October Tax News

𝐋𝐨𝐜𝐚𝐥 𝐓𝐚𝐱 𝐔𝐩𝐝𝐚𝐭𝐞𝐬

1. IFRS 17 Guidance Note issued by MTCA

The MTCA has released a Guidance Note on the taxation of insurance businesses following the adoption of IFRS 17, the accounting standard for insurance contracts, effective from January 1, 2023. New rules will be issued under Article 27(8) of the Income Tax Act, which prescribe the computation of total income for insurance undertakings adopting IFRS 17.

Key points of the Guidance Note include:

- IFRS 17’s adoption may have a substantial one-off transitional impact, necessitating new rules for calculating total income and handling tax payments.
- Significant gains or losses may arise upon transition, and Malta allows any tax impacts on gains to be staggered over five years, if an election is made.
- Effected entities can defer tax payments on adoption gains by completing a form by 15 November 2024. They must be compliant with all tax obligations to qualify as specified in the Guidance Note.
- Payments will be due annually, with the first payment due by 21 December 2024, and apply only in relation to the tax on adoption gains.



2. Malta Budget 2025

On Monday 28th October 2024, the Honourable Minister of Finance presented the Malta Budget for the year 2025. Our team at RADIX have analysed the Budget speech and presented a detailed analysis and commentary on the Fiscal measures announced.

CLICK HERE to read our analysis: https://www.radixmalta.com/malta-budget-2025



3. November tax deadlines

- 22nd November 2024: VAT Return Submission
- 27th November 2024: MicroInvest Application (for late filings)
- 29th November 2024: Tax Return Submission (for companies with a calendar year ending 31st December)
- 29th November 2024: FS5 Submission for the month of October



𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐓𝐚𝐱 𝐔𝐩𝐝𝐚𝐭𝐞𝐬

1. Member States update EU list of non-cooperative tax jurisdictions

- As updated on 8th October 2024, ‘Antigua and Barbuda’ was removed from Annex I (list of non-cooperative jurisdictions) after being granted a supplementary review by the Global Forum on Tax Transparency and Exchange of Information with regard to exchange of information on request.
- Pending the results of the review, Antigua and Barbuda will remain on Annex II (state of play of commitments).
- 11 jurisdictions remain on Annex I: American Samoa, Anguilla, Fiji, Guam, Palau, Panama, the Russian Federation, Samoa, Trinidad & Tobago, US Virgin Islands, and Vanuatu.
- 9 jurisdictions now feature in Annex II: Antigua and Barbuda, Belize, The British Virgin Islands, Costa Rica, Curacao, Eswatini, Seychelles, Turkey, and Vietnam.



2. DAC9 Proposal Adopted by The European Commission

On 28 October 2024 the European Commission has introduced DAC9, a proposal to amend the Directive on Administrative Cooperation (DAC), aiming to streamline multinational enterprise (MNE) tax filing under the Pillar 2 Directive, which establishes a minimum tax rate for MNEs and large-scale domestic groups (LSDGs) within the EU.

Key Aspects of DAC9:

- Instead of filing top-up tax returns in each country of operation, MNEs can file a single return for the entire group, reducing administrative complexity.
- A standardised reporting form, aligned with OECD and G20 guidelines, will be used by MNEs and LSDGs to provide consistent tax information, facilitating easier compliance and data exchange between EU tax authorities.
- Tax authorities will exchange this data, supporting greater transparency and coordination within the EU.

Timeline:

- EU countries must implement DAC9 by 31 December 2025.
- MNEs are to submit their first consolidated tax return by 30 June 2026, with tax authorities exchanging this information by 31 December 2026.