B 2532
L.N. 342 of 2019
INCOME TAX ACT
(CAP. 123)
INCOME TAX MANAGEMENT ACT
(CAP. 372)
Cooperation with Other Jurisdictions on Tax Matters 
(Amendment) Regulations, 2019
IN EXERCISE of the powers conferred by articles 76 and 96 of
the Income Tax Act and article 10A of the Income Tax Management
Act, the Minister for Finance has made the following regulations:-
Citation.
S.L. 123.1271. The title of these regulations  is the Coopera tion with Other
Jurisdictions on Tax Matters (Amendment) Regulations, 2019, and
these regulations shall be read and construed as one with theCooperation with Other Jurisdictions on Tax Matters Regulations,
hereinafter referred to as "t he principal regulations".
Amends 
regulation 2 of the principal 
regulations.2. In regulation 2 of the principal regulations, the definition
"EU Administrative Cooperation Directive" shall be substituted by
the following: 
" "EU Administrative Cooperation Directive" means
Council Directive 2011/16/EU of 15 February 2011 onadministrative cooperation in the field of taxation and repeali ng
Directive 77/799/EEC as amended by EU Council Directives
2014/107/EU, 2015/2376/EU, 2016/881/EU and 2018/822/
EU;".
Amends 
regulation 5 of the principal 
regulations. 3. Regulation 5 of the principal r egulations shall be amended
as follows:
(a) sub-regulation (6) thereof shall be substituted by the
following:
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(b) sub-regulation (7) thereof shall be substituted by the
following:
Substitutes 
regulation 6 of 
the principal regulations.4. Regulation 6 of the principal regulations shall be
substituted by the following:
"6. (1) Where there is failure to comply with a request
for information made by the Commissioner in relation to a
request made by a requesting authority under the provisions of
an arrangement, the req uested person shall be liable to a penal ty
of: 
(a) one thousand euro (€1,000) where the
information is submitted late, that is not within the time-
limit specified within the Commissioner’s request; and
(b) fifty euro (€50) for every day during which
the default existed:Cap. 123."(6) In order for the Commissioner to
access information, noti ce shall be served on a
person either personally or by being sent by
registered post to the last known business or
private address, or through electroniccommunication as prescribed through
guidelines published on the website of the
Commissioner for Revenue under the
provisions of article 96(2) of the Income Tax
Act."; and
S.L. 373.01
S.L. 386.19
S.L. 331.10"(7) For the purpose of the
implementation and enforcement of the laws
giving effect to the EU Administrative
Cooperation Directive and to ensure the
functioning of the administrative cooperation it
establishes, the Co mmissioner for Revenue
shall have access to the mechanisms,
procedures, documents and information
referred to in regulat ions 7 and 13 of the
Prevention of Money Laundering and Funding
of Terrorism Regulations, the Companies Act
(Register of Beneficia l Owners) Regulations,
and the Trusts and Trustees Act (Register of
Beneficial Owners)  Regulations.".
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Provided that the penalty under this
paragraph shall not exceed in total nineteen thousand, two
hundred and fifty euro (€19,250). 
(2) Notwithstanding the pr ovisions of sub-regulation
(1), where it is shown that the information is not provided
because such information has not  been kept or properly updated
as required under these regulations, the person who had the dut y
to keep or update such information shall be liable to a penalty  of
nineteen thousand, two hundred and fifty euro (€19,250).
(3) Notwithstanding any action that may be taken in
accordance with the provisions o f sub-regulations (1) or (2)
where - 
(a) failure to comply with a request made by the
Commissioner persists for more than six months from thedate of the original request; or
(b) the requested party refuses to be served with
the notice either personally or through registered mail ascontemplated in regulation 5( 6) and the requested party is
the proper addressee of the request; or
(c) the information submitted by the requested
p a r t y  i s  f o u n d  t o  b e  i n c o r r e c t  i n  s u c h  a  w a y  t h a t  i t  i s
misleading, deceitful or false,
the requested party shall be guilty of an offence and shall on
conviction be liable to a fine ( multa ) of not less than five
thousand euro (€5,000) and not more than thirty thousand euro
(€30,000), or to imprisonment for a period of not exceeding twoyears, or to both such fine ( multa ) and imprisonment.".
