The Consolidated Group (Income Tax) Rules, 2019 are fiscal unity rules. These rules came into force with effect from year of assessment 2020 in relation to Fiscal Units having accounting periods commencing in calendar year 2019 and subsequent years.
A global reference document setting out the measures taken by tax administrations worldwide has been created by the Forum on Tax Administration, containing detail of all taxation and financial measures taken by governments around the world in response to the COVID-19 outbreak.
Companies that are resident in Malta are entitled to a notional deduction for sums that are deemed to be payable by way of Interest on Risk Capital. This deemed deductible expense shall apply only in respect of profits which stand to be allocated to a company’s Foreign Income Tax Account or Malta Taxed Account. This deduction shall be claimed at the option of the company. The company claiming this deduction must obtain the approval of all shareholders with regards to the financial statements of any basis year in respect of which the deduction is claimed.
A “hybrid entity” is any entity or arrangement that is regarded as a taxable entity under the laws of one jurisdiction and whose income or expenditure is treated as income or expenditure of one or more other persons under the laws of another jurisdiction.
The European Commission has published a Roadmap concerning its Action Plan for Taking the Customs Union to the Next Level. The Commission aims to further “IT implementation and optimisation, customs risk analysis and management, integration of operations and cooperation between customs authorities, harnessing innovation and improving efficiency of customs administrations”.
In April 2018 Malta introduced the OECD Multilateral Convention, regarding the implementation of double taxation treaties related measures to prevent base erosion and profit shifting (BEPS), into local law. The Multilateral Convention has been signed by around 100 countries. project.
Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies used by multinational enterprises that exploit gaps and mismatches in tax rules to avoid paying tax. BEPS practices cost countries USD 100-240 billion in lost revenue annually. Working together within OECD/G20 Inclusive Framework on BEPS, over 135 countries and jurisdictions are collaborating on the implementation of 15 measures to tackle tax avoidance.
The European Union and Member States are introducing systems for the screening of foreign direct investment from third country investors into their territory. The screening process will require the Member States to check whether such foreign direct investment will have implications on the security and public order of that Member State, other Member States or even the European Union.
These interest deduction limitation rules applicable in Malta are concerned with limiting the extent to which borrowing costs, including but not limited to interest payable, may be deducted for tax purposes from interest revenues and other economically equivalent taxable revenues.
BEPS: OECD Publishes Responses to Country by Country Reporting Consultation:
The OECD has now published comments received in relation to a consultation document published in February inviting input concerning Action 13 of the Base Erosion and Profit Shifting Project, on Country-by-Country Reporting.
The Executive Vice-President of the European Commission Margrethe Vestager said the European Commission is strongly supportive of actions taken by some EU Member states to impose unilateral digital services tax in absence of a collective action.
Corporate exit taxation is a tax on companies that redomicile to another country or transfer assets to another jurisdiction. This is a tax that is triggered by assets moving from the tax net of one country to the tax net of another country in the absence of a transfer to a third party.
Broadly speaking a controlled foreign company (CFC) is a corporate entity that is registered and conducts business in a different jurisdiction or country than that where the controlling parent company or owners are resident. CFC regulations are anti-tax avoidance measures.
EU to impose tax rules on Member States:- Speaking at an event in Brussels, the Director for Direct Taxation and Tax Coordination in the EU, Benjamin Angel, indicated that the Commission is considering using its powers to bypass the unanimity requirement to decision making in taxation.
UK Enters Transitional Period with the EU:-
The United Kingdom’s Withdrawal Agreement, which formalises the UK’s exit from the EU, entered into force at midnight Central European Time on 31 January 2020. EU law will continue to apply in the UK at least until the end of the transition period – 31 December 2020.
Group companies or individuals are:
- registered as Auditors in Malta
- registered as Accountants in Malta
