Duty on Documents and Transfers Act (Cap. 364), article 47

47. (1) Acquisitions or disposals for any reason whatsoever of marketable securities or of an interest in a partnership by the persons defined in sub-articles (3) and (4) and trusts and fiduciary arrangements referred to in sub- article (3)(e) shall be exempt from the provisions of this Act. (2) Acquisitions or disposals for any reason whatsoever of marketable securities or of an interest in a partnership issued by the persons defined in sub-articles (3) and (4) shall be exempt fro m the provisions of this Act. For the purpose of this article acquisitions or disposals of marketable securities shall incl ude a transfer of real value in marketable securities as refe rred to in article 42(1)( d). (3) The persons refer red to in sub-articl es (1) and (2) are: Cap. 370. (a) collective investment schemes holding a collective investment scheme licence under the Investment Services Act ; Cap. 370. (b) persons holding an investme nt services licence issued under the Investment Services Act , and whose activities comprise the p rovision of management, administration, safekeepin g, or investment advice to 44 CAP. 364.] DUTY ON DOCUMENTS AND TRANSFERS collective investment schemes as defined in the aforesaid Act; (c) Deleted by Act VIII.2020.48. (d) companies and partnerships falling within the scope of sub-article (4); Cap. 123. Cap. 386. (e) a trust or fiduciary arrangement the income of which qualifies for exemption in terms of article 12(1)(d) of the Income Tax Act and whose beneficiarie s consist solely of individuals who are not resident in Malta, or a company or partnership, which satisfies t h e provisions of sub-article (4)(a), where the trustee, fiduciary, company or partnership, as the case may be, proves to the satisfaction of the Commissioner that the trust, fiduciary arrangement, company or partnership carries on, or intends to carry on (within a reasonable time frame as may be applicable), business, or has, or intends to have ( w i t h i n a r e a s o n a b l e t i m e f r a m e as may be applicable), business interests to the extent of more than ninety percent (90%) outsi de Malta, by demonstrating that it satisfies such conditions as to t h e Commissioner may appear appropriate: Provided that the holding of marketable securities in a company or companies referred to in paragraphs (c), (d) or (e) or holding of an interest in a part nership referred to in paragrap hs (d) or (e), as the case may be, and the carrying on of business activi ties therewith shall be deemed to cons titute business interests outs ide Malta: Provided further that for t he purpose of determining whether a company or partnership referred to in article 384 of the Companies Act satisfies the provisions of this paragraph, only such company’s or partnership’s operations in Malta shall be taken i nto consideration. (4) A company or partnership, as the case may be, is a company or partnership falling within sub-article (3)(d) if: (a) in the case of a company, more than half of the company’s ordinary share capital, voting rights and rights to profits or in the case of a partnership, more than half of the partnership ’s capital, voting rights and rights to profits are held by: (i) any person who is not resident in Malta and who is not owned and controlled by, directly or indirectly, nor acts on behalf of, an individual or individuals, who are ordinarily resident and domiciled in Malta; or (ii) a trustee of a trust the beneficiaries of which are all persons who are not resident in Malta and who are not owned and controlled by, directly or indirectly, nor act on behalf of, an individual or DUTY ON DOCUMENTS AND TRANSFERS [CAP. 364. 45 individuals, who are ordinarily resident and domiciled in Malta; and (b) such company or partnership has been determined by the Commissioner as having the majority of its business interests outside Malta. (5) A company or partnership which is not owned and controlled by, directly or indirectly, nor acts on behalf of, an individua l or individuals, who are ordinarily resident and domiciled in Malta , shall be deemed to fall within the ambit of sub-article (4). (6) A company or a partnership may apply to the Commissioner, on such form as the Commissioner shall provide, for a determina tion pursuant to sub-article (7) or sub-article (8). ( 7 ) T h e C o m m i s s i o n e r s h a l l d e t e r m i n e t h a t a c o m p a n y o r partnership falls within sub-article (3)(d) if, in addition to satisfying the requirements of sub-article (4)(a) and (b): (a) in the case of a company, more than half of the distributable profits of the company were allocated to the foreign income account (within the meaning of the Income Tax Act ) in the last complete financial year of the company or in the case of a partnership, mor e than half of the profits of the partnership would have been allocated to the foreign income account (within the meaning of the Income Tax Act ) in the last complete financial year of the partnership, had the partnership been a company; or (b) none of the assets held by the company or partnership are situated in Malta. For this purpose, the term ''assets'' shall not include marketable securities in companies referred to in sub-article (3)(c), (d) and (e) or interests in a partnership referred to in sub-ar ticle 3(d) and (e) or any othe r assets in Malta held by the company or partnership for the purposes of carrying on its business as long as the majority of the business interests of the company or partnership are located outside Malta. (8) The Commissioner may, in his discretion, determine that a company or partnership falls within sub-article (3)(d) if it is likely that, in the case of a company, more than half of its distributable p rofits will be allocated to the foreign income account in its first financi al year or in the case of a partnership, more than half of its profits wou ld be allocated to the foreign income account in its first financial year, had the partnership been a company. (9) The provisions of this article shall only be applicable wher e the Commissioner has so determined and such determination and any determination made pursuant to sub-article (7) or sub-artic le (8) shall continue to be applicable as long as the relevant con ditions and provisions are satisfied: Provided that any such determination made in relation to a 46 CAP. 364.] DUTY ON DOCUMENTS AND TRANSFERS company which falls under sub-article (3)( c), shall, in so far as it is valid as at 31st December, 2010, be considered, as from 1st Jan uary, 2011, to be a determination made in relation to a company which falls under sub-article (3)(e): Provided further that, without prejudice to the powers of the Commissioner (including, for the avoidance of doubt, that of determining at any time that any such determination is no longe r applicable due to the non-satisf action of any of the relevant conditions and provisions), any determination issued in terms o f paragraphs ( d) or ( e) of sub-article (3) shall apply for a term of three years, so however that any such determination made before 1st December 2016 shall apply until 30th November 2019: Provided also that any determination issued in terms of paragraphs ( d) or ( e) of sub-article (3) may, at the option of the applicant, be renewed for furt her periods of three years. Any application for renewal shall be submitted to the Commissioner, stating whether or not there have been any material changes to the facts and considerations contai ned in the original or previous application, as the case may be , and the nature of any such cha nges and such renewal shall not be unreasonably withheld by the Commissioner. Cap. 123. (10) The provisions of thi s article shall not apply: (a) where the marketable securities or interest in a partnership in question are held in a "property company" or in a "property partnership", as the case may be, as defined in article 2(1) of the Income Tax Act ; or (b) where the said exemption arises by virtue of sub- article (3)(d) or sub-article (3)(e), the said marketable securities or interest in a partn ership, as the case may be, ar e acquired by an individual who is ordinarily resident and domiciled in Malta or by any other person (other than any person referred to in sub-article (3)) who is owned or controlled, or acts on behalf of, an individual who is ordinarily resident and domiciled in Malta. Penalty for contravening articles 32, 33, 39 to 43, 45 and 46. Amended by: II. 2002.40; L.N. 425 of 2007. Substituted by: IV . 2011.41. Amended by: XII. 2014.46; VIIII.2020.49.