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Law Booth with Fenlex

In this second Fenech & Fenech Advocates Law Booth podcast episode Romina Camilleri, Compliance Officer at Fenlex and Karl Diacono, CEO and Director of the Group discuss the regulatory challenges currently faced by Corporate Services Providers.

Law Booth is Fenech and Fenech Advocates’ latest initiative. This Podcast will tackle different topics that are of relevance to the practice areas of the Firm and its associated company, Fenlex Corporate Services Limited. Each episode will feature our seasoned professionals engaging in interesting discussions and debates relative to the legal and corporate world.

Listen to the podcast here: bit.ly/3g8CeiX

 

The Impact of the EU Non-Cooperative Tax Jurisdictions on Maltese Companies

Authors: William Cassar, Manager, Tax Compliance and Stephanie Aquilina Galea, Tax Supervisor

Several governments acknowledge that abusive tax practices can result in unfair tax competition. In an attempt to address tax avoidance and ensuring that profits are taxed in the country where the economic activities are generated and where value is created, the EU council has identified a list of jurisdictions which are regarded as non-cooperative. The motive is not to name and shame these jurisdictions, but to foster positive change and tax practices through cooperation.

Does your Company have a nexus with a country which is listed in the EU Non-Cooperative Tax Jurisdictions List?

In this Q&A edition we would like to bring to your attention the new reporting requirements and other tax implications involved related to the EU Non-Cooperative Tax Jurisdictions List.

Which countries are regarded as ‘Non-Cooperative Tax Jurisdictions’ by the EU?

The full list of jurisdictions can be found here. Such list is updated regularly, and a jurisdiction can be listed and de-listed in the same year.

What happens if a Maltese company has a nexus with a country which is listed in the EU Non-Cooperative Tax Jurisdictions List?

Essentially there are two key points that one should consider:

1. Additional reporting requirements in the corporate income tax return

2. Potential restrictions from the application of the outright participation exemption on income (dividends) derived by a Maltese Company from a qualifying participating holding.

What are the additional reporting requirements?

The Maltese corporate income tax return includes a particular Tax Return Attachment (TRA 110) which needs to be duly filled in if the company has any nexus with a jurisdiction listed in the EU Non-Cooperative Tax Jurisdictions List.

The questions raised in the income tax return are the following:

1. Did the Company have any nexus (including through incorporation, residence or fixed place of business, or through any transparent entity or arrangement) with any of the jurisdictions listed in the EU List of Non-Cooperative Tax Jurisdictions?

2. Did the Company carry out any transactions (including through any transparent entity or arrangement) with any arrangement or person incorporated, resident or carrying out any activity (including through a fixed place of business or transparent entity or arrangement) in any of the jurisdictions listed in the EU List of Non-Cooperative Tax Jurisdictions?

3. Did the Company have any links through ownership or governance (including through any transparent entity or arrangement) with any of the jurisdictions listed in the EU List of Non-Cooperative Tax Jurisdictions?

The answers to the above questions need to be filled in the income tax return on an annual basis.

What is the potential restriction on the application of the outright participation exemption?

A new proviso was recently introduced to the existing Maltese participating holding regime. Such regime provides for an outright exemption on income (dividends) or gains derived by a Maltese company from a qualifying participating holding.

Effectively the new proviso in question states that if the qualifying participating holding is resident in a jurisdiction which is included in the EU Non-Cooperative Tax Jurisdictions List (see link above) for a minimum period of three (3) months during a particular year, then subject to certain exceptions, the outright participation exemption on income (not gains) at the level of the Maltese company will not apply.

What do I need to do if a nexus is identified with a country which is listed in the EU Non-Cooperative Tax Jurisdictions List?

In the event that you identify such occurrence, we strongly suggest that you get in touch with us by sending us an email on taxenquires@fenlex.com

Latest Amendments to the Companies Act, Cap. 386

Author: Oxana Gritsun, Corporate Administrator

Date: 22 November 2021

On the 26th of October 2021 the Department of Information (doi.gov.mt) published ACT No. LX of 2021 amending the Companies Act. The below summarizes the presented amendments which were passed by the House of Representatives at Sitting No.500. While some changes are more impactful than others, it is vital to have a clear understanding of the latest legislation in place.

1. Preliminary Provisions (Article 2)

The list of definitions now includes the term “electronic means” which covers electronic equipment for processing and storage of data.

In addition, all registration documents, which used to require the individual’s Passport/ID numbers should include the date of birth instead.

2. Amendment to the Contents of the Memorandum (Article 69)

The M&As shall now state the company’s email address while residential addresses may be substituted by correspondence addresses.

