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The Anti-Tax Avoidance Directives (ATAD)
The Anti-Tax Avoidance Directives (ATAD) are a set of EU rules designed to combat tax avoidance practices that directly affect the functioning of the internal market. Malta, as an EU member state, has incorporated these directives into its national legislation to align with the broader EU strategy of ensuring fair taxation and reducing opportunities for tax avoidance. At CSB Group, we understand that it may be overwhelming to keep up with the ever-evolving landscape of international taxation. That’s why our team of leading tax experts is ready to assist your business with its respective compliance and regulatory needs.
ATAD 1, implemented in Malta in 2019, introduced several key measures. These include the interest limitation rule, which restricts the deductibility of borrowing costs to 30% of the taxpayer's EBITDA (earnings before interest, tax, depreciation, and amortization). Additionally, the Controlled Foreign Company (CFC) rule was established to prevent profit shifting to low or no tax jurisdictions by attributing the income of a CFC to its parent company. Other notable introductions include the general anti-abuse rule (GAAR), hybrid mismatch rules and exit taxation.
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ATAD 2, effective from January 2020, expanded on the hybrid mismatch rules, addressing mismatches that arise due to differences in the tax treatment of financial instruments, entities, and payments between EU member states and third countries. This directive aims to prevent companies from exploiting these differences to reduce their overall tax liability.
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ATAD 3, which is still under discussion, aims to address issues related to the use of shell entities for tax evasion purposes. The primary focus of ATAD 3 is to ensure that entities within the EU with minimal or no substantial economic activity are not misused for tax benefits. The directive proposes enhanced reporting requirements, stricter substance criteria, and potential sanctions for entities that fail to meet these standards.
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These measures enhance the integrity of the tax system by closing loopholes that multinational companies could use to minimize their tax burden. For businesses operating in Malta, these changes necessitate a thorough review of their tax structures and practices to ensure compliance with the new rules, thereby contributing to a fairer competitive environment within the EU.
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​We understand that tax compliance with European and International Tax rules may be an onerous task however CSB’s Tax Advisory Team is composed of highly skilled professionals and EU and International Tax Experts, including lawyers and accountants, which would be able to advise you in the best possible way in order to tax optimise your tax affairs, in compliance with the ATAD and the Maltese Tax Regulations.
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With over 37 years of experience in commercial services, CSB Group has evolved from its 1987 beginnings in Recruitment and Debt Collection, founded by Chairman Tony Zammit, into a leading Corporate Service Provider.
Now led by Group CEO Michael J. Zammit, CSB Group boasts a global network of international partners and a diverse client portfolio, including entrepreneurs, multinationals, and high-net-worth individuals. With a team of over 100 professionals, the Group’s success is rooted in trust, professionalism, and passion.











