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L.S. 123.51 Regolamenti dwar Skemi ta Investiment Kollettiv (Income minn Investiment)

C O L L E C T I V E I N V E S T M E NT S C H E M E S (INVESTMENT INCOME) [ S.L.123.51 1 SUBSIDIARY LEGISLATION 123.51 COLLECTIVE INVESTMENT SCHEMES (INVESTMENT INCOME) REGULATIONS 1st March, 2001 LEGAL NOTICE 55 of 2001, as amended by Legal Notices 111 of 2002, 188 of 2003, 307 of 2004, 313 of 2006, 409 of 2007, 257 of 2008 and 426 of

  2. The title of these regulations is the Collective Investment Schemes (Investment Income) Regulations.
  3. In these regulations, unless the context otherwise requires: "Act" means the Income Tax Act; Title. Definitions. Cap.
  4. "fund" means a collective investment scheme or, in the case of a collective investment scheme divided into sub-funds, a sub-fund of that scheme; "Malta based scheme" means a collective investment scheme formed in accordance with the laws of Malta; "overseas based scheme" means a collective investment scheme that is not a Malta based scheme; and other terms shall have the meaning assigned to them in articles 33 to 42, both inclusive, of the Act or, when not defined in the said articles, the meaning assigned to them under the other provisions of the Act.
  5. For the purpose of the definition of "prescribed fund" in paragraph (b ) of article 41A of the Act, and subject to the provisions of that paragraph and to the other provisions of these regulations, a fund shall be treated as a prescribed fund if it has been so classified by the Commissioner by means of a notice in writing. Meaning of prescribed fund.
  6. The Commissioner shall classify a fund as a prescribed fund if it is a fund of a Malta based scheme that has declared in the manner provided for in these regulations that - Classification of a prescribed fund. (a) the value of the assets situated in Malta allocated to that fund is on the 1st March 2001 at least eighty-five per cent of the value of the total assets so allocated; or (b) in the case of a fund that has been granted a collective investment scheme licence on or after the 1st March 2001 the value of the assets situated in Malta that will be allocated to that fund for the purpose of its operations is expected to be at least eighty-five per cent of the value of the total assets that will be so allocated. 5.

(1)A fund in an overseas-based scheme shall be treated as a non-prescribed fund. Non-prescribed fund. 2 [ S.L.123.51 COLLECTIVE INVESTMENT SCHEMES (INVESTMENT INCOME)
(2)When a Malta based scheme declares in the manner provided for in these regulations that a fund does not satisfy the conditions set out in regulation 4(a) or (b), as the case may be, the Commissioner shall classify that fund as a non-prescribed fund. Value of assets. Cap.
  1. Change of status of fund.
  2. For the purposes of these regulations the value of assets allocated to a fund on any given day shall be the value determined on the close of business of the last preceding working day and the basis of valuation of such assets shall comply in all relevant respects with that adopted in any reports or statements submitted by o r w it h r e s p e c t t o t ha t f u n d f o r a n y o f t he pu r p o s e s o f t he Investment Services Act. 7.
(1)When a collective investment scheme declares in the manner provided for in these regulations that the average daily value of the assets situated in Malta allocated to a prescribed fund has been, throughout any period of thirty consecutive days, less than eighty-five per cent of the average daily value of the total assets so allocated the Commissioner may, in his discretion, classify that fund as a non-prescribed fund and that fund shall as from the date of such new classification be treated as a nonprescribed fund.
(2)When a Malta based scheme declares in the manner provided for in these regulations that the average daily value of the assets situated in Malta allocated to a non-prescribed fund has been, throughout any period of thirty consecutive days, at least eighty-five per cent of the average daily value of the total assets so allocated the Commissioner may, in his discretion, classify that fund as a prescribed fund and that fund shall, subject to the provisions of regulation 8, be treated as a prescribed fund with effect from the date specified in the said classification.
