Maltese legislation discredits or considers ineffective any scheme that reduces the amount of taxes payable by any person or entity proven to be artificial or fictitious. In such cases, taxation shall be applied in accordance with standards applicable in the absence of such a scheme, without the intended tax advantages.
In addition, any person or entity that obtains or wishes to obtain any advantage as a direct or indirect result of any scheme whose only or main purpose is to reduce or postpone taxation or to obtain any reimbursement or tax compensation, may be subject to taxation in any manner deemed necessary in order to cancel or modify the scheme and the consequential advantage.
“Scheme” refers to any provision, agreement, contract, trust, concession, transfer of assets, increase in shareholder capital and sale of assets, regardless of the date when they were made or configured.
Notwithstanding these general anti-avoidance rules, Maltese legislation provides for the possibility of obtaining an Advance Tax Ruling , through which it is decided that the general anti-avoidance rule shall not apply to a particular case, providing the Commissioner believes that the transaction will be conducted in good faith and for commercial reasons.