Author: Mel Chamber

Bank of Valletta (BOV) and the University of Malta (UM) have entered into a strategic five-year agreement aimed at strengthening collaboration on joint research initiatives and providing new career opportunities for students. This partnership represents a significant investment in Malta’s future workforce, linking academic potential with real-world work experience in a fast-changing financial landscape.

The Memorandum of Understanding was signed by Professor Alfred J. Vella, Rector of the University of Malta, the Dean of FEMA, Prof. Emanuel Said, the Dean of the Faculty of ICT, Prof. Ing. Carl James Debono, and Ray Debattista, BOV’s Chief People and Culture Officer, in the presence of Antoine Aquilina, Chief Information Security Officer at the Bank.   

This agreement brings together Malta’s longest-standing academic institution and Malta’s leading financial services provider, creating new opportunities at the intersection of education and industry. The University of Malta, with over 400 years of academic excellence, continues to drive innovation through its forward-looking faculties. Bank of Valletta, on its part as Malta’s Bank of Choice is evolving in step with the financial world, offering a wide range of specialist areas of employment from risk management, cybersecurity, and digital transformation to sustainability finance, customer experience, and data science.

Speaking at the signing, Professor Alfred J. Vella, Rector of the UM, said, “This agreement strengthens our ties with one of Malta’s most prominent financial institutions. We believe in bringing together academic knowledge and real-world experience, and this partnership provides a platform for students to view firsthand the demands and opportunities of the evolving financial sector.”

Ray Debattista added, “We’re proud to collaborate with the University of Malta to attract and develop the next generation of talent. This agreement highlights BOV’s commitment to nurturing local talent and reflects our belief in long-term investment in people, adding value not only to the Bank but to the wider student community, cementing its role as a future-focused, inclusive employer of choice.”

The Faculty of Economics, Management and Accountancy and the Faculty of Information and Communication Technology at UM will lead the academic engagement in collaboration with BOV’s Risk Management function.

HSBC Malta Foundation and Nature Trust announce the successfully conclusion of the first phase of the Freshwater Crab Conservation Project – a multi-year initiative aimed at protecting one of Malta’s most ecologically unique and vulnerable species.

Launched in 2019 with a €40,000 donation from the HSBC Malta Foundation, the project was structured in two distinct stages: species-specific research and habitat assessment.

Led by Mr Ray Caruana from Aquatic Resources Malta, the first stage focused on studying the freshwater crab (Potamon fluviatile) population in Baħrija. Juvenile crabs were raised in a controlled environment at the former Aquaculture Directorate Research Centre. Researchers monitored behaviour, climate adaptability, feeding patterns, and social interaction, while also collecting data on territory size, stress factors, and water quality.

The second stage, carried out by Adi Associates Environmental Consultants Limited and Dr Eman Calleja, evaluated the Baħrija valley ecosystem. Environmental consultant Mr Adrian Mallia explained that the assessment included detailed studies of water resources, ecosystem resilience, and human impact on the area. Stakeholder consultations informed a comprehensive action plan for habitat restoration and conservation.

Vincent Attard, President of Nature Trust – FEE Malta, said: “With a solid foundation of scientific data now in place, we are actively engaging with the Environment and Resources Authority and exploring partnerships to prepare a full EU funding proposal. The next phase will aim to implement practical conservation actions and long-term habitat protection measures in the face of climate change.”

Dr Paula Mamo, Deputy Chair of the HSBC Malta Foundation, added: “Thank you to everyone involved in bringing Phase One of this project to a successful close. This is a powerful reminder of what can be achieved when dedicated people work together for nature. We’re proud to have kickstarted this initiative, which we hope will now move into an even more ambitious second phase.”

The next phase of the project will focus on implementing direct conservation interventions, restoring critical habitats, and developing long-term strategies to ensure the survival of Malta’s freshwater crab species.

The BOV Volleyball Marathon in aid of id‑Dar tal‑Providenza is back with 53 hours of non‑stop play in the Home’s Siġġiewi car park. The 15^th edition of the marathon will get under way by H.E. Dr Myriam Spiteri Debono, President of Malta, on Friday 18^th July at 6.30pm and end at midnight of Sunday July 20^th 2025. Forty players, selected after six weeks of training, will form 5 teams and enter the challenge of fifty‑three hours of continuous volleyball not for any personal gain but to help others.

