Industry Updates

Malta Merchant Shipping Companies

In February of this year (2020) an amendment was enacted to the Merchant Shipping (Shipping Organisations – Private Companies) Regulations, S.L. 234.42 via Legal Notice 31 of 2020, making it mandatory for companies registered under these regulations to prepare and submit audited financial statements the Malta Business Registry (MBR). The shareholders and directors of all companies established under the Merchant Shipping Regulations should take note of this obligation.

DAC6 – EU Mandatory Disclosures for Intermediaries

6th Amendment to the EU Directive on Administrative Cooperation:-
DAC6 comes into effect on the 1st July 2020 and imposes reporting obligations on cross border arrangements (CBAs), relating to direct taxation, that contain at least one of the hallmarks listed in the Directive. VAT and other forms of indirect taxation are therefore excluded from the Directive.

Malta Patent Box regime – a home for your IP

The new Malta Patent box regime were enacted in 2019 and are effective as from the 1 January 2019. These rules apply to Income or Gains derived from Intellectual Property by a Beneficiary. These rules have been designed to attract patented intellectual property related business activity to Malta. Qualifying intellectual property (IP) A patent or […]

Malta: Notional Interest Deduction Rules

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.

Malta Anti-Tax Avoidance Hybrid Mismatch Rules

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.

OECD Convention on Taxation Treaties

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.

OECD BEPS Initiative Explained

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.

EU Foreign Direct Investment (FDI) Screening

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.

Interest Deduction Limitation Rules

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.

Malta – Exit Taxation

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.

Controlled Foreign Company (CFC) Rules

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.

Malta – Anti Tax-Avoidance Provisions

The anti tax-avoidance provisions in Malta are broadly written. They include schemes or arrangements that reduce, postpone or obtain a tax advantage or refund or offset, should such schemes or arrangements be fictitious, artificial or non-genuine or are not put in place for valid commercial reasons or…..