CRS Malta: How Automatic Data Exchange is Changing Your Malta Strategy

What is CRS and why does it affect you in Malta?

CRS stands for Common Reporting Standard—an international framework developed by the OECD (Organisation for Economic Cooperation and Development). Simply put: countries automatically share information on foreigners’ financial accounts. Malta implemented this system in 2017, putting an end to the financial secrecy of the past.

Why was CRS introduced?

The underlying idea is simple: fight tax evasion. In the past, you could stash your money abroad and hope your home country wouldn’t find out. Today, Malta automatically notifies Germany about what you earn, save, or invest here.

The system works—though unfortunately, not always in your favor.

Which countries participate?

Malta exchanges data with over 100 countries, including all EU states, the USA (via FATCA), Switzerland, Canada and many others. You can find a full list on the website of the Maltese tax authority, but let’s be honest: if your home country is involved (which is very likely), then CRS applies to you.

My hands-on advice: Many still believe Malta is an “offshore jurisdiction.” That might have been the case before 2017. Today, Malta is as transparent as any other EU country. Underestimating this can lead to nasty surprises.

What does this mean for your Malta plans?

If you’re moving to Malta to save on taxes—that’s perfectly legitimate. If you’re moving to Malta to dodge taxes—forgeddaboutit. CRS ensures that legal tax optimization remains possible, but illegal schemes are now virtually impossible.

Automatic Information Exchange in Malta: How the System Works

Imagine Maltese banks as diligent accountants who send your home country a detailed report on your finances every September. That’s basically how CRS works—except it’s more digital and precise than youd expect.

The process in detail

Every September, the big CRS machine gets rolling in Malta. Here’s how it works:

1. Data Collection (January to August): Maltese financial institutions gather information about your accounts, interest, dividends, and capital gains
2. Compilation (September): This data is standardized and packed into XML files
3. Transfer (by September 30): Malta sends this information automatically to your country of tax residence
4. Processing (October to December): Your home country compares the data to your tax returns

Which institutions must report?

The following are required to report CRS data in Malta:

• All banks (BOV, HSBC, Lombard Bank, etc.)
• Insurance firms offering investment-linked products
• Investment managers and fund companies
• Trustees and custodians
• Certain family trust structures

Automatic vs. manual inquiries

This is where it gets interesting: CRS data is transmitted automatically, without any request. In addition, there’s still the “Information Exchange on Request”—where your home country can ask Malta for specific information.

Reality check: I once had a client who thought he could “hide” his Maltese account by not earning any interest. That doesn’t work—even zero-interest accounts are reported if they hold money.

Technical security and data protection

Data transmission is via the OECD’s Common Transmission System (CTS)—an encrypted channel with even higher security standards than typical online banking. Still, it’s good to know: your financial data is traveling worldwide, even if it’s traveling securely.

Malta Holdings and CRS: What’s Changing for Entrepreneurs

This gets especially relevant if you have, or are planning, a Maltese holding company. CRS doesn’t just concern your personal accounts—it also applies to corporate structures, which has completely changed the rules of the game.

What counts as a Financial Account for companies?

Your Maltese holding company attracts CRS attention if it:

• Engages in investment activities (holdings, stakes)
• Receives interest, dividends, or royalty income
• Owns property that is rented out
• Acts as a conduit company

A pure operating company, only doing business, is usually less relevant for CRS. But let’s face it: most Malta setups are interesting precisely because they’re structured as holding or investment vehicles.

Beneficial ownership—who really stands behind?

This is key: Malta must report not only that your company makes money but also who the beneficial owners are. With a Maltese Ltd. wholly owned by a German GmbH, this is straightforward. As the structure gets more complex, so does the reporting.

The rule: anyone who directly or indirectly controls more than 25% of the shares or voting rights is considered the beneficial owner and reported as such.