Amends 
regulation 13 of 
the principal 
regulations.5. Regulation 13 of the princ ipal regulations shall be
amended as follows:
(a) sub-regulations (7), (8), ( 9) and (10) there of shall be
re-numbered as sub-regulations (8), (9), (10) and (11)
respectively;
(b) immediately after sub-re gulation (6) thereof there
shall be added the following new sub-regulation:
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"Automatic 
exchange of 
information 
on reportable 
cross-border arrangements.(7) (a) Intermediaries shall file information
that is within their knowledge, possession
or control on reportable cross-border
arrangements with the Commissioner
within thirty (30) days beginning:
(i) on the day after the reportable
cross-border arrangement is made
available for implementation; or
(ii) on the day after the reportable
cross-border arrangement is ready for
implementation; or
(iii) when the first step in the
implementation of the reportable cross-border arrangement has been made,
whichever occurs first:
Provided that intermediaries referred to
in paragraph (b) of the definition"intermediary" shall also be required to file
information within thirty (30) days
beginning on the day after they provided,directly or by means of other persons, aid,
assistance or advice.
(b) In the case of marketable
arrangements, a periodic report shall be
m a d e  b y  t h e  i n t e r m e d i a r y  e v e r y  t h r e e  ( 3 )months, providing an update which
contains new reportable information as
referred to in sub-paragraphs (i), (iv), (vii)and (viii) of paragraph (o) that has become
available since the last report was filed.
(c) An intermediary is liable to file
information on reportable cross-border
arrangements with the Commissioner forRevenue in the following instances, taken
in the following order:
(i) the intermediary is resident in
Malta for tax purposes;
(ii) the intermediary is not
resident for tax purposes in any EU
Member State (including Malta) but has apermanent establishment in Malta
through which the services with respect
to the arrangement are provided;
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(iii) the intermediary is
incorporated in Malta or is governed by
the laws of Malta and the provisions of
sub-paragraphs (i) and (ii) do not apply;
(iv) the intermediary is registered
with a professional association related to
legal, taxation or consultancy servicesthat is established in Malta and sub-
paragraphs (i), (ii) and (iii) do not apply.
(d) Where information is to be filed
with the Commissioner and the same
information is to be filed with any other
competent authority of an EU Member
State, the intermediary shall be exemptfrom filing the information in Malta if it
has proof that the same information has
been filed in another EU Member State:
Provided that the proof may be in such
form as the Commissioner may determine.
Cap. 377.
Cap. 9(e) An intermediary whose profession is
referred to in article 3 of the Professional
Secrecy Act has the right to a waiver from
filing information on a reportable cross-
border arrangement where the reporting ofsuch information would constitute an
offence under article 257 of the Criminal
Code. In such circumstances, theintermediary must notify, without delay
and in any event no later than sevenworking days from the relevant dateestablished by paragraph (a), any other
intermediary or, if there is no such
intermediary, the relevant taxpayer of theirreporting obligations under sub-regulation
(6):
Provided that intermediaries may only
be entitled to a waiver under this paragraph
to the extent that they operate within thelimits of the relevant national laws that
define their professions:
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Provided further that where an
intermediary has waived such reporting
obligation, the intermediary shall provide
an annual update to the Commissioner,
consisting of a list of  the reportable cross-
border arrangements where the reporting
obligation has been waived on to another
intermediary or the re levant taxpayer. Such
information shall be in such form as the
Commissioner may determine.
(f) Where there is no intermediary or
the intermediary notifies the relevant
taxpayer or another intermediary of the
application of a waiver under paragraph
(e), the obligation to file information on areportable cross-borde r arrangement shall
lie with the other notified intermediary, or,if there is no such intermediary, with therelevant taxpayer.
(g) The relevant taxpayer with whom
the reporting obligation lies shall file the
information with the Commissioner within
thirty (30) days, beginning on:
(i) the day after the reportable
cross-border arrangement is madeavailable for implementation to that
relevant taxpayer, or
(ii) when it is ready for
implementation by the relevant taxpayer,
or
(iii) when the first step in its
implementation has been made inrelation to the relevant taxpayer,
whichever occurs first:
(h) A relevant taxpayer has an
obligation to file information on thereportable cross-borde r arrangement with
the Commissioner for Revenue, in thefollowing instances, taken in the followingorder:
(i) the relevant taxpayer is
resident in Malta  for tax purposes;
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(ii) the relevant taxpayer is not
resident for tax purposes in any EU
Member State (including Malta) but has a
permanent establishment in Malta
benefiting from the arrangement;
(iii) the relevant taxpayer receives
income or generates profits in Malta,although the relevant taxpayer is not
resident for tax purposes and has no
permanent establishment in any EU
Member State and the provisions of sub-
paragraphs (i) and (ii) do not apply;
(iv) the relevant taxpayer carries
on an activity in Ma lta, although the
relevant taxpayer is not resident for tax
purposes and has no permanent
establishment in any other EU MemberState and sub-paragraphs (i), (ii) and (iii)
do not apply.