(3)For the purpose of these regulations the average daily value of assets allocated to a fund on any day (hereinafter in this paragraph referred to as "the particular day") shall be determined by reference to the value of assets situated in Malta and the value of the total assets allocated to that fund on each day over a period of ninety days ending on the particular day: Provided that if that fund had been classified as a prescribed or a non-prescribed fund less than ninety days before the particular day the said period shall be a period commencing on the date of the last classification and ending on the particular day.
(4)The Commissioner may, as a condition for a classification in terms of subregulation
(1)or
(2), impose such conditions as he may deem appropriate in the circumstances to ensure the proper application of the investment income provisions and of these regulations. Securities in a nonprescribed fund that is subsequently classified as a prescribed fund. Cap. 345. 8.
(1)When a fund is classified as a prescribed fund in terms of regulation 7
(2)any securities held in that fund on the date of that classification shall continue to be treated as securities in a nonprescribed fund: provided that when such securities are disposed of they shall, if they are listed on a stock exchange recognised under the Financial Markets Act, be deemed to be disposed of for the price last quoted on the recognised stock exchange before the date C O L L E C T I V E I N V E S T M E NT S C H E M E S (INVESTMENT INCOME) [ S.L.123.51 3 of the said classification.
(2)When a person holds securities that are treated as securities in a non-prescribed fund in terms of subregulation
(1)and other securities in the same fund that are not so treated, any disposals of securities in that fund by that person shall be treated as disposals of securities in a non-prescribed fund until all the securities which that person held on the date on which that fund was classified as a prescribed fund have been disposed of. 9. For the purpose of determining the capital gains derived by a person from the disposal of securities that are listed on the recognised stock exchange and held in a non-prescribed fund the cost of acquisition of each unit or share of the same class as those disposed of shall be deemed to be the average cost obtained by dividing the total cost of acquisition of all such units or shares held by that person on the date of the disposal by the total number of the said units or shares: Calculation of cost of acquisition of listed securities. Amended by: L.N. 111 of 2002. Provided that (
  1. a)if the disposal is the first disposal of such units or shares by that person after the 28th February, 2001, the cost of acquisition of such units or shares held by him, if any, on the 1st March, 2001 shall be the price at which such units or shares were quoted on a recognised stock exchange on the date when they were acquired or the price at which they were last quoted on a recognised stock exchange before the 1st March, 2001, whichever price is the higher; and; (
  2. b)when the average cost of units or shares has been determined on the occasion of a disposal, the units or shares of the same class that are not disposed of on that occasion shall be deemed to have been acquired at the average cost determined on that occasion. 10. For the purpose of determining the capital gains arising on the surrender or maturity of units and such like instruments relating to linked long term business of insurance where the relative contract of insurance was concluded before the 1st March 2001 and where the benefits are wholly determined by reference to the value of units or shares held in a collective investment scheme, the cost of acquisition of the said linked units or such like instruments shall, to the extent that they correspond to units or shares in a nonprescribed fund that were listed on a recognised stock exchange on the said date, be deemed to be equal to the price of the said units or shares as last quoted on a recognised stock exchange before that date, or to the price of the said units or shares as quoted on a recognised stock exchange on the date the said contract of insurance was concluded, whichever price is the higher. Calculation of capital gains on the surrender or maturity of unit linked investments. Amended by: L.N. 111 of 2002. 11. A payor shall withhold tax on investment income paid to a collective investment scheme at the following rates: Rate of withholding tax. Amended by: L.N. 111 of 2002; L.N. 409 of 2007. (
  3. a)when the investment income in question is income to which article 41(a)(
  4. i)of the Act refers, at the rate of at the rate of fifteen cents (0.15) on every euro of such payment; 4 [ S.L.123.51 COLLECTIVE INVESTMENT SCHEMES (INVESTMENT INCOME) (
  5. b)in every other case, at the rate of ten cents (0.10) on every euro of such payment. Declarations to the Commissioner. Amended by: L.N. 111 of 2002. 12.
(1)Every Malta based scheme that holds a collective investment scheme licence issued before the 1st March 2001 shall make a declaration to the Commissioner stating if the value of the assets situated in Malta allocated to each of its funds on that date is at least eighty five per cent of the value of the total assets so allocated.
