Malta’s Notional Interest Deduction (NID) Rules enable undertakings to apply a deduction of notional interest against chargeable income, which notional interest is determined by reference to the undertakings risk capital. The aim of such rules is to align the tax treatment of the cost of equity with the cost of debt.
A review of Malta’s rules was carried out by the Code of Conduct Group of the EU (Business Taxation). The review was carried out during 2018 and in November 2018, it has been concluded that Malta’s NID rules are considered as overall not harmful.