(i) Where, pursuant to paragraph (g),
there is a multiple reporting obligation, the
relevant taxpayer shall be exempt fromfiling the information if it has proof that
the same information has been filed in
another EU Member State:
Provided that the proof may be in such
form as the Commissioner may determine.
(j) Where there is more than one
intermediary, the obligation to fileinformation on the re portable cross-border
arrangement shall lie with allintermediaries involved in the samereportable cross-border arrangement. An
intermediary shall be exempt from filing
the information only to the extent that ithas proof that the same information
referred to in paragraph (o) has already
been filed by another intermediary:
Provided that the proof may be in such
form as the Commissioner may determine.
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(k) (i) Where the reporting
obligation lies with the relevant
taxpayer and where there is more than
one relevant taxpayer, the relevant
taxpayer that is to file information inaccordance with paragraph (f) shall be
the one that features first in the list
below:
(A) the relevant taxpayer that
agreed the reportable cross-border
arrangement with the
intermediary;
(B) the relevant taxpayer that
manages the implementation ofthe arrangement.
(ii)  Any relevant taxpayer shall
only be exempt from filing the
information to the extent that it has
proof that the same informationreferred to in paragraph (o) has
already been filed by another relevant
taxpayer:
Provided that the proof may be in
such form as the Commissioner maydetermine.
(l) A relevant taxpayer shall file
information as the Commissioner may
determine, about the use of the
arrangement to the tax administration ineach of the years for which they use it.
(m)  Intermediaries and relevant
taxpayers shall file information on
reportable cross-border arrangements the
first step of which was implementedbetween 25th June 2018 and 1st July 2020.
Intermediaries and relevant taxpayers, asappropriate, shall file information on thosereportable cross-border arrangements by
31 August 2020.
(n) The competent authority in Malta
shall, by means of an automatic exchange,
communicate the information specified inparagraph (o) to the competent authorities
of all other EU Member States.
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(o) The information to be
communicated by the competent authority
in Malta pursuant to paragraph (n) shall
contain the following, as applicable:
(i) the identification of
intermediaries and re levant taxpayers,
including their name, date and place of
birth (in the case of an individual),
residence for tax purposes, TIN and,
where appropriate, the persons that are
associated enterprises to the relevant
taxpayer;
(ii) details of the hallmarks set
out in Annex IV that make the cross-border arrangement reportable;
(iii) a summary of the content of
the reportable cross- border arrangement,
including a reference to the name bywhich it is commonly known, if any, anda description in abstract terms of the
relevant business activities or
arrangements, without leading to thedisclosure of a commercial, industrial or
professional secret or of a commercial
process, or of information the disclosureof which would be contrary to public
policy;
(iv) the date on which the first
step in implementi ng the reportable
cross-border arrangement has been made
or will be made;
(v) details of the national
provisions that form the basis of the
reportable cross-border arrangement;
(vi) the value of the reportable
cross-border arrangement;
(vii) the identification of the EU
Member State of the relevant taxpayer(s)
and any other EU Member States which
are likely to be concerned by the
reportable cross-border arrangement;
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(c) immediately after paragraph (d) of sub-regulation
(8) thereof, as re-numbered, there shall be added the following
new paragraph: 
"(e) for the information laid down in sub-
regulation (7), within one month of the end of the quarterin which the information was filed. The first information
shall be communica ted by 31 October 2020."; and
(d) sub-regulation (9) thereof, as re-numbered, shall be
amended as follows:
(i) the definition "automatic exchange of
information" shall be substituted by the following:
" "automatic excha nge of information"
means:
(a) for the purposes of sub-
regulations (1), (3), (4) and (7), thesystematic communication of pre-defined
information to another EU Member State,without prior request, at pre-established
regular intervals. For the purposes of sub-
regulation (1), reference to availableinformation relates to information in the tax
files of Malta, which is retrievable in
accordance with the procedures for gatheringand processing infor mation in Malta;
(b) for the purposes of sub-(viii) the identification of any other
person in an EU Member State likely tobe affected by the reportable cross-border
arrangement, indicating to which EU
Member States such person is linked:
Provided that information as defined
under sub-paragraphs (i), (iii) and (viii)shall not be communicated to the European
Commission.
Cap. 372.(p) The fact that the Commissioner does
not trigger an enquiry in relation to a
reportable cross-borde r arrangement shall
not in any way affect any of the powers ofthe Commissioner under the provisions ofthe Income Tax Management Act.
