Several significant amendments to the Companies Act, Chapter 386 of the Laws of Malta, were implemented by Act XVIII of 2024, the Companies (Amendment) Act of 2024. A public country-under-country reporting (CBCR) system for multinational corporations (MNE), is introduced in Malta under the Act, among other modifications.
Under the Public CbC Reporting Directive, MNE groups with consolidated revenues exceeding €750 million for each of the previous two fiscal years and standalone undertakings with revenues exceeding the aforementioned threshold of €750 million are required to disclose income tax information. Groups and stand-alone projects that are based only in one EU or EEA State and do not fall under the purview of any other tax jurisdiction, as well as those that have their fixed places of business or ongoing operations there, are not included in this scope.
The following categories of undertakings fall under the purview of this policy:
- Maltese ultimate parent entities of MNE groups that fall under this policy;
- Maltese in-scope standalone undertakings (i.e., not affiliated with a group);
- Maltese medium-sized and large undertakings (i.e., exceeding two of the following three thresholds: (i) balance sheet total of EUR 4 million; (ii) net turnover of EUR 8 million; (iii) average number of employees of 50); and
- Branches established in Malta whose net turnover, excluding certain exceptions, exceeded €8 million for each of the preceding two fiscal years. These branches are part of an MNE group or an in-scope standalone entity whose ultimate parent entity is not subject to EU or EEA state law.
Subject to meeting the requirements for public accessibility, the requirement on Maltese subsidiaries and branches mentioned in points 3 and 4 above will not apply if the Public CbC Report is issued by the MNE group's ultimate parent entity or by a standalone undertaking not subject to EU or EEA state law. This is provided that the report identifies another EU or EEA subsidiary or branch that has published the report in accordance with Article 48d(1) of the Public CbC Reporting Directive.
The requirements for Public CbC Reporting are applicable to accounting periods starting on or after June 22, 2024. Public CbC Reports must be made available to the public in at least one of the EU's official languages and at no cost on the website of the undertaking tasked with publishing them. They must also be published within a year of the financial year end for which they were prepared. The Public CbC Report will be available on the appropriate group website for at least five years.
In addition, within 14 days of the report's publishing on the enterprise's website, it must be provided to the Malta Business Registrar for registration and public electronic access if the reporting is mandated to be done by a Maltese enterprise.
The Directors share a common responsibility for ensuring that the responsibilities are met. Additionally, if an enterprise's financial statements must be audited, the audit report must specify whether the business in question was obliged to publish a Public CbC Reporting and, if so, whether it did so in compliance with the law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.