Malta published the Budget Act for 2021 (Act No. XVIII of 2021) on 16 April 2021. The Budget Act includes important amendments to the Duty on Documents and Transfers Act in relation to the exemption from the 2% duty on the transfer of marketable securities as provided in Article 42 of the Duty Act. Under Article 42, an exemption from duty is provided for certain transfers (exchanges) as part of any restructuring of holdings through mergers, demergers, amalgamations, and reorganizations within a group of companies, including:
- The transfer by an individual of any shares, held in their own name, forming part of a group of companies in exchange of shares in a company or companies forming part of the same group;
- The exchange of shares from one company to another where such shares are in companies forming part of the same group of companies; and
- The transfer of shares for consideration from one company to another, where such companies form part of the same group of companies.
Under the Budget Act, the last two exemptions are extended to also include:
- The exchange of a partnership interest for shares from one company to another where the company receiving the shares and the company whose shares are being exchanged are companies forming part of the same group of companies; and
- The transfer of a partnership interest for consideration from a company or partnership to another company or partnership, where the transferor and the transferee form part of the same group of companies, or where any or both of them are partnerships, would have been considered to form part of the same group if they had been a company or companies.
The Budget Act also adds relevant definitions for the exemptions. The expanded scope for the exemption is deemed to have come into force on 28 June 2019.
Article originally published on www.orbitax.com