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In 2019, Malta introduced the concept of consolidated income tax returns for related entities through the Consolidated Group rules. These rules aim to simplify income tax calculations and tax reporting for groups of companies. Here are some key points:
 
1. Eligibility to Form a Fiscal Unit:
 
- To join or form part of a fiscal unit, a company must meet certain criteria: - It should have no outstanding balances due or any outstanding filings required under the Income Tax Acts, the Value Added Tax Act, and the Final Settlement System Rules. - For a company to join an existing fiscal unit, that fiscal unit must also have no overdue balances or penalties due to the Commissioner for Revenue (CfR). - A company can join a previously established fiscal unit if it is a ninety-five percent (95%) subsidiary of its parent company at the end of the year preceding the year of assessment in which the election to form the fiscal unit is made. - The companies forming the fiscal unit must have coterminous accounting periods. - The principal taxpayer has a 6-month period to register a fiscal unit, starting from the morrow of the financial period end (but not before August 1 of the calendar year of the financial period end). - After this period, the principal taxpayer cannot add or remove subsidiaries from the fiscal unit, except in cases of structural changes.
 
2. Non-Resident Entities:
 
- Any standalone data accompanying the submission of the consolidated income tax return is not required for non-resident entities forming part of the fiscal unit, unless such entities derive income liable to tax in Malta.
 
3. Optional Regime:
 
- The income tax consolidation regime is optional. - If a fiscal unit is established, the primary taxpayer must provide a consolidated audited balance sheet and profit and loss account covering all the companies forming part of the fiscal unit.
 
How do I register for income tax consolidation in Malta?
 
1. Eligibility and Criteria:
 
- Ensure that your company meets the eligibility criteria to form part of a fiscal unit: - No outstanding balances or filings are due under the Income Tax Acts, the Value Added Tax Act, and the Final Settlement System Rules. - If joining an existing fiscal unit, ensure that the fiscal unit also has no overdue balances or penalties. - The company must be a ninety-five percent (95%) subsidiary of its parent company. - Accounting periods of the companies forming the fiscal unit must be coterminous. - Non-resident entities forming part of the fiscal unit need to register with the Commissioner for Revenue (CfR) to obtain a Maltese income tax registration number.
 
2. Timeline:
 
- The principal taxpayer (the company leading the fiscal unit) has a 6-month period to register the fiscal unit. - This period starts from the day after the financial period end (but not before August 1 of the calendar year of the financial period end). - For subsequent years, the principal taxpayer has a 6-month period to inform the CfR of any changes to the fiscal unit's composition. - After this period, the principal taxpayer cannot add or remove subsidiaries from the fiscal unit, except in cases of structural changes.
 
3. Online Registration:
 
- Registration of the fiscal unit is done through the online profile of the principal taxpayer on the CfR income tax portal.
 
Remember that the consolidated income tax return regime is optional, but it can simplify tax calculations and reporting for groups of related companies. For detailed guidelines contact us. Our qualified accountant (Member of the Institute of Financial Services Practitioners in Malta) will help you in all aspects of your Malta Privat Limited Company, Malta Holding Company or Public Limited Company formation process, as our services do not stop at registering the company in Malta on your behalf. Our coporate lawyers and accountants will provide you all information regarding corporate tax and incorporate in Malta under maltese companies act.
 

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