3. Registers of Residential Addresses (Article 123A)

A company is now expected to keep a register of all involved parties, including shareholders and directors, listing their names, residential and email addresses. In case of changes, they must be delivered to the Registrar within 14 days, accompanied by the respective form. This falls under the responsibility of director(s)/company secretary to provide this information to the authorities.

Failure to comply with the above will result in a €465.87 penalty unless the matter is not resolved within 1 month after receipt of notice from the Registrar. An additional penalty of €23.29 will apply daily if the requested information is not submitted/rejected by the Registrar.

4. Appointment, Removal and Casual Vacancies of Directors (Article 139 & 140)

Proposed directors must either personally sign the M&As or deliver a signed consent to the Registrar. Upon appointment, the director is required to declare that there are no circumstances which could lead to disqualification in any of the Member States.
If the Registrar becomes aware that the person is disqualified or does not hold an appropriate licence, the company must remove the director within 14 days and submit the respective removal form.

If the company fails to comply with the above, the Registrar will file an application in court. The hearing will be set within 30 days and concluded within the following 5 working days. All expenses related to the process must be covered by the company.

5. Disqualification for Appointment as Director or Company Secretary (Article 142)

Provision of directorship/company secretary by corporate service providers which do not hold the necessary authorisation by the Malta Financial Services Authority will lead to immediate disqualification.

Moreover, any disqualification in force or relevant information in this regard in another Member State will be considered and the Registrar may refuse the appointment of such legal/natural person.

6. Additional Duties of the Registrar (Article 401)

Before registering a new company or return, the Registrar may request any information that s/he deems necessary to ensure correctness and completeness of documentation.

Furthermore, s/he will deal with all aspects of online registration and filing, while full access to the Registrar’s website will be provided to competent authorities and subject persons.

Upon consulting with the Minister, the Registrar may issue procedures and guidelines for the implementation of the provisions, which are binding on companies and their officers.

Lastly, when processing personal data, the Registrar should implement appropriate technical measures and safeguards to ensure protection of rights and freedoms of persons involved.

7. Amendment to the Contents of the Annual Return Form (Seventh Schedule)

The email address of the company and the principal area of trading activity must now be also provided in the annual return.

Note: Fenlex Corporate Services Ltd. and Fenlex Management Services Ltd. are licenced by the Malta Financial Services Authority as Company Service Providers.

Should you require any further information or assistance on the matter, please do not hesitate to reach out to us personally on info@fenlex.com

©Fenlex Corporate Services Ltd.

Disclaimer │ The information provided on this update does not, and is not intended to, constitute legal advice. All information, content, and materials available are for general informational purposes only.  This Update may not constitute the most up-to-date legal or other information and you are advised to seek updated advice.

 

Welcome Home Perseverance I

Perseverance I now delivered to its owner in Malta . This brand new Baltic yacht shall soon be made available on the Charter Market .

Fenlex provides comprehensive corporate services to super yacht owners.

#wearefenlex

Fenlex in collaboration with CMBS

Fenlex Corporate Services Ltd. is pleased to announce a collaboration with Central Mediterranean Business School which offers accredited training programmes including ACCA’s Accelerated Work Study Programme.

The ACCA Accelerated Work Study Programme allows students to be in active employment with Fenlex while continuing their ACCA studies. This therefore allows students to gain hands on work experience whilst still building their knowledge and expertise.

Should you be interested in starting your Accounting career with Fenlex contact our HR Department on hr@fenlex.com.

Fenlex assists with sailing yacht Perseverance I acquisition

We are proud to have played a part in the process to acquire, build and deliver to client a brand new custom built Baltic 117 (35.8m) sailing yacht, Perseverance I. The yacht is designed by Dykstra Naval Architects who have described the yacht as “a pilot cutter with timeless elegance”. The interiors, designed by deVosdeVriesDesign, are described as ‘light and contemporary’ interior using stained oak, dark bog oak trims and ‘industrial chic hardware’. The yacht is loaded with the latest technology available with electric diesel engines for silent cruising and smart cabins to minimise and recycle energy used. The yacht will cater for 8 guests and 6 crew.

The yacht shall be registered by our colleagues at Fenech and Fenech Marine Services under the Malta Flag and is expected to arrive in Malta in the latter half of September. Sea trails and testing have shown her to not only be extremely comfortable but an exceptionally fast yacht as well. The yacht will be available for charter after delivery.

#wearefenlex

Fenlex Corporate Services at Industry Talks by ASCS

Claire Scicluna – Director/Head of Compliance and Banking, Nadine Farrugia our Assistant Head of Accounts and William Cassar our Head of Tax Compliance recently participated in an Industry talk organised by ASCS whereby our team shared their personal experience within Fenlex and how the majors they selected complemented their roles today. The talk was intended to give students a practical idea of how their careers could develop after university.