VERŻJONI ELETTRONIKA
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regulation (2), the systematic communication
of pre-defined information on residents in
other EU Member States to the relevant EUMember State of residence, without prior
request, at pre-establis hed regular intervals;
(c) for the purposes of the
provisions of these  regulations that
implement the EU Administrative
Cooperation Directive, other than sub-
regulations (1), (2), (3), (4) and (7), the
systematic communication of predefinedinformation provided in paragraphs (a) and
(b);";
(ii) the following new definitions shall be added
immediately after the definition of "advance pricingarrangement":
" "arrangement" shall also include a series of
arrangements. An arrange ment may comprise more
than one step or part;
"cross-border arrangement" means an
arrangement concerning either more than one EUMember State or an EU Member State and a third
country where at least one of the followingconditions is met:
(a) not all of the participants in the
arrangement are resident for tax purposes inthe same jurisdiction;
(b) one or more of the participants in
the arrangement is simultaneously residentfor tax purposes in more than one
jurisdiction;
(c) one or more of the participants in
the arrangement carries on a business inanother jurisdiction through a permanent
establishment situated in that jurisdiction andthe arrangement forms part or the whole of
the business of that pe rmanent establishment;
(d) one or more of the participants in
the arrangement carries on an activity in
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another jurisdiction without being resident
for tax purposes or creating a permanent
establishment situated in that jurisdiction;
(e) such arrangement has a possible
impact on the automatic exchange ofinformation or the ident ification of beneficial
ownership;
"reportable cross-borde r arrangement" means
any cross-border arrangement  that contains at least
one of the hallmarks set out in Annex IV;
"hallmark" means a char acteristic or feature
of a cross-border arrange ment that presents an
indication of a potential risk of tax avoidance, aslisted in Annex IV;
"intermediary" means any person:
(a) that designs, markets, organises
or makes available for implementation ormanages the implementation of a reportable
cross-border arrangement;
(b) that, having regard to the
relevant facts and circumstances and basedon available information and the relevant
expertise and understanding required toprovide such services, knows or could be
reasonably expected to know that they have
undertaken to provide, directly or by means
of other persons, aid, assistance or advice
with respect to designing, marketing,
organising, making available forimplementation or managing the
implementation of a reportable cross-border
arrangement:
Provided that any person shall have
the right to provide evidence that such persondid not know and could not reasonably beexpected to know that that person was
involved in a reportable cross-border
arrangement. For this purpose, that person
may refer to all relevant facts and
circumstances as well as available
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information and their relevant expertise and
understanding.
In addition to the above, in order to be an
intermediary, a person shal l meet at least one of the
following additional conditions:
(a) be resident for  tax purposes in an
EU Member State;
(b) have a permanent establishment
in an EU Member State through which theservices with respect to the arrangement are
provided;
(c) be incorporated in, or governed
by the laws of an EU Member State;
(d) be registered with a professional
association related to legal, taxation or
consultancy services in an EU Member State. 
"relevant taxpayer" mean s any person to whom a
reportable cross-border arrange ment is made available for
implementation, or who is ready to implement a reportable
cross-border arrangement or has implemented the first step
of such an arrangement.
For the purposes of sub-regulation (7), "associated
enterprise" means a person who is related to anotherperson in at least one of the following ways:
(a) a person participates in the
management of another person by being in aposition to exercise a significant influence
over the other person;
(b) a person participates in the
control of another person through a holdingthat exceeds 25% of the voting rights;
(c) a person participates in the
capital of another person through a right ofownership that, directly  or indirectly, exceeds
25% of the capital;
(d) a person is entitled to 25% or
more of the profits of another person:
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Provided that: 
(i) if more than one person
participates, as referred to in paragraphs (a)
to (d), in the management, control, capital or
profits of the same person, all persons
concerned shall be reg arded as associated
enterprises;
(ii) if the same persons participate,
as referred to in paragraphs (a) to (d), in themanagement, control, capital or profits of
more than one person, all persons concernedshall be regarded as a ssociated enterprises;
(iii) for the purposes of this
definition, a person who acts together withanother person in respect of the voting rights
or capital ownership of an entity shall be
treated as holding a participation in all of thevoting rights or capital ownership of that
entity that are held by the other person;
(iv) in indirect participations, the
fulfilment of requirements under paragraph(c) shall be determined by multiplying the
rates of holding through the successive tiers.A person holding more than 50% of the
voting rights shall be deemed to hold 100%;
(v) an individual, his or her spouse
and his or her lineal ascendants ordescendants shall be treated as a single
person; 
"marketable arrangement" means a cross-border
arrangement that is designed, marketed, ready forimplementation or made available for implementationwithout a need to be subs tantially customised;
"bespoke arrangement" means any cross-border
arrangement that is  not a marketable arrangement."; and
(e) immediately after paragraph (d) of sub-regulation
(10) thereof, as re-numbered, there shall be added the followin g
new paragraph:
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"(e) the provisions of sub-regulations (7) and
(8)(e) shall be on 1 July 2020.".
