Tax Sharing Agreement for Malta

Tax Sharing Agreement Template for Malta

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Tax Sharing Agreement

"I need a Tax Sharing Agreement under Maltese law for a parent company and its three local subsidiaries in the financial services sector, to be effective from January 1, 2025, with specific provisions for handling tax credits and consolidated tax returns."

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What is a Tax Sharing Agreement?

Tax Sharing Agreements are essential instruments for corporate groups operating in Malta, particularly those with multiple subsidiaries or complex organizational structures. These agreements become necessary when group companies wish to efficiently manage their collective tax obligations while ensuring compliance with Maltese tax laws and EU regulations. The Tax Sharing Agreement specifically outlines how tax liabilities, benefits, and credits are to be allocated among group members, including mechanisms for payments, information sharing, and dispute resolution. It's particularly relevant in the context of Malta's tax system, which offers various benefits for corporate groups, including the full imputation system and tax refund mechanisms. The document must align with Malta's Income Tax Act, VAT legislation, and relevant EU directives, while also considering any applicable double taxation treaties.

What sections should be included in a Tax Sharing Agreement?

1. Parties: Identification and details of all parties entering into the tax sharing agreement

2. Background: Context of the agreement, including the group structure and reason for tax sharing arrangement

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules for interpretation

4. Tax Sharing Principles: Core principles governing how tax liabilities and benefits will be shared between parties

5. Calculation of Tax Liabilities: Methodology for calculating individual and group tax liabilities

6. Payment Terms and Mechanisms: Timing and methods for making tax-related payments between parties

7. Record Keeping and Information Sharing: Requirements for maintaining tax records and sharing relevant information

8. Compliance Obligations: Parties' obligations regarding tax compliance and reporting

9. Dispute Resolution: Procedures for resolving disputes related to tax calculations or payments

10. Term and Termination: Duration of the agreement and circumstances for termination

11. Governing Law and Jurisdiction: Specification of Maltese law as governing law and jurisdiction

What sections are optional to include in a Tax Sharing Agreement?

1. International Tax Provisions: Additional provisions for cross-border tax implications, required when parties operate in multiple jurisdictions

2. VAT Grouping Arrangements: Specific provisions for VAT group registration and administration, needed when parties form a VAT group

3. Tax Audit Procedures: Specific procedures for handling tax audits, recommended for larger group structures

4. Change in Law Provisions: Mechanisms for dealing with changes in tax legislation, important for long-term agreements

5. Data Protection Compliance: Specific GDPR compliance measures for handling tax-related personal data

6. Exit Provisions: Detailed procedures for handling exit of group members, needed for larger corporate groups

7. Tax Credits and Incentives: Provisions for sharing tax credits and incentives, relevant when parties qualify for special tax treatments

What schedules should be included in a Tax Sharing Agreement?

1. Schedule 1 - Group Structure Chart: Detailed diagram showing the corporate structure of all participating entities

2. Schedule 2 - Tax Calculation Methodology: Detailed formulas and examples for calculating tax allocations

3. Schedule 3 - Payment Procedures: Specific procedures and timelines for making tax-related payments

4. Schedule 4 - Information Requirements: List of required information and documents for tax calculations

5. Schedule 5 - Excluded Taxes: List of taxes not covered by the sharing arrangement

6. Appendix A - Pro-forma Calculations: Example calculations showing how the tax sharing mechanism works

7. Appendix B - Compliance Calendar: Annual timeline of tax compliance obligations and deadlines

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Relevant Industries

Financial Services

Banking

Insurance

Investment Services

Gaming and iGaming

Manufacturing

Retail and Distribution

Professional Services

Technology and Software

Real Estate and Property

Maritime and Shipping

Telecommunications

Relevant Teams

Finance

Legal

Tax

Treasury

Compliance

Risk Management

Corporate Governance

Accounting

Internal Audit

Corporate Affairs

Relevant Roles

Chief Financial Officer

Tax Director

Financial Controller

Group Finance Manager

Tax Manager

Corporate Lawyer

Legal Counsel

Company Secretary

Finance Director

Compliance Officer

Tax Accountant

Group Treasurer

Financial Planning Manager

Tax Consultant

Risk Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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