Malta’s Transfer Pricing rules 

Cross‑border arrangements between associated enterprises

The Rules apply only to cross‑border arrangements entered into between associated enterprises.

Associated enterprises

“Associated enterprises” are defined as bodies of persons where one enterprise, or the same person or persons, controls another enterprise. Control may arise: 

• through direct or indirect participation of more than 75% in the voting rights or ordinary share capital; or

• by virtue of powers conferred through the articles of association or other governing documents.

For constituent entities forming part of a multinational enterprise (MNE) group that is subject to Country‑by‑Country Reporting (CbCR) obligations, this threshold is reduced to more than 50%.

Cross‑border arrangements 

A “cross‑border arrangement” includes:

• arrangements between a Maltese‑resident company and a non‑Maltese‑resident party;

• arrangements between a Maltese‑resident company and a permanent establishment situated outside Malta, where the arrangement is effectively connected to that permanent establishment; and

• arrangements between a company that maintains a permanent establishment in Malta (to which the arrangement is effectively connected, or from which income or gains arise in Malta) and a non‑Maltese‑resident party. 

Domestic transactions between Maltese entities are expressly excluded from the scope of the Rules.

De minimis thresholds

The Rules do not apply where, in the year preceding the relevant Year of Assessment, the aggregate arm’s length value of cross‑border arrangements does not exceed: 

• €6 million in respect of items of a revenue nature; and

• €20 million in respect of items of a capital nature. 

Where these thresholds are not exceeded, the arrangements fall outside the scope of the Maltese Transfer Pricing Rules.

OECD Transfer Pricing Guidelines – methodologies and documentation

The arm’s length price is expected to be determined by applying the methodologies set out in Chapter II of the OECD Transfer Pricing Guidelines. While these methodologies are preferred, alternative methods may be accepted where appropriate, provided they are consistent with the OECD framework. 

Entities in scope are required to prepare transfer pricing documentation on a timely basis. Such documentation must be prepared in accordance with Chapter V of the OECD Transfer Pricing Guidelines and should include both:

• a Master File; and 

• a Local File.

The documentation must be made available to the Malta Tax and Customs Administration (MTCA) upon request. 

Unilateral transfer pricing rulings and Advance Pricing Agreements (APAs)

The Rules also establish a framework for the request and issuance of unilateral transfer pricing rulings and advance pricing agreements (APAs).

A unilateral transfer pricing ruling is binding on the Commissioner for Tax and Customs for a period of five years from the date on which it takes effect. However, the Commissioner may decline to issue such a ruling where sufficient certainty regarding the tax treatment of the transaction already exists under the Income Tax Acts.

Similarly, an APA may be entered into for a period not exceeding five years, commencing from the date on which the agreement takes effect, as determined during the relevant mutual agreement procedure. 

PwC Malta has a dedicated transfer pricing team that assists multinational groups and Maltese entities in navigating the Maltese Transfer Pricing Rules.

We can support you throughout the full transfer pricing lifecycle, including:

• assessing whether entities and arrangements fall within the scope of the Rules;

• determining arm’s length pricing in line with the OECD Transfer Pricing Guidelines; 

• preparing Master Files and Local Files compliant with Maltese requirements; and

• assisting with unilateral transfer pricing rulings and advance pricing agreements.

Our integrated approach combines local Maltese tax expertise with PwC’s global transfer pricing network, ensuring practical, robust and defensible outcomes.