S.L. 123.212 чл. 10Initial phase of exclusion from the IIR and UTPR of MNE groups and large-scale domestic groups. 24 [S.L. 25

(1) The top-up tax due by an ultimate parent entity located in Malta in accordance with Article 5(2) of the European

Union Global Minimum Tax Directive, or by an intermediate parent entity located in Malta in accordance with Article 7(2) of the European

Union Global Minimum Tax Directive when the ultimate parent entity is an excluded entity, shall be reduced to zero (0):

(a) in the first five (5) years of the initial phase of the international activity of the MNE group, notwithstanding the requirements laid down in Chapter V of the European Union Global Minimum Tax Directive; TAXATION FOR MULTINATIONAL ENTERPRISE GROUPS 123.212 AND LARGE-SCALE DOMESTIC GROUPS

(b) in the first five (5) years, starting from the first day of the fiscal year in which the large-scale domestic group falls within the scope of these regulations for the first time.

(2) Where the ultimate parent entity of an MNE group is located in a third-country jurisdiction, the top-up tax due by a constituent entity located in Malta in accordance with Article 14(2) of the European Union Global Minimum Tax Directive shall be reduced to zero (0) in the first five (5) years of the initial phase of the international activity of that MNE group, notwithstanding the requirements laid down in Chapter V of the European Union Global Minimum Tax Directive.

(3) (a) An MNE group shall be considered to be in the initial phase of its international activity if, for a fiscal year:

(i) it has constituent entities in no more than six (6) jurisdictions; and

(ii) the sum of the net book value of the tangible assets of all the constituent entities of the MNE group located in all jurisdictions other than the reference jurisdiction does not exceed fifty million euro (€50,000,000).

(b) For the purposes of sub-regulation (1)(a)(ii), "reference jurisdiction" shall mean the jurisdiction in which the constituent entities of the MNE group have the highest total value of tangible assets in the fiscal year in which the MNE group originally falls within the scope of the European Union Global Minimum Tax Directive. The total value of tangible assets in a jurisdiction shall be the sum of the net book values of all tangible assets of all the constituent entities of the MNE group that are located in that jurisdiction.

(4) (a) The period of five (5) years referred to in sub-regulation (1)(a) and in sub-regulation (2) shall start from the beginning of the fiscal year in which the MNE group originally falls within the scope of the European Union Global Minimum Tax Directive.

(b) For MNE groups that are within the scope of the European Union Global Minimum Tax Directive when this came into force, the five (5) year period referred to in sub-regulation (1)(a) shall start on 31st December 2023.

(c) For MNE groups that are within the scope of the European Union Global Minimum Tax Directive when this came into force, the five (5) year period referred to in sub-

regulation (2) shall start on 31st December 2024.

(d) For large-scale domestic groups that are within the scope of these regulations when these come into force in terms of regulation 1(2), the five (5) year period referred to in st sub-regulation (1)(b) shall start on 31 December 2023.

(5) The designated filing entity referred to in regulation 5 which is located in Malta shall inform the Commissioner of the start of the initial phase of the MNE group’s international activity by no later than twelve (12) months after the last day of the reporting fiscal year:

Provided that such notification shall be made to the Commissioner on such form and in such manner as the Commissioner shall determine.