Hello again,
I contacted an accountant regarding malta company formation and 6/7 refundand they informed me of a NEW Substance Rule at the OECD level, I quote:
"It is important that you create value for your Malta company by ensuring that you have some form of substance here in Malta. Due to changes in tax law at a European level (OECD), having a Malta company without substance could be considered to be a “sham” company whereby you simply have a Malta company with an address in Malta though everything else is being handled outside of Malta and this could be considered to be tax avoidance︀ by the foreign tax authorities although that is not your intention. When we talk about︁ substance, we are looking at 3 aspects which you must keep in mind;
Therefore, although from a legal perspective it is fine to have a Malta company without︉ substance, from a tax perspective this would not be possible and could result in future︊ tax challenges by foreign tax authorities."
Anyone know if this is a real thing? They︋ can appoint me a local director for a very expensive fee of 8,000 euros, plus︌ all the other fees involving my company.
I contacted an accountant regarding malta company formation and 6/7 refundand they informed me of a NEW Substance Rule at the OECD level, I quote:
"It is important that you create value for your Malta company by ensuring that you have some form of substance here in Malta. Due to changes in tax law at a European level (OECD), having a Malta company without substance could be considered to be a “sham” company whereby you simply have a Malta company with an address in Malta though everything else is being handled outside of Malta and this could be considered to be tax avoidance︀ by the foreign tax authorities although that is not your intention. When we talk about︁ substance, we are looking at 3 aspects which you must keep in mind;
- Assets –︂ any assets of the company must be owned by the Malta company and held in︃ Malta – domain name, servers or a real time replica of the server, office ect︄
- Risks – all legal risks must be borne by the Malta company and this is︅ done through a legal contract/agreement
- Functions – 50%+ of the board of directors must be︆ individuals resident in Malta, to ensure that the management and control and decision making is︇ being done from Malta. A minimum of 1 employee in Malta would be recommended also.︈
Therefore, although from a legal perspective it is fine to have a Malta company without︉ substance, from a tax perspective this would not be possible and could result in future︊ tax challenges by foreign tax authorities."
Anyone know if this is a real thing? They︋ can appoint me a local director for a very expensive fee of 8,000 euros, plus︌ all the other fees involving my company.