Practical impact on Malta holdings

From my experience, my clients face three main changes:

1. More documentation required: Maltese companies now need to be able to document ownership chains in full—costs time and money.
2. Substance requirements matter more: Shell companies without real business activity are more problematic today than ever before.
3. Tax planning is more complex: Always assume your home country knows everything.

Case study from practice

Dr. Mara (remember her from our target audience?) wanted to structure her property investments via a Maltese holding. Previously, she might simply have pooled rental income in Malta and distributed it as needed. Today, the German tax office immediately knows about every euro hitting the company account.

This doesn’t mean the structure is bad—but it needs a different approach. Transparency forces honesty, and honest tax planning can be every bit as effective as the ‘creative’ ways of old.

Warning: I still see advisors acting as if CRS doesn’t exist. Don’t let them mislead you—a clean, transparent structure beats one that collapses at the first sign of scrutiny.

CRS Compliance Malta: Your Duties at a Glance

Compliance isn’t sexy, but it’s essential for survival. Here’s what you have to do to avoid falling foul of CRS. Spoiler: it’s less complicated than it sounds, but it’s definitely not something you should ignore.

Your reporting obligations as a private individual

As a private individual in Malta, you don’t have much to do directly—your banks report for you. But you need to be truthful when it comes to:

• Opening an account: Accurate details about your tax residence
• Changes: Moving, new nationality, changes of tax residence—report immediately
• Self-declaration: For more complex structures, you’ll be required to fill out extra forms

Obligations for Malta companies

This is where things get more serious. Your Maltese company must:

1. Conduct due diligence: On opening an account and regularly for all existing accounts
2. Classify clients: CRS-relevant or not? This must be documented.
3. Report annually: By 31 May to the Maltese tax authority
4. Keep records: All CRS-relevant documentation must be kept for at least 5 years

The Maltese forms

Malta’s main CRS forms are:

Penalties for non-compliance

Malta takes CRS violations seriously. Penalties can be painful:

• Late reporting: €200 plus €10 per day overdue
• False information: Up to €5,000 or 2% of the relevant account balance
• Refusing to cooperate: Up to €23,000
• Deliberate violations: Possible criminal prosecution

From my experience: Maltese authorities are surprisingly strict about CRS compliance. I’ve seen cases where €50 of unreported interest led to €500 in fines. Honesty pays off.

Checklist for your CRS compliance

Stay on top of things with this:

1. □ Correct tax residence stated on all Malta accounts?
2. □ Changes of residence reported immediately?
3. □ All requested self-declarations filled out?
4. □ Company correctly registered for CRS?
5. □ Annual reports submitted on time?
6. □ Documentation complete and up to date?

Malta Information Exchange: Which Data is Shared?

Let’s get specific: what does your home country actually learn about you? Here’s which information Malta passes on, and which (for now) remain private. The results might surprise or alarm you, depending on your perspective.

Account information reported as standard

For every CRS-relevant account, Malta reports the following data:

• Personal information: Name, address, date of birth, tax identification number
• Account details: Account number, financial institution, year-end balance
• Annual income: Interest, dividends, capital gains, other income
• Gross proceeds: All capital gains before Maltese withholding tax

What’s reported for investment funds and insurance

This gets more detailed. For funds, Malta reports:

• Value of shares at year-end
• Distributed and retained earnings
• Capital gains on sale of fund shares
• For insurance: surrender values and investment returns

Interesting: even if your fund reinvests and you don’t actually receive any distributions, the attributed gains are reported. So the German tax office knows what your Malta fund has earned, even if you received nothing.