Substitutes 
regulation 21 of the principal 
regulations.6. Regulation 21 of the princ ipal regulations shall be
substituted by the following:
"Data 
protection.
Cap. 586.21. (1) All exchange of information
made pursuant to these regulations involving
the processing of personal data shall be
conducted in accordance with Regulation (EU)2016/679 (General Data Pr otection Regulation)
and the Data Protection Act. Nevertheless, byapplication of Article 23(1)(e) of Regulation(EU) 2016/679, Articles 12 to 22 and Article
34, as well as Article 5, in so far as its
provisions correspond to the rights andobligations provided for in Articles 12 to 22,
shall not apply, as the provision of information
under this regulation constitutes a necessarymeasure in the interes t of taxation matters.
Cap. 586.(2) Reporting Malta Financial
Institutions and the competent authority in
Malta shall be data cont rollers for the purpose
of Regulation (EU) 2016/679 and the Data
Protection Act.
Cap. 586.(3) Notwithstanding the provisions of
sub-regulation (1), the Commissioner shall
ensure that each Reporting Malta Financial
Institution informs each individual reportableperson concerned that t he information relating
to him referred to in regulation 13(2) will becollected and transferred in accordance withthese regulations. The Commissioner shall also
ensure that the Reporting Malta Financial
Institution provides to  that individual all
information he is entitled to under theRegulation (EU) 2016/679 and the DataProtection Act in sufficient time for the
individual to exercise his data protection rights
and, in any case, before the Reporting MaltaFinancial Institution concerned reports the
information referred to in regulation 13(2) to
the competent authority in Malta.
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Amends 
regulation 22 of 
the principal 
regulations.7. Immediately after sub-regulat ion (5) of regulation 22 of
the principal regulations there shall be added the following ne w sub-
regulation:
"(6) A standard form, including the linguistic
arrangements, shall be adopted by the EU Commission in
accordance with the procedure refe rred to in Article 26(2) of t he
EU Administrative Cooperation Directive before 30 June 2019.
The automatic exchange of information on reportable cross-
border arrangements pursuant to regulation 13(7) shall be
carried out using this standard f orm. This standard form shall
not exceed the components for exchange of the information
listed in regulation 13(7)(o) and other relating fields linked to
these components which are necessary to achieve the objectives
of regulation 13(7).".
Amends 
regulation 33 of 
the principal 
regulations.8. Regulation 33 of the principal regulations shall be
amended as follows:
 (a) immediately after paragraph (e) of sub-regulation
(1) thereof there shall be added the following new paragraph:
"(f) where a Reporting Malt a Financial Institution
relies on an invalid self-cer tification, and such Reporting
Malta Financial Institution knows or has reason to know
that this is invalid, to a penalty of five thousand euro
(€5,000). An account holder who provides a false self-
certification, including signing or otherwise positivelyaffirming a false self-certification, shall also be liable to a
penalty of five thousand euro (€5,000)."; and
(b) sub-regulation (2) thereof shall be substituted by the
following:
"(2) In addition and without prejudice to any
penalties incurred in terms of sub-article (1), where a
Reporting Malta Financial Institution is found to have
submitted information that is misleading, deceitful or false,
every director, manager or other principal officer of such
Reporting Malta Financial Insti tution shall be guilty of an(4) Information processed in
accordance with these regulations shall beretained for no longer than necessary to achieve
the purposes of these regulations, and in any
case no longer than nine years from the end ofthe year from when the information was
reported to the Commissioner.".
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offence and shall on conviction be liable to a fine ( multa)
of not less than ten thousand euro (€10,000) and not more
than thirty thousand euro (€30,000), or to imprisonmentfor a period of not exceeding two years, or both such fine
(multa ) and imprisonment:
Provided that a director, manager or other principal
officer of such Reporting Malta Financial Institution shall
not be guilty of such an offence in virtue of this sub-regulation if he proves that he was unaware and could not
with reasonable diligence be aware of such act or omission
and that he did everything within his power to prevent thatact or omission.".
