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Investment Registration Scheme Regulations 2014

Applicable date: The Scheme runs until 30 September 2014

 

Applicable to: Residents of Malta subject to tax in Malta (whether individuals or companies)

who hold ‘eligible assets’ who want to regularize their position under the Income Tax Act by

registering such assets under the Scheme.

 

Eligible Assets: These include:

 

i. deposits held with credit institutions licensed in Malta, or abroad irrespective of the

currency of denomination;

ii. securities including (a) shares and stocks in the capital of a company registered or

incorporated in a reputable jurisdiction or other instruments created or acknowledging

an ownership interest in such company (b) debentures, certificates of deposits, bonds,

notes and any other similar instrument creating or acknowledging indebtedness issued

by a company registered in a reputable jurisdiction; and (c) securities issued by central,

regional or local governments, states or sub-divisions of any state or any supra-national

organization;

iii. units in a collective investment scheme, life and annuity long term insurance policies,

whether index-linked or not issued by a scheme or insurer licensed in Malta or abroad;

iv. precious metal bullion;

v. warrants, options, futures and other derivatives as well as any other financial instruments

entered into in Malta and, or abroad for investment purposes;

vi. shareholders loans or other advances extended to a company registered in a reputable

jurisdiction and immovable property situated in or outside Malta;

vii. immovable property situated in or outside Malta.

 

Any income arising from eligible assets which is received after 4 November 2013 and reinvested

before the date of registration, shall be deemed to constitute eligible assets existing on 4

November 2013 and shall be eligible for registration.

 

Registration under the scheme: Eligible assets may only be registered under the Scheme by the

person who beneficially owns such assets on the applicable date or by the person from whom

the eligible assets originated when on the said date these are held by a fiduciary, or by the heir

or legatee of such person, provided that the same eligible assets may only be registered by one

such person.

 

Registration of eligible assets under this Scheme is applicable for eligible assets held in or

outside Malta on 4 November 2013 and still belonging to the applicant or to a fiduciary on

behalf of or at the request of the applicant on date of registration.

 

Such registration shall be executed by the applicant through appointed registration agents

which shall be credit institutions licensed in Malta under the Banking Act, financial institutions

licensed in Malta under the Financial Institutions Act, stockbrokers licensed under the

Investment Services Act, and persons holding a category 2 or category 3 Investment Services

License granted under the Investment Services Act. Such registration agents are appointed by

the Central Bank of Malta.

 

The appointed registration agent shall only register assets under the Scheme against the

submission by the applicant of original documentary evidence confirming that such assets are

eligible under the Scheme and were held by the applicant on the applicable date, or else have

originated from him if held by a fiduciary on such date.

 

Where eligible assets which may be registered under the Scheme have been switched or

otherwise converted or exchanged by the applicant into other assets during the period between

4 November 2013 and the registration date, the applicant is to provide documentary evidence

of such conversions or exchanges as may be required by the appointed registration agent. This is

also applicable if the assets are held by a fiduciary.

 

Declaration: The person registering the eligible assets shall sign a declaration confirming mainly

that the information and documents provided with respect to the registration of the eligible

assets is true and correct and that the registered assets do not represent proceeds generated

from any fraudulent or criminal activity.

 

The appointed registration agent, after having duly completed the declaration modalities and

being satisfied of their accuracy and completeness, shall issue a non transferable Registration

Certificate in triplicate – the original will be held by the applicant, a copy will be held by the

registration agent and another one will be held by the Central Bank of Malta.

 

Payment Fee: The Registration Certificate will be issued against payment to the Government in

the form of a registration fee.

 

The fee amounts to:

• 7.5% on the original cost, in case of immovable property;

• 7.5% of the current market value of the registered eligible assets (other than immovable

property) held outside of Malta;

• 5% of the current market value of the registered eligible assets repatriated to Malta

(up to at least two weeks after registration date). The sale of the assets/transfer of the

proceeds to Malta must take place within three weeks from the registration date and the

applicant must eventually provide the registration agent with documentary evidence of such

repatriation and local investment. The repatriated assets must be retained in Malta for at

least three years after date of registration.

 

Upon registration, the beneficial owner of the eligible assets registered under this Scheme and

in whose name or for whose benefit a Registration Certificate has been issued will be entitled

to certain tax exemptions mainly on any income or capital gain derived from the eligible assets

before date of registration. The tax exemptions will not apply if the applicant makes false

statements and/ or furnishes false documents. Furthermore, in such case, the Registration

Certificate shall be null and void as if it had never been issued.

 

Possibility of Enquiry: Where the holder of a Registration Certificate is served with a notice

of enquiry by the Inland Revenue Department, such person is required to produce the

Registration Certificate to the Inland Revenue Department within thirty day from the date of

such notification. In case of default without a justifiable reason, the tax exemption shall not

apply. If however, the Commissioner is satisfied that such person was unable to furnish the

Registration Certificate owing to a reasonable cause, the Commissioner may extend the period

for submission of the said Certificate as may be reasonable in the circumstances.