Over the years, tax shelter ideas have occasionally arisen in connection with the interpretation of some of the pension provisions found in US tax treaties, encouraged, perhaps, by the lack of guidance on many treaty provisions.
One such idea was that a US taxpayer could contribute appreciated assets to a personal Maltese pension fund, then the assets could be sold without tax (since in a tax exempt pension fund), with the proceeds distributed to the US taxpayer tax-free to the extent the distribution would be tax-free if the person were a resident of Malta. This strategy was generally based on Articles 17 and 18 of the US–Malta tax treaty, which had provisions indicating that a US taxpayer would not be subject to US tax on income in a Maltese pension fund until it was distributed to them, and also that a distribution from a Maltese pension fund that would be tax exempt to a resident of Malta would also be tax exempt if distributed to a US taxpayer. Notably, the definition of “pension fund” in the US-Malta tax treaty was looser regarding Malta pension funds than is typical in many other tax treaties, where it is limited to tightly regulated funds similar in nature to US 401(a) plans. In addition to whether this was a proper interpretation, the idea also raised FATCA, FBAR, and Code section 409A issues.
Now, in a competent authority arrangement (“CAA”) between the US and Malta, this interpretation has effectively been shut down. The CAA does so by stating that it is the...
Wisconsin Republican Dylan Pfaffenbach’s deleted social media posts reveal that before he started running for the state Assembly, he had hardline anti-abortion views and used rhetoric portraying p...