Following Malta's introduction of transfer pricing
rules effective from 1st January 2024, the Maltese tax
authorities issued specific transfer pricing guidelines to clarify the
application of such rules.
Specifically, the guidelines permit the application of the OECD Transfer Pricing Guidelines Chapter VII
with respect to Low Value-Adding Services (LVAS).
This article examines the specifics of LVAS in the context of
transfer pricing regulations, in line with the OECD transfer
pricing guidelines.
What are low value-adding services?
Low value-adding services are intercompany services that
provide minimal economic value to the receiving entity.
These services typically assist multinational corporations in their
primary business activities without significantly contributing to
the profitability or strategic direction. The OECD Transfer Pricing
Guidelines provide for a simplified approach to price such services
and document the adherence of such arrangements with the
