RSM Malta’s recent Transfer Pricing Conference brought together leading voices in tax and finance to explore the implications of Malta’s transfer pricing (TP) framework and the evolving relationship between TP and VAT.
The event was formally opened with remarks by William Spiteri Bailey, President of The Malta Chamber of Commerce, Enterprise and Industry, and Manfred Barbara, Director General (Verifications and Audit) at the Malta Tax and Customs Administration.
Both speakers highlighted the strategic importance of transfer pricing reform in Malta’s broader tax modernisation agenda and the need for businesses to embrace transparency and alignment with international standards.
The income tax panel, moderated by Dr Timothy Zammit (Tax and Corporate Partner, RSM Malta), featured insights from Efrem Debono (Founder, TAX/ED), Andrew Seidler (Tax Partner, RSM UK), and Nick Xuereb (Group CFO, Toly Products Ltd).
The discussion centred on Malta’s TP rules introduced in 2024, which align with OECD standards and mark a significant shift in the country’s tax landscape.
The panel unpacked the framework’s scope, targeting large multinational groups with cross-border arrangements and its threshold-driven application.
Key messages included the importance of accurate delineation, where substance over form is paramount, and the need for robust documentation, including Master and Local Files.
The panellists emphasised that documentation is now a company’s first line of defence, and that early implementation is essential to avoid future disputes.
Benchmarking challenges in Malta’s limited market were also addressed, with a call for careful justification when using foreign comparables.
The VAT dimension was introduced by Michela Scicluna, Manager – Indirect Tax Advisory at RSM Malta, who set the stage for a fireside chat between Kenneth Cremona, Senior Manager – Indirect Tax Advisory at RSM Malta and Dunstan Farrugia, Senior Manager at MTCA. Their session focused on “demystifying VAT” in the context of transfer pricing.
The discussion highlighted how TP adjustments, particularly year-end true-ups, can have VAT consequences, especially when they alter the consideration for intra-group supplies. Recent CJEU rulings, including Arcomet and Högkullen, were discussed as pivotal in clarifying when TP adjustments fall within the scope of VAT.
The conversation underscored the need for alignment between TP policies, contracts, invoicing, and VAT reporting, as well as the importance of understanding the economic substance behind transactions.
Throughout the event, a consistent message emerged: transfer pricing is no longer a siloed compliance task; it is a strategic imperative.
As stated by Karen Spiteri Bailey, Managing Partner at RSM Malta, in her keynote speech: “Transfer pricing may be technical, but at its core it is about understanding how businesses really operate. It has evolved beyond a documentation exercise into a key governance and risk management consideration. Today, businesses are expected to demonstrate real substance, clearly showing where value is created, who is making decisions, and how risks are managed in practice. When approached properly, transfer pricing should not be about box ticking, but about aligning tax outcomes with economic reality.”