In a short address, Mgr Martin Micallef, Director of Id‑Dar tal‑Providenza,

during the presentation of the players to the media said that this year we are celebrating the 15th edition of this marathon as well as the 60th anniversary of the Home. He spoke about the dire need of funds with which Id‑Dar tal‑Providenza can continue offering the residential services it offers to 115 persons. He revealed that the Home is in the process of opening more homes in the community. He urged one and all to attend this activity and support the players that enter this challenge with a lot of dedication and commitment.

In a comment to the media, Mr Ernest Agius, BOV’s Chief Operations Officer, said that this marathon is more than a game – it is a testament to the power of unity. When sport meets solidarity, we build a stronger, more compassionate Malta. At BOV, we are proud to stand beside those who never stop believing in a just and better society.

On Friday, Saturday and Sunday evenings between 9.00pm and midnight there will be live entertainment provided by local singers and bands on the main stage purposely built in the car park. On Friday Zone 5 will be performing, on Saturday it’s the turn of the Kantera folk band whilst on Sunday night the Spiteri Lucas Band will provide the entertainment.

The public may make a donation by calling on the following numbers, use the BOV Mobile Banking or PayPal or make a donation online through the Home’s bank accounts. For more information you may visit the site: www.sabihlitaghti.org

€15         5170 2012
€25         5180 2013
€50         5190 2070
€100       5130 2044
Pledge Line: 2146 3686
BOV Mobile  7932 4834

The HSBC Malta Foundation is proud to support Inter Insulas: Archives as Bridges Between Malta and Sicily, an upcoming symposium organised by the Notarial Archives Foundation which will bring together archival professionals from Malta and Sicily. Scheduled for 15 October 2025 at the University of Malta’s Valletta Campus, the full-day symposium represents the first formal collaboration of its kind between the Notarial Registers Archive in Valletta and the Archivio di Stato di Palermo.

Thanks to the Foundation’s sponsorship, a multi-disciplinary team from Palermo – including archivist Dr Francesca di Pasquale, communications specialist Dr Floriana Giallombardo, and conservator Dr Sophie Bonetti – will travel to Malta to share their knowledge and experience. They will join other professionals who, through their work or research, have explored connections between Malta and Sicily, offering a programme of talks and discussions on archival science, conservation, community engagement, and the cultural and historical ties between the two islands.

“The HSBC Malta Foundation has long supported the preservation and promotion of Malta’s documentary heritage,” said Geoffrey Fichte, Chairperson of the HSBC Malta Foundation. “We are delighted to once again support the Notarial Archives Foundation in its mission to safeguard and share the rich historical records in its care. This symposium marks an important step in building cross-border partnerships that can elevate archival standards on both sides of the channel.”

Dr Joan Abela, President of the Notarial Archives Foundation, expressed gratitude for the continued support. “This symposium would not be possible without the HSBC Malta Foundation, whose ongoing commitment and support has been instrumental in aiding our mission. We are thrilled to welcome our colleagues from Palermo, alongside other professionals with a shared interest in the heritage of Malta and Sicily, to provide a platform for learning and collaboration that is open to a wide audience in the heritage sector.”

The event is expected to welcome over 150 attendees and will be open to the public.

For more information and to book, visit this registration form.

Two iconic paintings by Maltese master Giuseppe Briffa have been beautifully restored and reinstated at San Ġwann Parish Church, thanks to the support of the BOV Foundation.

The artworks, The Immaculate Conception within the context of the fall of humanity and The Annunciation of the Virgin by the Archangel Gabriel, were unveiled during a visit by Ernest Agius, Chief Operations Officer at Bank of Valletta, representing the BOV Foundation. He was joined by Charles Azzopardi, Head CSR at the Bank, together with PrevArti founder and lead conservator Pierre Bugeja and Parish Priest Fr Bertrand Vella.

The restoration project was entrusted to PrevArti, which carried out a thorough conservation process to address flaking paint, surface grime, yellowed varnish, and structural weaknesses. The treatment included paint layer consolidation, delicate cleaning, removal of overpainting, and fine retouching, all of which helped revive the rich detail and luminosity of Briffa’s original compositions.

