Updates to the Notional Interest Deduction (NID) Guidelines

On the 11th of July 2019, the Commissioner for Revenue updated its guidelines on the NID rules.  The updated guidelines include a new paragraph ‘xi’ which refer to deductions calculated in respect of accounting periods which are longer or shorter than twelve months.  The updated guidelines state that in order to further approximate the neutrality between […]

Written By ACT Team

On August 7, 2019
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On the 11th of July 2019, the Commissioner for Revenue updated its guidelines on the NID rules.  The updated guidelines include a new paragraph ‘xi’ which refer to deductions calculated in respect of accounting periods which are longer or shorter than twelve months. 

The updated guidelines state that in order to further approximate the neutrality between debt and equity financing, an adjustment shall be applied to the NID in respect of accounting periods that are longer or shorter than twelve months. The NID for such periods is to be inflated or reduced by multiplying the NID by the number of days in the accounting period and dividing the result by 365. This new paragraph (xi) shall be applicable with effect from year of assessment 2020.

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].