Amends 
regulation 35 of 
the principal regulations.9. Regulation 35 of the princ ipal regulations shall be
amended as follows:
(a) sub-regulation (1) thereof shall be substituted by the
following:
"(1) Where a person comes within the scope of the
penalties as set out in these regulations, the Commissioner
shall advise such person by means of a default notice
regarding which penalty the Commissioner intends toimpose and the reason for its imposition:
Provided that in such cases, reference to the
specific legal provision would constitute sufficientnotice.";
(b) immediately after sub-regulation (1) thereof, as
substituted, there shall be a dded the following new sub-
regulation:
"(1A) The default notice referred to in sub-
regulation (1) shall inform the defaulter of his rights and
provide a remedy to the defaulter to contest the existence
of the default within ten days from the date of suchnotice."; 
(c) in sub-regulation (2) thereof, for the words "to its
registered office informing it of its rights under the provisio ns
of sub-regulation (3)" there shall  be substituted the words "to
the last known business or private address";
(d) immediately after sub-re gulation (4) thereof there
shall be added the following new sub-regulation:
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"(4A) The demand notice referred to in sub-
regulation (4) may be served on the relevant person either
personally or by being sent by registered post to the last
known business or private address."; and
(e) immediately after sub-regulation (6) thereof there
shall be added the follo wing new sub-regulation:
"(7) Where the relevant person refuses to be
served with the notice either personally or through
registered mail as contemplated in sub-regulations (2) and
(4A) and the notice is properly addressed to the relevant
person, the relevant person sh all be guilty of an offence
and shall on conviction be liable to a fine ( multa ) of not
less than five thousand euro (€5,000) and not more thanthirty thousand euro (€30,000), or to imprisonment for aperiod not exceeding two years, or to both such fine
(multa ) and imprisonment.".
Amends 
regulation 44 of 
the principal 
regulations.10. Regulation 44 of the principal regulations shall be
amended as follows:
(a) paragraph (a) of sub-regul ation (1) thereof shall be
substituted by the following:
"(a) where a Reporting Malt a Financial Institution
relies on an invalid self-cer tification, and such Reporting
Malta Financial Institution knows or has reason to know
that this is invalid, to a penalty of five thousand euro
(€5,000). An account holder who provides a false self-
certification, including signing or otherwise positivelyaffirming a false self-certification, shall also be liable to a
penalty of five thousand euro (€5,000);"; and
(b) sub-regulation (2) thereof shall be substituted by the
following:
"(2) In addition, and without prejudice to any
penalties incurred in terms of sub-regulation (1), where a
Reporting Malta Financial Institution is found to have
submitted information that is misleading, deceitful or false,
every director, manager or other principal officer of such
Reporting Malta Financial Insti tution shall be guilty of an
offence and shall on convict ion be liable to a fine ( multa )
of not less than ten thousand euro (€10,000) and not morethan thirty thousand euro (€30,000), or to imprisonment
for a period of not exceeding two years, or both such fine
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(multa ) and imprisonment:
Provided that a director, manager or other principal
officer of such Reporting Malta Financial Institution shall
not be guilty of such an offence in virtue of this sub-
regulation if he proves that he was unaware and could not
with reasonable diligence be aware of such act or omissionand that he did everything within his power to prevent that
act or omission.".
Adds new 
regulation to the principal 
regulations.11. Immediately after regulation 49 of the principal
regulations there shall be added the following regulation:
"Imposition 
of penalties.50. (1) Where an intermediary or
relevant taxpayer that has an obligation to file
information with the Commissioner fails to
comply with any of the obligations set out inthe EU Administrative Cooperation Directive,
it shall be liable to the following penalties:
(a) where such intermediary or
relevant taxpayer fails to retain the
documentation and information itcollected in the course of meeting its
reporting obligations as provided in
these regulations for a minimum periodof five years starting from the end of the
year to which the information relates, to
a penalty of two thousand five hundredeuro (€2,500);
(b) where such intermediary or
relevant taxpayer fails to report any of
the information required to be reported
in terms of regulation 13(7) within the
time stipulated the rein, to a penalty of:
(i) two hundred euro
(€200); and
(ii) one hundred euro
(€100) for every day during which
the default existed: provided thatthis penalty shall not exceed in total
twenty thousand euro (€20,000).
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Amends Annex 
I to the principal regulations.12. Section VIII of Annex I to the  principal regulations shall
be amended as follows:
(a) sub-paragraph C(17)(a) thereof shall be substituted
by the following:
"(a) a retirement or pension account that satisfies
the following requirements:
(i) the account is subject to regulation as a
personal retirement account or is part of a
registered or regulated retirement or pension plan
for the provision of retirement or pension benefits
(including disability or death benefits);
(ii) the account is tax-favoured (that is,
contributions to the account that would otherwisebe subject to tax are deductible or excluded from(2) Where an intermediary or relevant
taxpayer that has an obligation to fileinformation with the Commissioner fails to
report the information required to be reported
in terms of regulation 13(7) in a complete and
accurate manner, it shall be liable to a penalty
of:
(a) two hundred euro (€200);
and
(b) one hundred euro (€100) for
every day during which the default
existed: provided that this penalty shall
not exceed in total twenty thousand euro
(€20,000).
