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Malta Extends Deadline To Establish Fiscal Unity

by Ulrika Lomas, Tax-News.com, Brussels

21 August 2020


Malta's Commissioner for Revenue (CfR) has announced an extension to the deadline for applying for fiscal unity for the 2020 year of assessment.

The August 31, 2020, deadline has been pushed forward to September 30, 2020, the CfR announced on August 14, 2020. This deadline is relevant for taxpayers whose basis year for the 2020 year of assessment ended on December 31, 2019.

Malta began accepting applications to under its new Fiscal Unity regime starting August 1, 2020.

Malta introduced the fiscal unity regime via Legal Notice 110 of 2019. Under the regime, a group can form a fiscal unit with a subsidiary, or subsidiaries, in which the principle taxpayer owns at least a 95 percent shareholding at the end of the preceding year of assessment. When a fiscal unit is formed, transactions between entities within the unit are disregarded for tax purposes (except transactions involving immovable property) and the income of the unit is taxable in the hands of the principle taxpayer only.

Entities must not have outstanding tax balances or outstanding filings under the Income Tax Acts, the Value Added Tax Act, or the Final Settlement System Rules to form a fiscal unit.

Typically, taxpayers seeking to register a fiscal unit should do so within six months of the end of their basis year ending. More time is being allowed for the 2021 year of assessment for businesses whose financial year ended on July 31, 2020, or earlier. Applications for these taxpayers will be accepted until January 31, 2021.

Registration of the fiscal unit should be done through the online profile of the principal taxpayer, through the CfR income tax portal.

TAGS: tax | business | Malta | transfer pricing | Tax

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