Malta: One-year extension of allowance to transfer unabsorbed capital allowances intra-group

Extension was earlier announced as part of Malta’s budget for 2023

Extension was earlier announced as part of Malta’s budget for 2023

A new legal notice published on 22 February 2023 extends by one year the temporary measure allowing entities with excess capital allowances, as a result of losses suffered during the COVID-19 pandemic, to be surrendered to other group entities and thus to be utilized in basis year 2022 (in addition to basis year 2021).

Such extension was earlier announced as part of Malta’s budget for 2023, presented on 24 October 2022. Read TaxNewsFlash

All conditions tied with this temporary measure have been retained including the cap of €1,000,000 in maximum deductions that can be surrendered and claimed, per group of companies for both basis years 2021 and 2022 (i.e. years of assessment 2022 and 2023). The eligible balances for surrender remained those unabsorbed capital allowances, including balancing allowances, arising in basis years 2020 and 2021.

The notice further clarifies that the surrendered amounts must be equal to the claimed amounts in each year of assessment and must be claimed in the same year of assessment of the surrender.

Read a February 2023 report prepared by the KPMG member firm in Malta


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