Amendments to the NID Guidelines

The Guidelines in relation to the Notional Interest Deduction (NID) rules have been revised and a new paragraph has been added to the rules. The new paragraph (xii) entitled: Attribution of the Deemed Interest Income on Alternative Bases states that in the following circumstance, the following attribution of deemed interest income shall apply. Where a shareholder is the only shareholder […]

Written By ACT Team

On November 25, 2019
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The Guidelines in relation to the Notional Interest Deduction (NID) rules have been revised and a new paragraph has been added to the rules. The new paragraph (xii) entitled: Attribution of the Deemed Interest Income on Alternative Bases states that in the following circumstance, the following attribution of deemed interest income shall apply.

Where a shareholder is the only shareholder of a company that holds no more than 0.2% of the nominal value of the risk capital of such company and, in accordance with the Memorandum and Articles of Association, such holding is devoid of any rights to vote, to receive any dividends from the company and to participate in the profits of the company, no deemed interest income shall be attributable to such shareholder, and the share of the deemed interest income that would have been attributable to such shareholder were it not for this paragraph (xii) shall be attributable to the other shareholders of the company in proportion to the nominal value of the risk capital of the company pertaining to each shareholder.

In order to apply the above, a request in writing must be made to the Commissioner for Revenue. 

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected].