The Commissioner for Revenue has on the 1st November 2018 issued guidelines to clarify its position on the stamp duty implications of transactions involving the use of DLT assets. Stamp Duty is tax imposed by the DDTA on the acquisition of specific types of assets such as marketable securities and immovable property.
The type of DLT assets covered by the said guidelines are coins and tokens where the latter are further classified into financial tokens and utility tokens. Electronic transactions in fiat currency do not fall within the scope of the said guidelines.
Coins (cryptocurrencies) are designed solely as a means of payment or medium of exchange or used as a store of value. Financial tokens are analogous to equities, units in collective investment schemes (CISs), debentures or derivatives, where they grant the same income. On the other hand, Utility Tokens can only be used to buy goods or services within limited DLT platform/s.
Stamp Duty Implications under the Duty on Documents and Transfers Act (DDTA)
The transactions involving DLT assets are subject to the current provisions of the DDTA. Therefore the same stamp duty implications applicable to any other transaction will apply to transactions involving DLT assets, taking into consideration the nature of the activities, the status of the parties involved and the specific facts and circumstances of the case.
(i) Payments made in Coins or Tokens
Payments made in coins or tokens are treated in the same way as payments made in any other currency for stamp duty purposes. The value therefore is to be determined by reference to the rate established by the Maltese authority and when this is not available one should refer to the average quoted price on three reputable exchanges on the date of the transaction or any other methodology to the satisfaction of the Commissioner for Revenue.
(ii) Transfer of Coins and Utility Tokens
Given their nature, the transfer of coins and utility tokens falls outside the scope of the DDTA.
(i) Transfer of Financial Tokens
A transfer of a financial token that has the same characteristics of a marketable security as defined in the DDTA, shall be subject to stamp duty. The stamp duty amounts to Eur2 for every Eur100 or part thereof of the higher of the consideration and the real value of the financial token being transferred.
