Cross border tax rulings

On 6 October 2015, the EU Council reached a political agreement on a directive aimed at improving transparency in the assurances given by member states to companies about how their taxes are calculated.  The directive is one of a number of initiatives aimed at preventing corporate tax avoidance.    It will require member states to […]

Written By ACT Team

On December 11, 2015
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On 6 October 2015, the EU Council reached a political agreement on a directive aimed at improving transparency in the assurances given by member states to companies about how their taxes are calculated.  The directive is one of a number of initiatives aimed at preventing corporate tax avoidance.   

It will require member states to exchange information automatically on advance cross-border tax rulings, as well as advance pricing arrangements (APAs). Member states receiving the information will be able to request further information where appropriate. The Commission will also be developing a secure central directory, where the information exchanged would be stored. The directory will be accessible to all member states and to the extent that it is required for monitoring the correct implementation of the directive, to the Commission.  

The directive will ensure that where one member state issues an advance tax ruling or transfer pricing arrangement, any other member state affected is in a position to monitor the situation and the possible impact on its tax revenue.  The agreement on the directive is in line with developments within the OECD and its work on tax base erosion and profit shifting (BEPS). 

The new rules will have to be applied as from 1 January 2017. In the meantime, existing obligations to exchange information between member states will stay in place.  Special rules apply with respect to rulings issued before 1 January 2017.

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].