“These paintings are more than devotional pieces—they are cultural treasures,” said Ernest Agius. “The BOV Foundation is proud to contribute to projects that safeguard Malta’s heritage and ensure these artistic works continue to inspire future generations.”

Pierre Bugeja remarked on the value of preserving Briffa’s legacy, noting that “These are historically and artistically significant works. Our aim was to respect the artist’s original vision while ensuring the paintings are structurally and visually sound for years to come.”

The project is part of a wider commitment by the BOV Foundation to invest in the cultural fabric of Malta, recognising that the conservation of sacred art not only preserves the nation’s artistic heritage but also reinforces a shared sense of identity and community. By supporting such initiatives through its dedicated Foundation, the Bank helps bridge the past with the present – ensuring that historical narratives, spiritual symbolism, and artistic mastery remain accessible and appreciated by all.

Fr Bertrand extended his appreciation to all those involved in the initiative, noting the renewed beauty and reverence the paintings now bring to the sacred space of the church of Our Lady of Lourdes in San Ġwann.

Bank of Valletta, through its Foundation and CSR programmes, remains committed to supporting the arts, culture, and the preservation of Malta’s historical and artistic legacy.

Introduction

On 11 March 2025, the Council of the European Union formally adopted the VAT in the Digital Age (ViDA) package – a major reform set to modernise VAT rules across the EU. ViDA is structured around three key pillars:

1. E-invoicing and Digital Reporting Requirements (DRR);
2. Platform Economy;
3. Single VAT registration.

These reforms, adopted under Council Directive (EU) 2025/516, will be implemented in phases to allow for a manageable transition across the EU.

Purpose of ViDA reforms

The transformation of the digital economy has exposed the structural limits of the EU VAT framework. Traditional VAT systems were not designed to capture the speed, volume, and complexity of today’s digital transactions, nor to leverage the vast amounts of data these transactions generate. As a result, businesses face a growing disconnect between how they operate digitally and how they are expected to comply with outdated VAT reporting obligations. The VAT in the Digital Age (ViDA) initiative, introduced through Council Directive (EU) 2025/516, addresses this mismatch by reshaping the Union’s VAT rules to align with modern digital realities. It does so by targeting friction points such as fragmented reporting systems, platform economy gaps, and the inefficiencies arising from multiple VAT registrations across Member States.

A core driver behind these reforms is the need to combat systemic VAT fraud and reduce the staggering EUR 93 billion VAT gap, of which EUR 40–60 billion is linked to intra-Community fraud. ViDA introduces a Union-wide digital reporting requirement (DRR) based on structured electronic invoicing, enabling real-time transaction-level data sharing between Member States. This harmonised system enhances tax authority oversight and reduces compliance costs for cross-border businesses, while offering the deterrent effect of automated cross-matching capabilities. The reform not only responds to citizen demands for fairer tax practices but also strengthens the integrity of the internal market by standardising reporting expectations across the EU. For businesses, this is both a compliance obligation and an opportunity to automate and future-proof VAT processes.

Summary of Key Upcoming Changes

Pillar 1 – E-Invoicing and Digital Reporting Requirements (DRR)

• From 1 July 2030, e-invoicing will become mandatory for cross-border B2B transactions within the EU.
• Invoices must be issued within 10 days from the chargeable event and transmitted digitally in real time or near real time to the tax authorities, using the European Standard (EN 16931).
• Member States must implement the new Digital Reporting Requirements from 1 July 2030. However, those with domestic real-time reporting systems in place or authorised before 1 January 2024 may defer implementation until 1 January 2035.These changes are aimed at enhancing VAT transparency and improving fraud detection, while also laying the groundwork for a digital and harmonised VAT system across the EU.

Pillar 2 – Platform Economy

• From 1 July 2028, digital platforms facilitating short-term accommodation rentals (up to 30 consecutive nights) or passenger transport by road within the EU will be treated as deemed suppliers, meaning they will be regarded as having received and re-supplied such services themselves.
• This rule applies only where the underlying supplier fails to provide a valid VAT identification number and does not declare that they will charge the VAT due.
• SMEs and certain exceptions will apply, but due diligence and reporting requirements for platforms will intensify.
• Additionally, the place of supply of facilitation services provided by platforms to non-taxable persons will, from 1 July 2028, be aligned with the place of the underlying transaction (Article 46a), avoiding mismatches in VAT treatment across Member States.

