Income Tax Act (Cap. 123), article 45A

45A. Notwithstanding anything contained in this Act, where: (i) in accordance with the provisions of the Companies Act, a company is converted into a commercial partnership en nom collectif o r a commercial partnership en commandite w h i c h does not make an election to be treated as a company in terms of article 27(6) of the Income Tax Management Act, or Cap. 372. (ii) where a partnership or EEIG referred to in sub- paragraph (iii) of paragraph ( a) or sub-paragraph (ii) of paragraph ( b) of the definition "company" in article 2(1) elects not to be treated any longer a s a c o m p a n y i n t e r m s o f a r t i c l e 2 7 ( 6 ) o f t h e Income Tax Management Act, the following shall apply: (a) it shall be deemed for all the purposes of the Income Tax Acts that any balance of distributable profits allocated to any of the ta x accounts, existing on the day the company ceases to be a company, to have been distributed by way of dividend on the said day and the provisions of articles 61 to 67 shall apply accordingly to such profits; (b) subject to paragraph ( c), it shall be deemed for all the purposes of the Income Tax A cts that no transfer or acquisition of assets has taken place and for the purpose of determining the chargeable income or gains on a transfer of the said assets by the partnership, the cost and date of acquisition taken into account shall be the cost and date as applicab le to the company that has been converted; (c) where the assets of the company ("the chargeable company") include shares i n a company or immovable property situated in Malta which have been acquired from another company ("the transferor") under a transfer which qualified for tax relief under the 154 CAP. 123.] INCOME TAX provisions of articles 5(9) or 5A(4)( f), it shall be deemed for the purposes of articles 5(9A) and 5A(12A) that the chargeable company ceases to be a member of the original group and the provisions of the said articles shall apply accordingly; (d) where the transferor company referred to in the preceding paragraph is conver ted into a partnership, for the purpose of determi ning whether the chargeable company referred to in articles 5(9A) and 5A(12A) ceases to be a member of the original group, it shall be deemed that the conversion had not taken place and such determination shall be made by reference to the same individuals referred to in article 5(9)(iii) taken into account in determining whether the chargeable company and the transfer or company satisfied the provisions of article 5(9)(i) and (iii) on the date of the acquisition referred to in paragraph (c) above; (e) where the company has available for set-off capital losses referred to under article 5(10), such losses shall be carried forward and set off only against capital gains derived by the partnership in the manner prescribed in the said article as would have applied had the conversion not taken place; (f) where the company has available for set-off losses referred to under article 14(1)( g), such losses shall be c a r r i e d f o r w a r d a n d s e t o f f o n l y a g a i n s t t h e t o t a l income derived by the partnership in the manner prescribed in the said article as would have applied had the conversion not taken place. Conversion of a partnership into a company. Added by: IV . 2011.19. Amended by: XIII. 2015.53. Cap. 386. Cap. 372.