(3) Where an intermediary or relevant
taxpayer that has an obligation to fileinformation with the Commissioner fails to
comply with a request for information made by
the Commissioner, it shall be liable to a penaltyof:
(a) one thousand euro (€1,000);
and
(b) one hundred euro (€100) for
every day during which the default
existed: provided that this penalty shall
not exceed in total thirty thousand euro(€30,000).".
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B 2552
the gross income of the A ccount Holder or taxed at
a reduced rate, or taxation of investment income
from the account is deferred or taxed at a reducedrate);
(iii) information reporting is required to the
tax authorities with respect to the account;
(iv) withdrawals are conditioned on
reaching a specified retir ement age, disability, or
death, or penalties apply to withdrawals made
before such specified events; and
(v) either (i) annual contributions are
limited to an amount denominated in Euro thatcorresponds to USD 50 000 or l ess; or (ii) there is a
maximum lifetime contribution limit to the account
of an amount denominated in Euro that
corresponds to USD 1 000 000 or less, in each case
applying the rules set forth in paragraph C of
Section VII for account  aggregation currency
translation.
A Financial Account that otherwise satisfies the
requirement of sub-paragraph C(17)(a)(v) will not fail to
satisfy such requirement solely because such FinancialAccount may receive assets o r funds transferred from one
or more Financial Accounts that meet the requirements of
sub-paragraph C(17)(a) or (b) or from one or more
retirement or pension funds t hat meet the requirements of
any of sub-paragraphs B(5) to (7);"; and
(b) paragraph D(5) thereof shall be substituted by the
following:
"5. The term "Controlling Persons" means the
natural persons who exercise control over an entity. In the
case of a trust, that term means the settlor(s), the trustee(s) ,
the protector(s) (if any), the be neficiary(ies) or class(es) of
beneficiaries, and any other natural person(s) exercisingultimate effective control over the trust, and in the case of
a legal arrangement other than a trust, such term means
persons in equivalent or similar positions.
The term "Controlling Persons" must be interpreted
in a manner consistent with the definition of "Beneficial
Owner" contained in regulation 2 of the Regulations as
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B 2553
well as that contained in regulation 2 of the Prevention of
Money Laundering and Funding of Terrorism Regulations
(S.L. 373.01), and the level of control must also bedetermined in line with such definitions.".
Adds new 
Annex to the 
principal 
regulations.13. Immediately after Annex III o f the principal regulations
there shall be added the following new Annex:
"Annex IV
HALLMARKS
In the context of Annex IV , any capitalised term shall have the
meaning that it has under the corresponding definitions set out  i n
Annex I of these Regulations. 
Part I. Main benefit test 
Generic hallmarks under cate gory A and specific hallmarks
under category B and under sub-paragraphs (b)(i), (c) and (d) o f
paragraph 1 of category C may only be taken into account where they
fulfil the "main benefit test". 
That test will be satisfied if i t can be established that the m ain
benefit or one of the main benef its which, having regard to all
relevant facts and circumstances,  a person may reasonably expec t to
derive from an arrangement, is the obtaining of a tax advantage .
In the context of hallmark under paragraph 1 of category C, the
presence of conditions set out in sub-paragraphs (b)(i), (c) or  (d) of
paragraph 1 of category C cannot alone be a reason for concludi ng
that an arrangement satisfi es the main benefit test. 
Part II. Categories of hallmarks 
A. Generic hallmarks linke d to the main benefit test 
1. An arrangement where the relevant taxpayer or a
participant in the arrangement undertakes to comply with a cond ition
of confidentiality which may require them not to disclose how t he
arrangement could secure a tax  advantage vis-à-vis other
intermediaries or t he tax authorities.
2. An arrangement where the i ntermediary is entitled to
receive a fee (or interest, remuneration for finance costs and other
charges) for the arrangement a nd that fee is fixed by reference  to:
(a) the amount of the tax a dvantage derived from the
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B 2554
arrangement; or
(b) whether or not a tax advantage is actually derived
from the arrangement. This would include an obligation on the
intermediary to partially or fully refund the fees where the
intended tax advantage derived from the arrangement was not
partially or fully achieved.
3. An arrangement that has substantially standardised
documentation and, or structure  and is available to more than o ne
relevant taxpayer without a need to be substantially customised  fo r
implementation. 
B. Specific hallmarks linked t o the main benefit test 
1. An arrangement whereby a participant in the arrangement
takes contrived steps which consist in acquiring a loss-making
company, discontinuing the main activity of such company and us ing
its losses in order to reduce its tax liability, including thro ugh a
transfer of those losses to anot her jurisdiction or by the acce leration
of the use of those losses. 
