Malta

The following are some of the more recent significant developments that were introduced in Maltese tax law:

• Following a period of consultation, the Transfer Pricing Rules, 2022 were published in November 2022 and shall apply for basis years commencing on or after 1 January 2024. Further information on the Transfer Pricing Rules is set out under Transfer pricing in the Group taxation section.
• The possibility of setting up protected/segregated cell companies in the aviation and shipping sectors remains an option under Maltese law. Such cell companies allow for the possibility of segregating vessels or aircraft portfolios within the same corporate entity, thus segregating the risks and benefits attributable to the particular cell, without affecting the risks and benefits attributable to other cells within the same cell company.
• By means of the Consolidated Group Income Tax Rules, a parent company and its 95% subsidiary can form a fiscal unit for income tax consolidation, provided certain conditions are satisfied.
• The Patent Box Regime Deduction Rules provide for deductibility rules applicable to income derived from qualifying intellectual property (IP).
• Further tax incentives for occupational pension schemes are available.
• The minimum shareholding requirement of a ‘participating holding’ under the Maltese Income Tax Act is 5%. This enables Maltese companies holding at least 5% of the equity shares to claim a participation exemption (subject to the satisfaction of other conditions) on dividend income and gains derived by a Maltese company from a qualifying ‘participating holding’ or from the disposal of such holding (apart from this 5% minimum equity holding, there may be other alternative conditions to qualify for the participation exemption).
• A notional interest deduction (NID) system, aiming to approximate the tax treatment of equity with that of debt.
• By virtue of a number of schemes, such as the Investment Aid for Energy Efficiency Projects Regulations and a number of research and development (R&D) schemes, undertakings operating in various industries may qualify for assistance by the Malta Enterprise.