S.L. 123.207 Art. 7Use of the arm’s length amount.

Where:

(a) the total income of a person liable to tax in Malta is computed such that, instead of the actual amount incurred, due, accrued or derived under the terms of an arrangement, the arm’s length amount in relation to that arrangement were incurred, due, accrued or derived as the case may be; and

(b) any other party to the arrangement is liable to tax in Malta and the arrangement is relevant in ascertaining the total income of that person, then, subject to this rule, the total income of any person referred to in paragraph (b) shall be computed as if, instead of the actual amount incurred, due, accrued or derived under the terms of the arrangement, the arm’s length amount in relation to that arrangement were incurred, due, accrued or derived as the case may be.