Transfer Pricing updates

30 April 2021

Recent developments in the international and local tax scenario, as well as the number of initiatives taken by the EU and the OECD, makes it clear now more than ever that tax authorities worldwide are paying close attention to cross-border transactions. Regulating Transfer Pricing (TP) is one method which aids tax authorities in combating aggressive tax planning and profit-shifting, through the regularisation of pricing arrangements between multinational related parties.

TP regulations are currently adopted by the majority of European countries, and are also implemented by a number of countries which are non-OECD members. To-date Malta has no sophisticated TP rules in place. Having said that the Maltese Income Tax Act has been recently amended to empower the Finance Minister to make rules in relation to TP.

In this context, an expectation exists that further developments are anticipated with respect to TP in Malta.

Are you prepared?

Does your company form part of an international group?
Does your company have a foriegn branch? Or is it a branch of a foreign Head Office?
Are there any cross-border intercompany transactions in place?
Are there any intercompany agreements in place?
How is pricing for cross-border transactions determined?
How are assets transferred within the Group priced?

Are you familiar with the OECD Guidelines on TP?
Is the pricing method for cross-border intercompany transactions documented?
Have you considered including the Maltese operations in the Group TP documentation?
Is there a risk of a foreign TP audit?
Have you considered COVID-19 implications on intercompany transactions?

How we can help

We can help you manage your TP risks and identify opportunities for improving the efficiency of your TP function, and as part of the global PwC network we cooperate closely with specialists in TP worldwide.