These measures seek to create a fairer VAT environment by ensuring that digital platforms play their part in VAT collection where suppliers are not registered or not charging VAT.

Pillar 3 – Single VAT Registration

• From 1 January 2027, the OSS scheme expands to include B2C supplies of electricity, gas, and heating.
• From 1 July 2028, it will be further expanded so as to cover supplies of goods with installation as well as movement of own goods across Member States. As a result, the call-off stock simplification will phase out between 30 June 2028 and 30 June 2029.
• A mandatory reverse charge mechanism will apply to B2B supplies by non-established and non-identified suppliers where the customer is VAT identified in the Member State of supply. Member States may extend this to additional B2B supplies at their discretion (Article 194).

These specific measures are set to allow businesses that operate across different Member States to register for VAT just once within the EU, thus reducing compliance costs and administrative burdens.

Key Implementation Timeline

Date	Pillar/s	Reform Highlights
12 April 2025 (Entry into force)	–	Entry into force. Domestic e-invoicing permitted without EU derogation. EC to adopt anti-fraud rules under IOSS including Unique Consignment Numbers.
1 January 2027	3	OSS extended to B2C energy supplies.
1 July 2028	2 & 3	Deemed supplier rules for platforms (may be delayed to 01 January 2030) OSS extended to transfers of own goods and goods with installation Mandatory reverse-charge for certain B2B transactions.
1 July 2030	1	E-invoicing and DRR becomes mandatory for cross-border B2B transactions.
1 January 2035	1	Deadline for aligning national DRR/e-invoicing systems with EU rules.

Immediate Measures in more detail – from April 2025

1. Domestic e-invoicing [Articles 218(2) and 232(2)]

With the ViDA coming into force, Member States are allowed to mandate the use of e-invoicing for certain domestic transactions involving businesses established within their jurisdiction, without needing prior approval from the EU. This move empowers individual Member States to accelerate the adoption of digital invoicing at their own pace.

Additionally, countries that opt to implement this requirement may also waive the need for customer consent to receive e-invoices.

Importantly, these provisions do not create any obligation to implement digital reporting systems alongside e-invoicing. Member States retain full discretion to introduce reporting systems either independently or in conjunction with e-invoicing.

Until 1 July 2030, specifically for domestic transactions, national tax authorities may continue to define their own e-invoicing formats, meaning they are not required to align with the EU’s standard (EN16931) and this flexibility may remain even beyond that date for domestic transactions.

1. Improvements to the IOSS framework [Article 143(1a)]

In addition, with effect from April 2025, measures to improve the Import One-Stop Shop (IOSS) have been implemented.

One such measure is the introduction of a Unique Consignment Number (UCN) for every IOSS transaction. This number, generated through an EU-managed system, will be linked to the supplier’s IOSS VAT identification number and will change with each consignment. Customs authorities will use this number to cross-check transactions against the EU’s central database. Only after successful verification will the goods be cleared under the IOSS scheme.

These controls are designed to improve traceability and compliance, reducing the risk of VAT fraud in cross-border low-value imports.

Next Steps

The progressive implementation of the ViDA package over the next decade is set to bring significant changes for businesses and Member States alike.

In particular, for businesses engaged in cross-border operations, early preparation is crucial. The potential financial and operational impacts must be assessed promptly and they should actively liaise with tax authorities as well as professionals to stay updated on requirements, training and developments. In addition, platform based businesses should assess how the deemed supplier rules could impact their current business models.

Although the short-term adjustments may require investment and adaptation, the long-term benefits of ViDA are clear – simplified VAT compliance, fewer VAT registrations, enhanced fraud protection and a more harmonised digital VAT system across the EU. By acting now, businesses can not only stay ahead of the regulatory curve but also position themselves to take full advantage of a more streamlined and future-ready VAT framework.

