Renewing of the Duty on Documents Tax Exemptions

DDT10 Determination expiring in a few months

Dr. Priscilla Mifsud Parker | Published on 20 Sep 2019

Renewing of the Duty on Documents Tax Exemptions IMG

Recent changes to the Duty on Documents and Transfers (DDT) Act (the “Act”) necessitate companies to renew their duty on documents exemption status. The exemption can therefore no longer be considered indefinite. 

The DDT10 exemption (as it is more commonly known) is dealt with under Article 47 of the Act. Such exemption relieves companies from the obligations of provisional tax whilst facilitating the share transfer process. However, such exemption is only applicable where the Commissioner for Revenue (CfR) has so determined after a request has been presented by the company, and such determination shall continue to be valid as long as the conditions and provision are satisfied. Companies previously used to apply for the Stamp Duty Exemption on Transfers of Marketable Securities (DDT10) closely after the incorporation of the company, and such exemption used to apply throughout the lifetime of the company. 

Applicability of the DDT10 Exemption 

The DDT10 exemption applies to: 

(1) Collective Investment Schemes; 

(2) Persons holding an investment services license; 

(3) International Trading Companies; 

(4) Companies which, have more than 50% of their ordinary share capital, voting rights and rights to profits held by: 

- A person who is not resident in Malta; or 

- A trustee of a trust, whose beneficiaries are not resident in Malta; and 

- Which has been determined by the CfR as having the majority of its business interests outside Malta. 

(5) Trust or fiduciary arrangements: 

- Whose beneficiaries consist solely of individuals who are not resident in Malta and; 

- Where the fiduciary, trustee or company proves to the satisfaction of the CfR that the company carries or intends to carry out business or has or intends to have more than 90% of business interest outside Malta. 

Renewals for the DDT10 Exemption 

Following amendments made to the Act, a determination which has been given by the CfR to companies falling under (4) or (5) above before the 1st of December 2016, shall continue to be valid up to the 30th of November 2019. On the other hand, a determination issued by the CfR on or after the 1st of December 2016, shall only be valid for a period of three years from the date of determination. 

The determination issued by the CfR, may, at the option of the applicant, be renewed for further periods of three years. Therefore, in order to continue benefitting from the DDT10 exemption, companies will need to re-apply for a new determination and specify whether there have been any material changes to the considerations and facts contained in the previous application, otherwise transfers of marketable securities will start attracting duty.

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Dr Priscilla Mifsud Parker

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+356 22056422