Are you ready for the new Transfer Pricing disclosure requirements?

The context 

Very recently, Malta introduced separate Transfer Pricing (“TP”) disclosure requirements, effective from Year of Assessment (‘YA’) 2026 onwards. The primary objective of these requirements is to require taxpayers to self‑assess, in their own view, whether and how their in-scope transactions adhere to the arm’s length principle in accordance with the OECD Transfer Pricing Guidelines (2022), and to quantify any resulting TP adjustment to the chargeable income where the existing transaction values are not at arm’s length.

This marks a significant development for the region, as it is the first time that a TP‑specific submission requirement has been introduced. Until now, the formal TP compliance obligations in Malta were limited to the contemporaneous maintenance of documentation (and submission only upon request) rather than a self-assessment-based submission.

The objective of this article is to break down these new requirements and outline the practical way forward for taxpayers.

What is required?

In simple terms, taxpayers are required to assess which transactions fall within scope and which are out of scope of the Malta Transfer Pricing Framework for the relevant YA. Where a transaction is out of scope, the taxpayer must specify the reason(s) for such classification. For in-scope transactions, detailed disclosures are required.

When does this requirement apply from?

This requirement applies from YA 2026 onwards.

What information must be disclosed for in-scope transactions?

The following information needs to be provided:

• Name of the Associated Enterprise (“AE”);
• Business activity of the AE;
• Tax residence of the AE or, where relevant, the location of the Permanent Establishment;
• Description of the arrangement;
• Indication of whether the arrangement is subject to an Advance Pricing Arrangement (“APA”);
• TIFD code;
• Transaction amounts presented in three separate columns:
  • As per the statutory accounts;
  • As per the tax computation (before any TP adjustments); and
  • Arm’s length amount.
• Adjustment amount, if any;
• TP method used to determine that the transaction is at arm’s length; and
• Any additional information the taxpayer considers relevant for the said in-scope transaction.

What is the deadline for this disclosure?

As this disclosure forms part of the tax return itself, it must be completed and submitted at the time of filing the tax return.

How does this interplay with TP documentation?

This requirement reinforces the need for taxpayers to maintain contemporaneous TP documentation prior to submitting these disclosures. In practice, taxpayers should already have robust analyses and substantiation demonstrating how and on what basis their in-scope transactions comply with the arm’s length principle. This is a core objective of a TP Local File. Needless to mention that there should be an alignment between the transactions and their respective positions adopted in the Local File for the year under consideration and the disclosures made in TRA 135.

The Group Master File while also very essential in the overall scheme of the larger value chain, is primarily intended to provide a high-level overview of the Group to which the taxpayer belongs and is not designed to deep dive at a transactional level.

What are the ideal next steps for businesses?

This exercise should not be viewed as a mere template-filling exercise. Instead, it should be seen to represent the summarised outcome of the taxpayer’s self-assessment of which transactions fall within scope and whether such in-scope transactions comply with the arm’s length principle in accordance with the OECD Transfer Pricing Guidelines (2022).

Accordingly, taxpayers ideally should:

• assess in advance which transactions are in scope;
• ensure that intra-group contracts exist for the said transactions as they give the transaction a legal/contractual form and they are the starting point for any TP analysis;
• ensure that the TP policies governing those transactions align with the arm’s length principle;
• reassess actual financial outcomes and not just policy-level pricing to confirm arm’s length results; and
• finalise TP documentation before submitting the required disclosures.

Our team of dedicated TP professionals, with comprehensive experience across a broad range of industries, stands ready to assist businesses in navigating the implications of this new development.