2. An arrangement that has the effect of converting income
into capital, gifts or other categories of revenue which are taxed at alower level or exempt from tax.
3. An arrangement which inc ludes circular transactions
resulting in the round-tripping of funds, namely through involving
interposed entities without other primary commercial function ortransactions that offset or cancel each other or that have othe r similar
features.
C. Specific hallmarks related to cross-border transactions 
1. An arrangement that involves deductible cross-border
payments made between two or more associated enterprises where at
least one of the following conditions occurs:
(a) the recipient is not resident for tax purposes in any
tax jurisdiction;
(b) although the recipient is resident for tax purposes in
a jurisdiction, that jurisdiction either:
(i) does not impose any co rporate tax or imposes
corporate tax at the rate  of zero or almost zero; or
(ii) is included in a list of third-country
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jurisdictions which have been assessed by EU Member
States collectively or withi n the framework of the OECD
as being non-cooperative;
(c) the payment benefits from a full exemption from tax
in the jurisdiction where the recipient is resident for tax
purposes;
(d) the payment benefits from a preferential tax regime
in the jurisdiction where the recipient is resident for taxpurposes.
2. Deductions for the same depreciation on the asset are
claimed in more than one jurisdiction.
3. Relief from double taxation in respect of the same item of
income or capital is claimed in more than one jurisdiction.
4. There is an arrangement that includes transfers of assets
and where there is a material difference in the amount being treated as
payable in consideration for the assets in those jurisdictions involved. 
D. Specific hallmarks concerning automatic exchange of
information and beneficial ownership
1. An arrangement which may have the effect of undermining
the reporting obligation under the laws implementing Union
legislation or any equivalent agr eements on the automatic excha nge
of Financial Account information, including agreements with thi rd
countries, or which takes advant age of the absence of such legi slation
or agreements. Such arrangements include at least the following :
(a) the use of an account, pr oduct or investment that is
not, or purports not to be, a Financial Account, but has featuresthat are substantially similar to those of a Financial Account;
(b) the transfer of Financial Accounts or assets to, or the
use of jurisdictions that are not bound by the automaticexchange of Financial Account information with the State of
residence of the relevant taxpayer;
(c) the re-classification of income and capital into
products or payments that are not subject to the automaticexchange of Financial  Account information;
(d) the transfer or conversion of a Financial Institution
or a Financial Account or the a ssets therein into a Financial
Institution or a Financial Account or assets not subject to
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reporting under the automatic e xchange of Financial Account
information;
(e) the use of legal entities, arrangements or structures
that eliminate or purport to eliminate reporting of one or more
Account Holders or Controlling Persons under the automatic
exchange of Financial Account information;
(f) arrangements that undermine, or exploit weaknesses
in, the due diligence procedures  used by Financial Institutions
to comply with their obligations to report Financial Account
information, including the use of  jurisdictions with inadequate
or weak regimes of enforcement of anti-money-laundering
legislation or with weak transparency requirements for legal
persons or legal arrangements.
2. An arrangement involving a non-transparent legal or
beneficial ownership chain with the use of persons, legalarrangements or structures:
(a) that do not carry on a substantive economic activity
supported by adequate staff, e quipment, assets and premises;
and
(b) that are incorporated, managed, resident, controlled
or established in any jurisdiction other than the jurisdiction ofresidence of one or more of the beneficial owners of the assets
held by such persons, legal arrangements or structures; and
(c) where the beneficial owners of such persons, legal
arrangements or structures, as defined in Directive (EU) 2015/849, are made unidentifiable. 
E. Specific hallmarks concerning transfer pricing
1. An arrangement which involve s the use of unilateral safe
harbour rules.
2. An arrangement involving the transfer of hard-to-value
intangibles. The term "hard-to-va lue intangibles" covers intang ibles
or rights in intangibl es for which, at the t ime of their transf er between
associated enterprises:
(a) no reliable comparables exist; and
(b) at the time the transaction was entered into, the
projections of future cash flows or income expected to be
derived from the transferred intangible, or the assumptions used
VERŻJONI ELETTRONIKA
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in valuing the intangible are highly uncertain, making it diffi cult
to predict the level of ultimate  success of the intangible at the
time of the transfer. 
3. An arrangement involving an  intra-group cross-border
transfer of functions and, or risks and, or assets, if the proj ected
annual earnings before interest  and taxes (EBIT), during the th ree-
year period after the transfer, of the transferor or transferor s, are less
than 50% of the projected annual EBIT of such transferor or
transferors if the transfer had not been made.
VERŻJONI ELETTRONIKA
_________________________________________________________________________________________________________________________
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