Capital gains arising from transfers of shares which are listed on the Malta Stock Exchange, are exempt from income tax and duty in Malta. With effect from last year, various provisions of the Income Tax Act referring to a ‘Stock Exchange’ have been widened. As a result, the income tax exemption now also applies to capital gains arising from transfers of shares listed on a foreign stock exchange which is recognised by the Commissioner for Revenue.
What are the stock exchanges which are recognized by the Commissioner for Revenue?
Recent guidelines published by the Office of the Commissioner for Revenue have confirmed that the recognised stock exchanges refer to:
Stock exchanges that are members of the World Federation of Stock Exchanges;
The New York Stock Exchange; and
Stock exchanges that are included in the register of regulated markets within the European Economic Area maintained by the European Securities and Markets Authority (ESMA).
What gains are exempt from income tax in Malta?
The income tax exemption relating to sale of listed shares, applies to gains which are of a capital nature. Any other gains arising from a trading activity involving sale of shares on a stock exchange, are subject to income tax.
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