---

Authors: Brandon Gatt, Partner, Zampa Partners & Nicole Zammit Fenech, VAT Senior, Zampa Partners

Understanding Transfer Pricing

Transfer Pricing governs how related entities within a multinational group price transaction between themselves. These transactions may include the sale of goods, provision of services, licensing of intellectual property, or financing arrangements. The objective, rooted in the OECD’s arm’s length principle, is to ensure that intra-group transactions reflect prices that independent parties would have agreed upon under comparable circumstances. This principle serves to allocate profits fairly for corporate income tax purposes based on functions performed, risks assumed, and assets employed by each entity.

The Role of Transfer Pricing Adjustments

Transfer Pricing adjustments serve as corrective mechanisms to ensure that intra-group transactions comply with arm’s length standards. Such adjustments may arise proactively by taxpayers through compensating adjustments prior to filing tax returns or retroactively by tax authorities through primary, secondary, or corresponding adjustments following audits. In some cases, adjustments are built contractually into profit equalization mechanisms. While their primary purpose is to realign profits for income tax, these adjustments may raise VAT questions when they involve actual financial flows or re-invoicing.

The VAT Framework: Defining the Scope

The scope of VAT is governed by Article 2(1) of the VAT Directive, which applies VAT to supplies of goods or services for consideration by a taxable person acting as such. While Transfer Pricing focuses on market comparability, VAT operates differently, relying on the actual consideration paid, known as the subjective value principle. In other words, VAT typically taxes what is paid, not what might have been paid under arm’s length conditions. Nonetheless, where Transfer Pricing adjustments lead to actual payments; the question arises whether these payments constitute taxable consideration for VAT purposes.

The issue has been extensively discussed by EU bodies, including the VAT Committee and the VAT Expert Group. Their consistent message is that there is no universal rule: each transaction must be analysed on a case-by-case basis, focusing on its economic and contractual substance.

Determining the Taxable Amount: Articles 73 and 80 of the VAT Directive

The taxable amount for VAT purposes is primarily determined by Article 73 of the VAT Directive, which states that VAT is due on everything received as consideration for the supply of goods or services. This subjective approach forms the foundation of VAT. However, Article 80 of the VAT Directive introduces an anti-abuse mechanism allowing Member States, under narrowly defined circumstances, to substitute open market value in cases involving related parties where tax evasion or avoidance is suspected. Outside these limited exceptions, the VAT system remains firmly rooted in the principle of taxing actual consideration rather than hypothetical market-based adjustments.

When Do Transfer Pricing Adjustments Affect VAT?

The VAT consequences of Transfer Pricing adjustments depend on several interrelated factors. Critical aspects include the existence of a contractual obligation to make adjustments, whether the payments can be clearly allocated to specific supplies, whether financial records reflect these adjustments, and whether the adjustments constitute additional consideration for goods or services already supplied. If adjustments are solely designed to align profit levels for corporate income tax, without altering agreed consideration or triggering payments linked to specific supplies, they generally remain outside the scope of VAT. Conversely, where adjustments involve actual payments directly linked to prior or ongoing supplies, VAT implications may arise.

The CJEU’s Current Focus: The Pending Arcomet Towercranes Case

The pending Arcomet Towercranes case (C-726/23) before the Court of Justice of the European Union (CJEU) provides a direct examination of these questions. In that case, intra group payments calculated under the Transactional Net Margin Method (“TNMM”) following the OECD Transfer Pricing Guidelines were scrutinised for VAT purposes. Advocate General Richard de la Tour has proposed that where intra-group services are identifiable, contractually agreed, and actually performed, the resulting payments should be regarded as consideration for supplies of services subject to VAT. This approach emphasizes that contractual clarity, economic substance, and real financial flows are the determining factors in assessing VAT liability, not the mere application of Transfer Pricing methodologies.

A Careful Path Forward

The interplay between Transfer Pricing and VAT demands careful legal and commercial assessment. Transfer Pricing adjustments do not automatically trigger VAT consequences. Instead, each scenario must be analysed individually, considering the contractual agreements, financial flows, and economic realities of the transactions involved. As the CJEU continues to clarify this complex relationship, businesses and VAT professionals must remain attentive, ensuring that Transfer Pricing compliance aligns not only with direct tax obligations but also with VAT requirements.

---

Authors: Brandon Gatt, Partner, Zampa Partners & Eduard Sorin Maxim, VAT Senior, Zampa Partners