Beneficial owner information for companies

With company structures, things get complex. Malta reports:

What is NOT automatically reported

To keep you from getting paranoid—these remain (for now) private:

• Individual transactions and payees
• Loans and credit balances (unless interest is earned)
• Cash holdings outside of accounts
• Direct property ownership (unless via companies)
• Artworks, jewelry, physical precious metals
• Private email or phone communications

Special case: cryptocurrencies

This is one to watch for the future. Cryptocurrencies aren’t yet fully covered by CRS, but that’s changing. Malta is working on new rules for:

• Exchange accounts at Maltese crypto exchanges
• Staking income with Maltese providers
• DeFi protocols linked to Malta

Insider info: I’ve followed the OECD’s crypto-CRS discussions since 2022. By 2026, crypto holdings will likely be fully reportable too. Anyone thinking Bitcoin is a way around CRS is in for a surprise.

Case study: What Germany finds out about you

Let’s say in 2024 you have in Malta:

• A bank account with €50,000 end-of-year balance
• Received €1,200 in interest
• Fund shares worth €80,000 with €3,500 retained earnings
• A holding company with €100,000 in annual profits

In September 2025, the German tax office receives all this automatically—without having had to ask. Transparent enough for you?

CRS Malta 2025: Practical Impact for German Nationals

Now let’s get down to what CRS really means for you as a German in Malta. I’ll explain how CRS affects your tax return, your financial planning, and your Malta strategy. No theory—practical, real-life advice from my daily experience.

Impact on your German tax return

The German tax office cross-checks Malta’s data with your tax return. Here’s what happens:

• Automatic matching: Software matches CRS data with your “Anlage AUS” details
• Red flag checks: Significant discrepancies are reviewed manually
• Enquiries: You’ll get questions from the tax office if there are inconsistencies
• Estimations: If you forget to declare Malta income, tax authorities will estimate—generously in their own favor

The three most common pitfalls

In my practice, these are the three typical issues:

1. Accumulating funds: You don’t receive a payout, but Malta still reports your fund earnings. In Germany, you must declare these as deemed distributions.
2. Exchange rate differences: Malta reports in euros, but your tax return might use different conversion rates. This can lead to apparent discrepancies.
3. Double taxation: Malta withholds withholding tax, Germany taxes too. Without proper credit, you end up paying twice.

Impact by user group

For digital nomads (like Anna):

You’re in Malta for a workation and open an account for daily banking? Your German transfers and Maltese interest are reported. Usually not a problem—but you must declare them in your German tax return.

For extended stayers (like Luca):

Here it gets trickier. You earn income in Malta but still have German tax residence? Germany gets all the Malta data, and you must prove you’ve declared all Malta income correctly.

For permanent movers (like Dr. Mara):

With Maltese tax residence, CRS is more relaxed. Germany still finds out about your Malta income, but with correct residence status, this is usually not a problem tax-wise.

Concrete action steps for 2025

What happens during audits

I regularly assist in tax audits where CRS data is crucial. Typical process:

1. Pre-audit research: The auditor already has all your Malta data before starting
2. Detailed questions: “Where did these €15,000 on your Malta account come from?”
3. Proof assessment: You must fully document that everything was declared
4. Estimation: Any gaps mean the tax office will (generously) estimate in its own favor

Real-life warning: I had a client who “forgot” to declare €5,000 of Malta interest. The resulting back taxes, interest, and penalty: €3,200—instead of €1,800 if declared honestly.

Making best use of the double taxation treaty

Germany and Malta have a double taxation agreement (DTA) to avoid double taxation. Here’s how to use it correctly:

• Exemption method: If you have Maltese residency, most income is only taxed in Malta
• Credit method: For German residents, Malta-source tax is credited against German liability
• Documentation: Collect proof of Malta taxes paid
• Progression clause: Malta income still influences your German rate, even if not directly taxed

Tax Planning in Malta Under CRS: Strategies that Still Work

Transparency doesn’t mean giving up. Even under CRS, there are legal ways to optimize taxes—they just have to be above board and well thought out. Here are the Malta strategies that will still work in 2025 (and those to forget).

