The Maltese government on December 20 opened a consultation seeking feedback on draft transfer pricing rules. The government intends to use the feedback to craft final transfer pricing rules to be published in late 2022 with an aim to apply the rules to tax years beginning in 2024.
The rules would apply to cross-border arrangements between associated enterprises, as defined therein. Small and medium-sized entities would be excluded, as would taxpayers with an aggregate value of cross-border arrangements below a de minimis threshold (which is yet to be defined).
The rules define “arm’s length amount” but do not specify methodologies for determining it. The government expects to issue forthcoming guidelines on designated methodologies with reference to the OECD transfer pricing guidelines.
Record-keeping requirements would apply to in-scope taxpayers. Those requirements will also be detailed in subsequent guidance.
In addition, the rules set out a framework for bilateral and multilateral advance pricing agreements, as well as unilateral transfer pricing rulings.
The consultation is open until February 28, 2022.
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