Malta-US tax scheme added to the ‘Dirty Dozen’ scam list
Malta-US pension plans and their potential use for tax evasion are being reviewed by the US fiscal authorities who have placed them on their so-called ‘Dirty Dozen’ list of scams.
The US Internal Revenue Service (IRS) this month published a list of tax scams with a warning to watch out for Malta-based schemes which it says may be facilitating tax evasion.
Among the new additions to the 2021 list is the “potentially abusive use of the US-Malta tax treaty”.
Some US citizens and residents, the IRS said, are relying on an interpretation of the US-Malta Income Tax Treaty to avoid property tax by moving assets to Maltese pension plans.
These plans then sell the assets and distribute the proceeds back to the US holder, without taking on any tax burden.
The IRS said it is evaluating the issue to determine the validity of these arrangements.
It also warns that it might challenge the way the treaty is being…