Malta’s Tax Agency Improves Fiscal Unity Principles

The Malta’s Tax Agency has issued a new version of the guidelines regarding the fiscal unity principles. In particular, the items in paragraphs VIII-XIX were supplemented. The changes relate to the payment of income tax for legal entities.

The fiscal unity regime was introduced in 2019. According to the document, a company can form a fiscal unit with a subsidiary if the main taxpayer owns at least 95% of the shares. When establishing a separate unit, the financial transactions within the holding are not considered for taxation. The income is recognized only as the unit of taxation with the main taxpayer.

The applications for the fiscal unity regime started being accepted on August 1, 2020. It is necessary to register a company within 180 days after expiry of the tax period. This year, the Malta’s tax agency has set a registration period for the companies whose tax period ended on 31 July 2020. Such companies can apply until January 31, 2021.

Law & Trust offers its services for the corporate clients working in Malta. The specialists of our company will provide advice on the application of fiscal unity and help you to switch to this regime.