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DC Field | Value | Language |
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dc.date.accessioned | 2019-05-09T12:43:43Z | - |
dc.date.available | 2019-05-09T12:43:43Z | - |
dc.date.issued | 2018 | - |
dc.identifier.citation | Micallef, J. (2018). The implications of introducing a notional interest deduction : a local perspective (Master’s dissertation). | en_GB |
dc.identifier.uri | https://www.um.edu.mt/library/oar//handle/123456789/42991 | - |
dc.description | M.ACCTY. | en_GB |
dc.description.abstract | Background and Purpose: Following the European Commission’s (2013) recommendation of reducing the local debt-equity bias, the Maltese Minister of Finance announced, in the 2017 Budget, the introduction of a NID (Notional Interest Deduction) which would have the primary aim of putting debt- and equity-financed companies on a similar footing., On 5th October 2017, the long awaited NID rules were published by means of the enactment of Legal Notice 262 of 2017, which was eventually replaced by Legal Notice 37 of 2018 on 2nd February 2018. In light of the above, the main purpose of this study is to investigate the implications of the NID on Maltese entities and other key stakeholders, whilst also assessing its effectiveness in reducing the debt bias on a local front. Design: Given the exploratory and explanatory nature of this study, a qualitative approach was deemed to be most suitable to address the research questions. In particular, twenty-five semistructured interviews were carried out with local tax practitioners, CFOs of Malta-based entities, stock brokers as well as key Government officials so as to obtain different viewpoints on the implications of the NID and its effectiveness in reducing the debt bias locally. This was further complemented by several scenario analyses, mapped out by the researcher, which were deemed necessary so as to facilitate the reader’s understanding of the topic at hand and provide a computational illustration of the potential practical effects of this new fiscal measure on entities and other stakeholders. Findings: From the scenario analyses carried out, substantiated by the discussions held with all participants, it clearly emerged that this deduction is expected to be solely beneficial to foreignowned entities in Malta with no tax inducement being envisaged for local companies. With respect to the NID effectiveness in reducing the debt bias, the numerical scenarios supported by the research findings revealed that, whereas the personal debt bias for a non-resident investor is almost completely abolished; that for a resident investor is significantly increased post the implementation of the NID due to the deemed interest income alongside the deemed distribution rules. Nonetheless, at a corporate level, the NID is seen by many practitioners as an effective tool for the reduction of the corporate debt bias, except in some extreme scenarios. Conclusion: In light of whether the NID is the ideal corrective measure to address the debt bias, research revealed that non-tax measures should also be implemented to achieve this fundamental objective. Value: I strongly believe that this study can be of a value-adding nature to taxation research, both on a local as well as on an international front. The findings as well as the concluding remarks of this study could provide interesting insights that can aid local fiscal policy makers and the Government in the implementation of the NID as well as shed light on its way forward in the local context. | en_GB |
dc.language.iso | en | en_GB |
dc.rights | info:eu-repo/semantics/restrictedAccess | en_GB |
dc.subject | Corporations -- Taxation -- Malta | en_GB |
dc.subject | Notional Interest Deduction -- Malta | en_GB |
dc.subject | Corporations -- Finance -- Law and legislation -- Malta | en_GB |
dc.title | The implications of introducing a notional interest deduction : a local perspective | en_GB |
dc.type | masterThesis | en_GB |
dc.rights.holder | The copyright of this work belongs to the author(s)/publisher. The rights of this work are as defined by the appropriate Copyright Legislation or as modified by any successive legislation. Users may access this work and can make use of the information contained in accordance with the Copyright Legislation provided that the author must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the prior permission of the copyright holder. | en_GB |
dc.publisher.institution | University of Malta | en_GB |
dc.publisher.department | Faculty of Economics, Management and Accountancy. Department of Accountancy | en_GB |
dc.description.reviewed | N/A | en_GB |
dc.contributor.creator | Micallef, Jade | - |
Appears in Collections: | Dissertations - FacEma - 2018 Dissertations - FacEMAAcc - 2018 |
Files in This Item:
File | Description | Size | Format | |
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18MACC070.pdf Restricted Access | 2.22 MB | Adobe PDF | View/Open Request a copy |
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