Consolidated Group (Income Tax) Rules, 2019

On 31 May 2019, Malta published the "Consolidated Group (Income Tax) Rules". The rules will come into force as from year of assessment 2020 and the rules introduce the concept of fiscal units into Maltese tax law.

Fiscal Unit

A parent company (the principle taxpayer) may make an election for itself and its subsidiaries (both Maltese and oversea companies) to form a fiscal unit. The parent company must hold at least 95% of the following rights – voting rights; profits available for distribution; and assets available for distribution upon winding up. Moreover, both the parent and subsidiaries must have the same accounting year end. Upon election, subsidiaries are referred to as transparent subsidiaries. Entities which are not resident in Malta may form part of a fiscal unit and the principle taxpayer must always fall within the definition of "a company registered in Malta" as defined by the Income Tax Act (ITA). Once a fiscal unit is registered, the principle