On 20 February 2024, Malta published Legal Notice No. 32 of 2024 in the Official Gazette, which outlines the provisions of the global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the European Union as per the Council Directive (EU) 2022/2523 of 14 December 2022.
Malta has decided to partially implement the Directive, which includes postponing the enforcement of the primary global minimum tax regulations, such as the undertaxed payment/profit rule (UTPR) and the income inclusion rule (IIR). This pertains to the sections outlined in Chapters I, VIII, IX, and X of the Directive.
Some critical provisions mandate a local constituent entity or a designated local filing entity to submit additional tax information returns unless filed by the ultimate parent or a designated filing entity in another jurisdiction with a valid competent authority agreement with Malta for such exchanges. If the tax information returns are filed in another qualifying jurisdiction, a notification must be submitted to the Commissioner. The Directive also includes provisions for ultimate parent entities located in Malta to designate a filing entity in any other Member State that did not adopt the UTPR and IIR.
The Directive went into effect on 31 December 2023 and applies to fiscal years starting from 31 December 2023. The deferral period is enforceable for up to six consecutive fiscal years starting 31 December 2023.