(2)When a collective investment scheme licence is issued on or after the 1st March 2001 to a fund in a Malta based scheme that scheme shall make a declaration to the Commissioner stating if the value of the assets situated in Malta that will be allocated to that fund for the purpose of its operations is expected to be at least equal to eighty-five per cent of the value of the total assets that will be so allocated.
(3)When the average daily value of the assets situated in Malta allocated to a prescribed fund of a collective investment scheme has been, throughout any period of thirty consecutive days, less than eighty-five per cent of the average daily value of the total assets so allocated that collective investment scheme shall make a declaration to that effect to the Commissioner.
(4)When the average daily value of the assets situated in Malta allocated to a non-prescribed fund of a Malta based scheme has been, throughout any period of thirty consecutive days, at least eighty-five per cent of the average daily value of the total assets so allocated that collective investment scheme shall make a declaration to that effect to the Commissioner.
(5)Any declaration required in accordance with the foregoing provisions of this regulation shall be given without delay and without the need of any request being made therefor by the Commissioner.
(6)Every collective investment scheme shall make such other declarations and give such other details as the Commissioner may reasonably require for any of the purposes of these regulations within such time as the Commissioner may specify. Notification to payor. Amended by: L.N. 111 of 2002. 13.
(1)When the Commissioner classifies a fund in a Malta based scheme as a prescribed or a non-prescribed fund, that scheme shall as soon as may be notify that status to any person who is liable to pay any income referred to in article 41(a) of the Act that falls to be allocated to that fund.
(2)When any person who makes a payment of income referred in subregulation
(1)to a Malta based scheme has not been notified, before that payment is made, that that income falls to be allocated to a non-prescribed fund that payment shall be deemed for all the purposes of the Act to be a payment of investment income that falls to be allocated to a prescribed fund and that person shall accordingly withhold tax and comply with the provisions of the Act relating to payors. C O L L E C T I V E I N V E S T M E NT S C H E M E S (INVESTMENT INCOME) [ S.L.123.51 14.
(1)An authorised financial intermediary is a person resident in Malta who has been registered as such by the Commissioner.
(2)A person shall not be eligible for registration as an authorised financial intermediary unless he applies for registration to the Commissioner for the purposes of these regulations and is, at the time of such application (
  1. a)a person who holds a Category 2 or Category 3 investment services licence issued in terms of the Investment Services Act, or (
  2. b)a person who holds a Category 1 investment services licence issued in terms of the Investment Services Act provided he declares to the Commissioner that he has given a commitment to the Malta Financial Services Authority that he will apply for a licence referred to in paragraph (
  3. a)and provided moreover that such person shall not remain an authorised financial intermediary after the 28th February 2002 unless he holds, on that date, a licence referred to in the said paragraph.
(3)(a) Where a recipient utilises the services of an authorised financial intermediary in connection with the payment of investment income, the said authorised financial intermediary shall, unless an election in terms of article 35 of the Act has been made, collect tax, by deduction or otherwise, amounting to fifteen percent of such income and shall be bound by all the obligations imposed on payors under the investment income provisions: Provided that notwithstanding the provisions of article 33
(3)of the Act (
  1. i)where the investment income is income referred to in article 41(a)(
  2. v)of the Act, the tax so collected shall be payable not later than the ninetieth day following the day of the contract note in relation to the disposal of the relevant units or shares; and (
  3. ii)where the investment income is income referred to in article 41(a)(
  4. vi)of the Act, the tax so collected shall be payable not later than the thirtieth day of April following the year in which the payment was made. (
  5. b)For the purposes of this regulation, a recipient utilises the services of an authorised financial intermediary in connection with the payment of investment income where: (
  6. i)the payment of investment income is made to the authorised financial intermediary who is the registered holder of the relevant units or shares and who holds such units or shares for the benefit of the said recipient; (
  7. ii)the said recipient is the registered holder of the 5 Authorised financial intermediary. Amended by: L.N. 111 of 2002; L.N. 188 of 2003. Cap. 370. 6 [ S.L.123.51 COLLECTIVE INVESTMENT SCHEMES (INVESTMENT INCOME) (iii) relevant units or shares, who receives the investment income directly in his own name and who requires that an authorised financial intermediary collects an amount of tax equal to fifteen percent of such investment income for onward payment to the Commissioner; the payment of investment income is effected through an arrangement approved by the Commissioner, which arrangement enables the collection of tax on such investment income through an authorised financial intermediary.
