On 5 October 2017 Malta published rules for a notional interest deduction on equity funding. The underlying idea is to align the tax cost of debt funding with that of equity – if the taxpayer so chooses, since the deduction will be optional. The rate is computed by reference to Maltese government bonds and the deduction cannot exceed 90% of taxable income. The new rules were announced in this year’s budget and will apply to profits of fiscal years ending in 2017 onwards.