Following the 2015 Budget presented by the Finance Minister during the end of 2014, a Bill has been issued which proposes a changed in the definition of the term 'company' for income tax purposes.
The current definition of the term 'company' in the Income Tax Act will be extended to also include:
- Partnerships en nom collectif;
- Partnerships en commandite (whether their capital is divided into shares or not);
- Partnerships regulated by the Civil Code;
- Any European Economic Interest Grouping (EEIG) formed pursuant to the provisions of the Companies Act (European Economic Interest Grouping) Regulations.
Once the bill is approved the above mentioned partnerships of EEIG may elect to be treated as companies for all purposes of the Income Tax Acts and will no longer be looked through as they have been so far. Such election shall be effected by not later than sixty days after the date of setting up of the partnership of EEIG.
This change may bring about significant advantages to partnerships which may now benefit from the tax incentives which are applicable to 'companies registered in Malta' in accordance with the Income Tax Acts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.