(4)Where a recipient has utilised the services of an authorised financial intermediary in connection with the payment of investment income, the said authorised financial intermediary shall furnish the recipient with a certificate in accordance with article 33
(3)of the Act, which certificate shall bear a sequential number in a series applied to all certificates issued by that intermediary for payments of investment income and shall contain the information specified in Part One of the Schedule to these regulations.
(5)An authorised financial intermediary shall every month render an account to the Commissioner in accordance with article 33
(2)of the Act which shall include the information specified in Part Two of the schedule to these regulations: provided that for any month in which he does not make any payment of investment income he shall furnish a nil return. Tax treatment on switches. Added by: L.N. 188 of 2003. Amended by: L.N. 313 of 2006; L.N. 409 of 2007; L.N. 257 of 2008. 15.
(1)For the purposes of this regulation: ''chain of consecutive switches'' means a series of consecutive switches (which for the purposes of this regulation may constitute a single switch) commencing by a switch, immediately prior to which there was not a switch, and terminating with a switch following which there was a transfer of securities which was not a switch; ''final securities'' means those securities in a sub-fund last acquired in a chain of consecutive switches; ''initial securities'' means those securities in a sub-fund the switch of which was the first switch in a chain of consecutive switches; ' ' p r e s c r ib e d s w i tc h ' ' m e a n s a s w i t c h o f s e c u r i t i e s f r om a prescribed fund; ''sub-fund'' includes a class, part or other similar section of the same collective investment scheme; ''switch'' means a transaction, whereby securities in a subfund of a collective investment scheme are switched to, or transferred to, or re-invested in, or exchanged for, or otherwise transformed into, securities of: (
  1. a)another sub-fund of the same collective investment scheme provided that: (
  2. i)the holder of the last mentioned securities is the same person as the holder of the first mentioned securities; and C O L L E C T I V E I N V E S T M E NT S C H E M E S (INVESTMENT INCOME) [ S.L.123.51 (
  3. ii)the holding in the last mentioned sub-fund follows immediately the holding in the first mentioned sub-fund; or (
  4. b)a sub-fund of another collective investment scheme, provided that: (
  5. i)this transaction follows directly the approval of the relevant competent authority for the closure of a sub-fund or winding up proceedings in terms of provisions of Title II of Part V of the Companies Act or amalgamation proceedings in terms of the provisions of Part VIII of the Companies Act in the case of a Malta based scheme and in no circumstance such transaction was initiated or instigated by the holder of the first mentioned securities; and (
  6. ii)the holder of the last mentioned securities is the same person as the holder of the first mentioned securities; and (iii) the holding in the last mentioned sub-fund follows immediately the holding in the first mentioned sub-fund; provided further that the Commissioner is satisfied that:
(1)the sub-fund of such other collective investment scheme has investment objectives which are identical to those of the first mentioned subfund; and
(2)the sub-fund of such other collective investment scheme succeeds to all the rights and obligations of the first mentioned sub-fund; and
(3)the sub-fund of such other collective investment scheme has the same investment manager and the same custodian as the first mentioned sub-fund, provided that the requirement to have the same custodian shall be waived where an investor is required to carry out a forced switch in cases where an investment manager decides to close a sub-fund of a collective investment scheme and to offer the opportunity to investors to transfer the relevant investment to a sub-fund of another collective investment scheme; and
(4)the transaction does not involve a substantial departure from the terms relating to the holding in the first mentioned sub-fund. For the purposes of this proviso, the relevant investment manager shall seek the Commissioner’s approval that all such transactions from the first mentioned sub-fund to the last mentioned sub-fund will be considered as switches for the purposes of this Cap. 386. 7 8 [ S.L.123.51 COLLECTIVE INVESTMENT SCHEMES (INVESTMENT INCOME) regulation. The Commissioner may, prior to giving such approval, request such information and documents that he may deem necessary.
