Agreement on Malta-US CbC reporting signed

Ms. Michelle de Maria | 12 Jan 2018

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Pursuant to an update published by the US Internal Revenue Service, on 20th of July 2017 Malta and the US have signed the Arrangement on the exchange of Country-By-Country reports (the “Arrangement”).

The Arrangement is aimed at increasing international tax transparency and improving the tax authorities’ access to information regarding the economic activity of multinational enterprise groups (“MNEs”).

In order to achieve that aim, MNEs that exceed a consolidated revenue threshold defined by applicable domestic laws are obligated to file yearly with the tax authorities a standardized Country-By-Country report. Such report should provide information indicative of the location of the MNE’s economic activity (e.g. global allocation of the income or taxes paid). In effect, such information should help tax authorities to assess high-level transfer pricing and/or other base erosion and profit shifting related risks.

The first round of information exchange between Malta and the US will concern Country-By-Country reports for fiscal year commencing on or after January 1, 2016.  

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Ms Michelle de Maria

Partner, Tax

+356 22056692

Mr Kenneth Camilleri

Senior Partner, Global Immigration & Tax

+356 22056414