CBI schemes do not present risks to Tax evasion and CRS

CBI schemes are often misunderstood, leading to believe these schemes facilitate tax evasion or present risks to crs reporting.


While residence based taxation is quite common in many countries, physical presence is the main test. Some jurisdictions, determine tax residency of an individual based on ownership of a home or availability of accommodation, family, and financial interests. Some even levy tax on worldwide income based on permanent residence status of a resident.



The tax residency status depends on  “183 days” physical presence rule. Physically present for at least 183 days of a year, irrespective of citizenship in a particular country, you are counted as a resident for tax purposes.



CBI schemes do not facilitate tax avoidance or evasion.  Many often automatically link citizenship to tax residence. This is not true.  CBI citizens are not automatically considered as tax residents.


While many ninety percent of CBI citizens do not visit or live outside the jurisdiction after acquiring citizenship through investment, it is impossible to establish tax residence in the jurisdiction. CBI citizens pay taxes where they call home.  The proliferation citizenship by investment schemes created an interesting class of diaspora population of  “CBI citizens”


The Finance ministry of Malta issued a statement in response to OECD clarified persons benefiting under the IIP and the MRVP do not automatically become resident for tax purposes in Malta nor are they granted any tax-related benefits once a person obtains citizenship/residence through such schemes”. For the purposes of the CRS, therefore, Malta Financial Institutions cannot conclude that an individual is tax resident in Malta, and consequently not disclose information, purely on the basis of such individual’s qualification under any of the Malta Programmes. Under the Maltese Income Tax Act, an individual would be considered resident for tax purposes in Malta depending on that person’s physical presence in Malta.