In March 2013 amendments to the Capital Gains Rules brought about by L.N. 103 and 105 of 2013 entered into force.
Legal Notice 105 extended the definition of a “controlling interest” so it now covers also situations where the shareholder was in the 18 months prior to the share transfer entitled to at least 25% of the total rights to profits available for distribution to the ordinary shareholders of the company.
Furthermore, new rules changed percentage of the market value of a company is attributable to the shares being transferred. At the moment, a weighted formula has replaced a proportional calculation and the rule which requires the transferor to attach a higher percentage of the market value of the company to the shares being transferred was limited to changes in the issued share capital which did not result in the payment of stamp duty.
The amendment allowed also a shareholder to substitute the formula-method of calculating the market value of shares with a valuation prepared by an independent expert. Moreover, new rules regarding procedural aspects of taxation following sale by judicial auction were established.
Legal Notice 105 introduced a possibility for a taxpayer to obtain a ruling regarding mergers or divisions of one or more companies. This way, the Commissioner of Inland Revenue may waive certain charging provisions or allow certain tax relief. The basic requirement for obtaining the ruling is the satisfaction of bona fide commercial reasons of said transaction and that this arrangement do not form part of a scheme aimed primarily at avoidance of liability to duty or tax. The application for the ruling is subject to €1,000 fee.
In March 2013 amendments to the Capital Gains Rules brought about by L.N. 103 and 105 of 2013 entered into force.
Legal Notice 105 extended the definition of a “controlling interest” so it now covers also situations where the shareholder was in the 18 months prior to the share transfer entitled to at least 25% of the total rights to profits available for distribution to the ordinary shareholders of the company.
Furthermore, new rules changed percentage of the market value of a company is attributable to the shares being transferred. At the moment, a weighted formula has replaced a proportional calculation and the rule which requires the transferor to attach a higher percentage of the market value of the company to the shares being transferred was limited to changes in the issued share capital which did not result in the payment of stamp duty.
The amendment allowed also a shareholder to substitute the formula-method of calculating the market value of shares with a valuation prepared by an independent expert. Moreover, new rules regarding procedural aspects of taxation following sale by judicial auction were established.
Legal Notice 105 introduced a possibility for a taxpayer to obtain a ruling regarding mergers or divisions of one or more companies. This way, the Commissioner of Inland Revenue may waive certain charging provisions or allow certain tax relief. The basic requirement for obtaining the ruling is the satisfaction of bona fide commercial reasons of said transaction and that this arrangement do not form part of a scheme aimed primarily at avoidance of liability to duty or tax. The application for the ruling is subject to €1,000 fee.