register for CRS and FATCA submissions through the MTCA process.^[3]

Registered financial institutions submit CRS reports through designated reporting channels and in the formats described by the MTCA. An annual self-compliance questionnaire applies to Malta financial institutions within CRS and FATCA scope.^[3]

FATCA agreement status

The U.S. Treasury table lists Malta's FATCA agreement as Model 1, with status In Force. Separately, Malta's tax administration describes its bilateral agreement with the United States as a Model 1A intergovernmental agreement that entered into force.^[3][4]

FATCA reporting can concern financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers have a substantial ownership interest. Foreign financial institutions can report directly to the IRS or follow intergovernmental agreements treated as in effect in their jurisdictions.^[4]

Trust registration in Malta

Trustees must register trusts for income tax purposes in specified cases involving at least one Malta-resident trustee. Certain additional registrations may be made at trustees' request.^[2]

Where a trust is registered for income tax purposes, the trustee must submit a return.

Professional trustees and other fiduciary service providers in Malta are licensed and regulated by the MFSA. Family trustees have a specific registration process.^[1]

U.S. person status and foreign trusts

The IRS defines a U.S. person to include a U.S. citizen or resident, among other categories. Information reporting can apply when a U.S. person transacts with a foreign trust, is treated as its owner under grantor trust rules, or receives trust distributions.^[6]

The IRS identifies four relevant information reporting channels: Forms 3520 and 3520-A, Form 8938, and FinCEN Form 114, known as FBAR. The applicable reporting depends on the person's relationship to the trust and the facts of each case.^[6]

Form 3520

The IRS says U.S. persons file Form 3520 to report certain transactions with foreign trusts and ownership under the grantor trust rules. They also report certain large gifts or bequests from foreign persons.

Form 3520-A

A U.S. owner of a foreign trust is responsible for the Form 3520-A filing, and completes Part II of Form 3520 for ownership reporting.

The IRS describes Form 3520-A as the foreign trust's annual information return when it has a U.S. owner. If the trust does not file it, the U.S. owner completes a substitute Form 3520-A and attaches it to Form 3520.^[6]

Form 8938 and FBAR

Form 8938, the Statement of Specified Foreign Financial Assets, and FinCEN Form 114, the Report of Foreign Bank and Financial Accounts, have separate reporting requirements. A U.S. person with a foreign trust connection may be required to file either or both forms, depending on the applicable reporting rules.^[6]

Reading the frameworks together

Maltese rules impose reporting obligations on financial institutions and registration duties on trustees or some beneficiaries. Separate U.S. information reporting requirements may apply to a U.S. person based on foreign trust ownership, transactions, or distributions.^[3][6]

Questions and answers

Related resources

Related glossary terms

• U.S. owner of a foreign trust: The Form 3520 instructions define a U.S. owner as a person treated as owning trust assets under grantor trust rules. Ownership can apply to part of a trust.
• Participating foreign financial institution: The IRS describes a participating foreign financial institution as an FFI that reports U.S. account holders who are specified U.S. persons under FATCA.
• U.S. beneficiary of a foreign trust: U.S. beneficiary status affects how foreign trust distributions and ownership are reported on Form 3520.

Related articles and guides

• Malta income tax treaty and FATCA status: The IRS treaty list includes Malta, and Treasury lists an in-force Model 1 agreement.
• Liechtenstein reporting and U.S. trust forms: Liechtenstein's FATCA information and trustee supervision, with the IRS reporting rules that apply to U.S. citizens who own a foreign trust in Liechtenstein.
• Guernsey reporting and U.S. foreign trust forms: Guernsey's information exchange and reporting frameworks, with the IRS rules that apply to U.S. citizens who own or benefit from a foreign trust there.

Tools and official documents

• IRS and FinCEN forms: reference pages: Reference pages for 15 IRS and FinCEN forms tied to foreign trusts, foreign accounts and entities, built from the official forms and their instructions.
• FATCA agreement lookup: Look up any jurisdiction in the U.S. Treasury FATCA table and see its agreement model and status as the Treasury lists them, with a link to the source.

Related pages

• Malta: overview: Start page for this jurisdiction.
• Trust legislation
• Types of trusts
• Trustee regulation and licensing
• Taxation of trusts