Country by Country reporting was introduced to Malta by L.N 400 of 2016. It amended the Cooperation with Other Jurisdictions on Tax Matters Regulations S.L 123.127 (“The Regulations”).
It is a recent tax compliance obligation that requires multinational enterprises to annually file a comprehensive group tax report in every jurisdiction where they have a tax residence. The report is designed to show
global tax information of the multinational group and of its constituent member entities. For every member entity of the group that is tax resident in a jurisdiction that has implemented the Country-by-Country tax reporting standard, a general obligation is imposed to provide a report not only of its local activities but also to provide a complete tax-picture of the group, showing the relevant tax information of every other entity within the multinational group. This creates significant tax obligations at group and entity level.
A multilateral Convention setting out the framework for automatic exchange of information and documents has been entered into with a total of 108 countries being signatories. Within this framework, as at 1st March 2017, 57 countries have signed a multilateral agreement to exchange the CbC report within the “Country-by-Country” tax reporting standard in their respective jurisdictions. Apart from the multiple reporting obligation that this creates, the potential to trigger tax investigations across multiple jurisdictions is a concern well deserving of timely attention.
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