On 22 December 2021, Malta’s Commissioner for Revenue (CFR) has published draft Transfer Pricing Rules on its website for public consultation. The consultation period will end on 28 February 2022, and the draft Transfer Pricing Rules shall come into force with effect for financial years commencing on or after 1 January 2024.
The draft Rules shall be applicable to cross-border arrangements entered into between associated enterprises as defined. Micro, small or medium-sized enterprises shall be excluded from the scope. The rules shall also not apply where the aggregate arm’s length value of all cross-border arrangements does not exceed a de minimis threshold that is yet to be determined.
The Rules define the “arm’s length amount” and provide for the determination of such amount on the basis of methodologies designated by the Commissioner for Revenue in guidelines yet to be published. It is envisaged that the OECD Transfer Pricing Guidelines will constitute an important source of reference in the application of the rules. The rules also provide a formal framework for the request and issue of Unilateral Transfer Pricing Rulings and APAs (bilateral and multilateral).
