News

Launch of the online application for the registration of a fiscal unit

Deloitte Malta tax alert

05 June 2020

The online application for the purposes of registering a fiscal unit in terms of the Consolidation Group (Income Tax) Rules (Subsidiary Legislation 123.189) (the ‘Rules’) is available on the portal of the Commissioner for Revenue (the ‘CfR’). The CfR has also published procedural guidelines that seek to clarify the registration procedure (the ‘Guidelines’).

Eligibility requirements

The Guidelines clarify that in order to be eligible to form part of a fiscal unit, a company should not have any outstanding balances due or any outstanding filings required in terms of its income tax, value added tax and final settlement system obligations. Furthermore, where a company opts to join a pre-established fiscal unit, the said fiscal unit should not have any overdue balances or penalties due to the CfR.

In order to join or form part of a fiscal unit, a company must be a 95% subsidiary of its parent company at the end of the financial year in respect of which the election to form part of a fiscal unit is being made.

Timeframes

The principal taxpayer shall be granted a period of six months within which to register a fiscal unit, starting from the morrow of the financial period end, but not before 1 August of the calendar year of the financial period end. The timeframes in order to register a fiscal unit are summarised below:

Basis year

Year of assessment

Income tax return statutory deadline

Time window for applying for fiscal unity

Start

End

Start

End

01/01/2019

31/12/2019

2020

30/09/2020

18/05/2020

31/08/2020

01/02/2019

31/01/2020

2021

31/03/2021

01/08/2020

31/01/2021

01/03/2019

28/02/2020

2021

31/03/2021

01/08/2020

31/01/2021

01/04/2019

31/03/2020

2021

31/03/2021

01/08/2020

31/01/2021

01/05/2019

30/04/2020

2021

31/03/2021

01/08/2020

31/01/2021

01/06/2019

31/05/2020

2021

31/03/2021

01/08/2020

31/01/2021

01/07/2019

30/06/2020

2021

31/03/2021

01/08/2020

31/01/2021

01/08/2019

31/07/2020

2021

30/04/2021

01/08/2020

31/01/2021

01/09/2019

31/08/2020

2021

31/05/2021

01/09/2020

28/02/2021

01/10/2019

30/09/2020

2021

30/06/2021

01/10/2020

31/03/2021

01/11/2019

31/10/2020

2021

31/07/2021

01/11/2020

30/04/2021

01/12/2019

30/11/2020

2021

31/08/2021

01/12/2020

31/05/2021

01/01/2020

31/12/2020

2021

30/09/2021

01/01/2021

30/06/2021

For the years of assessment following that in which the fiscal unit is formed, the principal taxpayer shall be granted a period of six months within which to inform the CfR of any changes in the composition of the fiscal unit for the applicable year of assessment.

Registered tax representative

Companies joining or forming a fiscal unit should be represented by the same registered tax representative as that of the principal taxpayer. Such representative shall have the authorisation to submit the income tax returns of all companies forming the fiscal unit as at the date of the election.

Approval of minority shareholder/s

Where the 95% subsidiary is not a 100% subsidiary, the election to form part of a fiscal unit shall also require the approval of the holders of the equity shares which are not owned by the parent company. Such approval should be maintained by the principal taxpayer to be available in the event that this is requested by the CfR.

Non-resident company registration

A company that is not resident in Malta that registers to form part of a fiscal unit, would be required to register with the CfR in order to be granted a Maltese income tax registration number prior to registration. In order for a company that is not resident in Malta to form part of a fiscal unit and act as a principal taxpayer, that company should fall within the definition of ‘a company registered in Malta’ which for the purpose of the Rules requires the appointment of a fiscal representative in Malta (which could be one of the fiscal unit’s resident transparent subsidiaries).

Termination of a fiscal unit

All transparent subsidiaries should be removed from the registration form of the fiscal unit prior to the termination of a fiscal unit. In the event that a principal taxpayer exits the fiscal unit, the fiscal unit is deemed to cease existing with effect from the start of the basis year in which the principal taxpayer exists.

The full text of the Guidelines can be found here.

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