What definitely DOES NOT work anymore

So there’s no confusion—these “strategies” are dead:

• Secret Malta accounts: Don’t exist anymore, forget it
• Shell companies with no substance: Detected right away
• Layered offshore structures: CRS sees through them all
• “Discreet” Maltese private banks: Report just like everyone else
• Crypto workarounds: Will soon be covered too

Strategies that still work

1. Genuine Maltese tax residence

If you actually live at least 183 days a year in Malta and shift your center of life there, you become tax resident in Malta. The double taxation treaty applies, and you primarily pay taxes in Malta.

Advantages:

• Often lower tax rates than Germany
• No German tax liability on Malta income
• EU-wide recognition, completely legal

Disadvantages:

• You have to actually live in Malta
• Progression clause still applies to German income
• Complex transition rules on emigration

2. Malta non-dom status for foreign nationals

As a Maltese resident but non-domiciled, you pay tax only on Malta income. Foreign income is only taxed if brought into Malta.

3. Malta holding for real business activity

A Maltese holding company with genuine business activity can still be highly tax-efficient—if it’s got substance:

• Real management in Malta: At least one full-time manager on site
• Qualified staff: Professional personnel for key functions
• Proper offices: Not just a postal address
• Regular board meetings: Held in Malta

Practical implementation of a CRS-compliant Malta structure

Step 1: Clarify residency

Decide clearly: German or Maltese tax residency? Half-measures no longer work.

Step 2: Build substance

If Malta holding, then do it right:

1. Employ a qualified director on site
2. Rent real office space (not at your lawyer’s)
3. Make all key decisions in Malta
4. Maintain thorough documentation

Step 3: Transparent structuring

Plan as if the German tax office knows everything from the start—because they do.

The 6/35 rule for Malta holdings

Malta offers a compelling regime for holdings: 35% corporate tax, but 6/7 of that refunded to EU shareholders upon distribution. Effective tax rate: 5%.

Requirements:

• Real business activity in Malta
• Distribution to EU shareholders
• No abuse (substance-over-form)
• CRS-compliant reporting

From my consulting practice: The 6/35 rule still works perfectly well under CRS—but only for real business activity. Pure dividend conduit setups with no value creation have become problematic.

Future-proof planning

Plan your Malta strategy with the future in mind:

• EU compliance: New EU anti-avoidance rules
• OECD developments: Substance requirements are tightening
• Digitalization: Automatic checks are becoming standard
• Transparency trend: Even more data sharing is coming

Golden rule: plan honestly and long-term. Short-term tricks no longer work, but sound tax optimization is still possible.

Frequently Asked Questions About CRS Malta

Does CRS apply to me if I’m only on holiday in Malta?

Normally not, unless you open a Maltese account. Tourist spending with a German credit card is not CRS relevant.

Do I have to report my Maltese checking account to Germany?

Yes, all foreign accounts belong in the “Anlage AUS” section of your tax return—including ordinary checking accounts with no interest.

Can I avoid CRS by using cryptocurrency?

Currently, partially—but that is changing quickly. By 2026, crypto exchanges will probably be subject to CRS reporting too.

What happens if I forget to declare Malta income?

The German tax office finds out automatically and may accuse you of tax evasion. Best to do a voluntary disclosure right away.

Are Maltese insurance policies also subject to CRS?

Yes, if they are investment-based. Pure risk insurance without capital formation is usually excluded.

Does a trust structure help to avoid CRS?

No, CRS also covers trustees and beneficiaries. Transparency can no longer be avoided by adding layers intermediaries.

Do I have to declare my Malta account even if it’s always empty?

Yes, reporting is mandatory regardless of the account balance. Zero balances are reported too.

Can Malta share my data with non-EU countries?

Yes, Malta exchanges CRS data with over 100 countries—including the USA, Switzerland, Canada, and many more.

What’s the difference between CRS and FATCA?

FATCA is the US system for US citizens only. CRS is the international system for everyone else. Malta applies both.

How long until my home country receives the Malta data?

Malta submits data for the previous year by September 30. So your tax office has it by October at the latest.