“Tax optimisation is our motivation”
Bar a number of exceptions, direct taxation is still mostly subject to the sovereign power of individual states and every state jealously guards its sovereign right to tax its residents or income sourced within its jurisdiction. The science of international taxation deals with the overlap and interaction of the taxing powers of sovereign states in the presence of cross-border taxable events. In today’s globalized world, the opportunities for cross-border transactions have boomed but most countries’ tax systems have not changed as quickly. This creates the risk of double or multiple taxation as well as tax mitigation opportunities for businesses operating cross-border.
Companies, entrepreneurs and estates having cross-border business activities and interests must be well advised on the potential pitfalls of international double or multiple taxation as this could have devastating effects on their financial goals. On the other hand, not taking advantage creatively of international tax mitigation opportunities will almost certainly mean the loss of a competitive advantage for businesses. International tax planning is the art of legally making the best possible use of the opportunities created by such interaction whilst avoiding the pitfalls.
International tax planning requires detailed legal and practical knowledge of the international tax aspects of each country’s international tax system effecting a particular situation or transaction. One must also be aware of countermeasures against adopted by high tax countries against what is perceived as harmful tax competition and abusive tax planning. There has never been a time where international tax arbitrage has been so much under fire both at a European and international level. The move towards Automatic Exchange of Information and initiatives like BEPS by the OECD mean that taxpayers active cross-border will be faced with an evolving legal environment aimed at discouraging and preventing confidential transactions and international structures that give priority to form over substance in order to obtain a tax advantage.
Corrieri Cilia was set up with the principal aim to provide high quality tax and legal assistance to clients involved in international trade and business transactions. Our team of international tax lawyers can assist you in structuring international business transactions in the most effective and tax efficient manner in line with the latest international tax and legal developments in Malta and elsewhere.
Related
Publications
Taxation of Aircraft Enterprises in Malta
Aircraft operation in Malta With the intention of establishing itself as a leading jurisdiction for aircraft registration and operation, Malta introduced the Aircraft Registration Act, 2010 and acceded to the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol. A number of fiscal incentives aimed at attracting international aircraft management business […]
Automatic Exchange of Information and Common Reporting Standards
Over the last few years, Governments have increased their efforts to suppress escalating tax fraud and evasion as a result of aggressive cross-border tax planning. Cooperation between tax administrations is critical in the fight against tax evasion and in protecting the integrity of tax systems. A key aspect of this cooperation is the exchange of […]
Central Register of Beneficiaries
Over the years, corporate vehicles such as companies, trusts, foundations, partnerships and other types of legal persons and arrangements have, unfortunately, been misused for illicit purposes, including money laundering, bribery and corruption, insider dealings, terrorist financing and other illegal activities. In fact, corporate vehicles have proven to be an attractive way to disguise and convert […]
Ship & Yacht Registration in Malta
The registration of ships under the Maltese flag is regulated by the Merchant Shipping Act of 1973 (with all its subsequent revisions and amendments), which Act is further supplemented by subsidiary rules and regulations. Malta has, furthermore, adopted all the major international maritime conventions. Besides the simple yet highly effective legislative framework, Malta also boasts […]
Resident, non-domiciled companies
The scope of taxation in Malta depends on the person’s residence and domicile. In the Income Tax Act, a ‘person’ is defined as an individual and a body of persons which includes companies, any fellowship, society or other association of persons, whether corporate or unincorporated and whether vested with legal personality. While the term ‘domicile’ […]
VAT on Aircraft Leasing
Malta provides for a leasing set-up by means of which a lower effective rate of VAT can be availed of for the use of aircraft in the EU airspace. This is achieved through a VAT aircraft leasing procedure that allows the payment of VAT exclusively on the portion of use of the aircraft within the […]
The Proposed EU Directive for the automatic exchange of Tax Rulings
Globalization and the increasing mobility of taxpayers can make it difficult for Member States to assess tax bases properly. This phenomenon can affect the functioning of taxation systems and contributes to tax avoidance and tax evasion, and thus jeopardize the functioning of the Internal Market. Over the last few years, the European Commission has taken […]
Anti-Tax Avoidance Directive
On 21 June 2016, the Economic and Financial Affairs Council of the European Union (ECOFIN) reached final political agreement on the Anti-Tax Avoidance Directive[1] (ATAD or Directive). The ATAD was originally proposed by the European Commission on 28 January 2016 as part of the Anti-Tax Avoidance package (ATA package)[2]. The aim of the ATAD is […]
The EU Directive for the automatic exchange of Tax Rulings
On 8 December 2015, the Economic and Financial Affairs Council of the European Union (ECOFIN) formally adopted amendments to the EU Directive on Administrative Co-operation in the field of direct taxation which introduce the mandatory automatic exchange of information in relation to tax rulings[1] (amended Directive). This amended Directive had to be implemented in the […]
Amendments to the Anti-Tax Avoidance Directive dealing with Hybrid Mismatches
On 21 February 2017, the Economic and Financial Affairs Council of the European Union (ECOFIN) reached agreement on the amendments to the Anti-Tax Avoidance Directive (ATAD) introducing rules on hybrid mismatches involving third countries (ATAD 2). The approved text of the ATAD 2 is largely in line with the OECD BEPS Action 2 recommendations. Hybrid […]
UBO Register for Companies
As of 1st January 2018 all Maltese foundations have a new obligation to identify, record and report their beneficial owners to the Registrar of Legal Persons. A right of access to such new information will also come about. Which entities must comply? The Regulation applies to all foundations established: as a beneficiary foundation, for […]
Budget 2020 Tax Measures
On 14th October 2019, the Minister for Finance the Hon. Edward Scicluna, presented the Budget for 2020. The Budget Speech did not refer to major changes to the Maltese tax system. Unlike previous Budget Speeches the Budget Speech for 2020 contemplated very few new tax measures. The tax measures that the Minister referred to are […]
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