(2)A switch constitutes a transfer of securities for the purposes of article 5 of the Act: Provided that it shall be deemed that no loss or gain arises upon a switch.
(3)(a) Capital gains arising at the time of disposal of final securities shall be computed by aggregating those chargeable capital gains and allowable capital losses which would have arisen during the chain of consecutive switches and transfer of final securities had the provisions of the proviso to subregulation
(2)not been enacted: Provided that in the case of a disposal of final securities held in a non-prescribed fund and where the relevant chain of consecutive switches does not include a prescribed switch, such capital gains may be calculated by deducting from the proceeds of the disposal of the relevant final securities, the cost of acquisition of the relevant initial securities. (
  1. b)In calculating the capital gains as provided for in paragraph (
  2. a)(
  3. i)the conversion of foreign currencies, where required, are to be made at the rates of exchange used in the acquisition or transfer of the securities relevant to the calculation of the capital gains. Where proof is not available as to the rates of exchange used in the acquisition or transfer of the relevant securities, conversion of currencies is to be made at the rate of exchange (middle rate of the Central Bank) prevailing at the end of the calendar year in which the acquisition or transfer, as the case may be, was made: Provided that if the acquisition and transfer are made in the same calendar year, the conversion rate to be used is the rate of exchange (middle rate of the Central Bank) prevailing on the date of the acquisition and the rate of exchange (middle rate of the Central Bank) prevailing on the date of the transfer; (
  4. ii)where the aggregation of capital gains and capital losses as provided for in paragraph (
  5. a)involves different currencies, such gains or losses may be converted into euros at the rates of exchange (middle rate of the Central Bank) prevailing on the dates of the relevant switches or disposal of final securities; (iii) the cost of acquisition is to be calculated in the C O L L E C T I V E I N V E S T M E NT S C H E M E S (INVESTMENT INCOME) [ S.L.123.51 9 same manner provided for in regulation 9, or in such other manner which may be approved by the Commissioner. 16. For the purposes of the investment income provisions of the Act and of any regulations made thereunder, "collective invest ment scheme" includ es an un dertaking for coll ecti ve investment in transferable securities authorised in accordance with Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as amended up to and in force on the 1 st May, 2004 and as may be amended from time to time. UCITS. Added by: L.N. 307 of 2004. 10 [ S.L.123.51 Amended by: L.N. 111 of 2002; L.N. 426 of 2012. COLLECTIVE INVESTMENT SCHEMES (INVESTMENT INCOME) SCHEDULE (Regulation 14
(4)) PART ONE Information to be supplied by authorised financial intermediaries on every payment certificate 1) Sequential number of certificate 2) Name and address of the authorised financial intermediary 3) Description of the fund 4) Name and a legally valid identification document number of the investor 5) In the case of a disposal of units or shares:
  1. a)The date of the disposal
  2. b)The number of units or shares disposed of
  3. c)The price for which the units or shares were disposed of
  4. d)The amount subject to tax
  5. e)The net amount paid or reinvested 6) In the case of a distribution of profits
  6. a)The profits distributed before withholding tax
  7. b)The tax withheld
  8. c)The net payment 7) Date of the certificate 8) Signature of the authorised financial intermediary PART TWO Monthly account to be rendered to the Commissioner by financial intermediaries 1) Name and address of the authorised financial intermediary 2) Period covered 3) Total tax withheld 4) First and last sequential numbers of the corresponding payment certificates 5) A breakdown giving
  9. a)The description of each fund
  10. b)The tax withheld on the payments from each fund
  11. c)The total number of payment certificates corresponding to payments from each fund 6) The date of the return 7) Signature of the authorised financial intermediary For a period during which no tax was withheld a nil return must be submitted.

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AI explanation based on the official legal text. Indicative, not a substitute for legal advice.