Malta publishes detailed DAC6 guidance

Malta publishes DAC6 guidance

Maltese tax authority issues key guidance on DAC6 reportable cross-border arrangements. The guidance explains key concepts with the help of illustrations.

Malta publishes detailed DAC6 guidance

On January 4, 2020, the Maltese Commissioner for Revenue published detailed guidance on the DAC6 reporting requirement for intermediaries and taxpayers.

The 29-page guidance provides information on intermediaries, relevant taxpayers, reportable arrangements, the hallmarks, information to be reported, and penalties for non-compliance.

The guidance explains these concepts with the help of illustrations.

The guidance notes that the ‘main benefit test’ is an objective one and does not contemplate subjective assessments which would take into account the purpose or intentions of the participants to the arrangement. “Therefore, the fact that a person does not actively seek to obtain a tax advantage will not be a determinative factor when considering whether a cross-border arrangement meets the main benefit test,” it states.

According to the guidance, the term ‘tax advantage’ should be broadly interpreted and includes a repayment of tax, a tax relief, a reduction in the tax charge, a tax deferral or an absence of taxation.

For the purposes of hallmark Category C1(b)(i), tax at the rate of almost zero refers to a nominal rate of tax below one percent.

Information must be filed electronically via an online portal made available by the Commissioner for Revenue. Two filing options will be available: the upload of an XML data file; or the upload of an Excel Sheet.

DAC6 was implemented into Maltese legislation by Legal Notice L.N. 342 of 2019, with effect from July 1, 2020. The Commissioner for Revenue deferred the first reporting deadlines by six months in view of the COVID-19 pandemic.

The author is Alex Hunter, Editor, TP News. He oversees and updates the publication and also  regularly writes news stories about transfer pricing and international tax law. Alex is reachable at