New tax incentives to promote investment on the MSE

During the budget speech for the year 2017, the Maltese Minister for Finance has a few days ago announced a number of fiscal incentives with the aim of promoting investment by the public on the Malta Stock Exchange (MSE).  Currently, individuals whose income exceeds certain prescribed thresholds are exempt from tax on dividends received.  As […]

Written By ACT Team

On November 2, 2016
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During the budget speech for the year 2017, the Maltese Minister for Finance has a few days ago announced a number of fiscal incentives with the aim of promoting investment by the public on the Malta Stock Exchange (MSE). 

Currently, individuals whose income exceeds certain prescribed thresholds are exempt from tax on dividends received.  As a result of this exemption, they will be unable to receive a credit / refund of the underlying tax paid by the company on such profits. However with effect from the year 2017, shareholders who own not more than 0.5% of the nominal share capital and dividend rights of a company listed on the MSE will be entitled to declare the dividends received and as a consequence will be able to claim a credit / refund of the underlying tax paid by the company distributing the profits which are generated on or after 1st January 2017. 

A number of other initiatives will also be introduced to encourage companies to raise finance through listings.  These include: 

  1. An annual tax credit of €250,000 in terms of a Risk Investment Scheme to persons who invest in SMEs that are registered on an alternative trading platform such as ‘Prospects’ or in funds that invest in SMEs that are so registered. 
  2. Removal of the 15% tax rate currently applicable on gains derived from the disposal of shares listed on the MSE by persons who held the shares prior to listing.  This tax exemption will also apply to shares listed on the alternative trading platform. 

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected].