The tax treatment of the Collective Investment Scheme depends entitely on how that fund is classified. Maltese law distinguishes between two types of funds, being prescribed funds and non-prescribed funds.
Prescribed Funds
A prescribed fund is one which is incorporated in Malta and which has at least 85% of its assets situated in Malta.
Taxation of such funds is as follows :
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A final witholding tax of 10% is levied on interest, premiums and discounts earned on Maltese Government stocks or bonds, bonds issued by listed companies and income paid by corporate entities.
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A final witholding tax of 15% is levied on bank interest.
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Any income derived by the fund from immovable property situated in Malta is taxed at the normal rate of 35%.
Non-Prescribed Funds
A non-prescribed fund is one which is not incorporated in Malta or which has less than 85% of its assets situated in Malta.
Taxation of such funds is as follows :
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Any income and gains derived by the fund are exempt from income tax, except from income dervied from immovable property in Malta.
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Any income derived by the fund from immovable property situated in Malta is taxed at the normal rate of 35%.
Capital Gains
Any Capital Gains derived through the disposal of a fund, be it either a prescribed or a non-prescribed fund, by a non-resident shareholder, are exempt from tax in Malta.
Dividends
Distributions of dividend by a CIS to a non-resident shareholder are exempt from tax in Malta.
Stamp Duty
Any acquisitons or disposals of securities by a licensed CIS are exempt from any stamp duty in Malta.
VAT
A fund established in Malta is not required to register for VAT, but is not entitled to claim a refund for any VAT.
