188 tal-2003 - Regolamenti tal-2003 li jemendaw ir-Regolamenti dwar Skemi ta’ Investiment Kollettiv (Income minn Investiment)

L.N. 188 of 2003

INCOME TAX ACT

(CAP. 123)

Collective Investment Schemes (Investment Income) (Amendment)

Regulations, 2003

BY virtue of the powers conferred by articles 41B and 96 of the Income

Tax Act, the Minister of Finance and Economic Affairs has made the

following regulations: -

The title of these regulations is the Collective Investment Schemes

(Investment Income) (Amendment) Regulations, 2003 and shall be read

and construed as one with the Collective Investment Schemes (Investment

Income) Regulations, 2001, hereinafter referred to as “the principal

regulations”.

In paragraph (a) of subregulation (3) of regulation 14 of the

principal regulations, for the words “authorised financial intermediary shall

collect tax” there shall be substituted the words “authorised financial

intermediary shall, unless an election in terms of article 35 of the Act has

been made, collect tax”.

Immediately after regulation 14 of the principal regulations, there

shall be inserted the following new regulation

“15. (1) For the purposes of this regulation

Tax treatment

of switches.

“chain of consecutive switches” means a series of

consecutive switches (which for the purposes of this regulation

may constitute a single switch) commencing by a switch,

immediately prior to which there was not a switch, and

terminating with a switch following which there was a transfer

of securities which was not a switch;

“final securities” means those securities in a sub-fund last

acquired in a chain of consecutive switches;

“initial securities” means those securities in a sub-fund the

switch of which was the first switch in a chain of consecutive

switches;

“prescribed switch” means a switch of securities from a

prescribed fund;

“sub-fund” includes a class, part or other similar section of

the same collective investment scheme;

“switch” means a transaction, whereby securities in a sub-

fund of a collective investment scheme are switched to, or

transferred to, or re-invested in, or exchanged for or otherwise

transformed into securities of another sub-fund of the same collective

investment scheme provided that the holder of the last mentioned

securities is the same person as the holder of the first mentioned

securities and that the holding in the last mentioned sub-fund follows

immediately the holding in the first mentioned sub-fund.

(2) A switch constitutes a transfer of securities for the

purposes of article 5 of the Act

Provided that it shall be deemed that no loss or gain arises

upon a switch.

(3) (a) Capital gains arising at the time of disposal of

final securities shall be computed by aggregating those chargeable

capital gains and allowable capital losses which would have arisen

during the chain of consecutive switches and transfer of final

securities had the provisions of the proviso to subregulation (2) of

this regulation not been enacted

Provided that in the case of a disposal of final securities

held in a non-prescribed fund and where the relevant chain of

consecutive switches does not include a prescribed switch, such

capital gains may be calculated by deducting from the proceeds

of the disposal of the relevant final securities, the cost of

acquisition of the relevant initial securities.

(b) In calculating the capital gains as provided for in

paragraph (a) of this subregulation –

(i)

the conversion of foreign currencies, where required,

are to be made at the rates of exchange used in the acquisition or

transfer of the securities relevant to the calculation of the capital

gains. Where proof is not available as to the rates of exchange used

in the acquisition or transfer of the relevant securities, conversion of

currencies is to be made at the rate of exchange (middle rate of the

Central Bank) prevailing at the end of the calendar year in which the

acquisition or transfer, as the case may be, was made

Provided that if the acquisition and transfer are made in the

same calendar year, the conversion rate to be used is the rate of

exchange (middle rate of the Central Bank) prevailing on the

date of the acquisition and the rate of exchange (middle rate of

the Central Bank) prevailing on the date of the transfer;

(ii) where the aggregation of capital gains and capital

losses as provided for in paragraph (a) of this subregulation

involves different currencies, such gains or losses may be

converted into Maltese liri at the rates of exchange (middle rate

of the Central Bank) prevailing on the dates of the relevant

switches or disposal of final securities;

(iii) the cost of acquisition is to be calculated in the same

manner provided for in regulation 9 of these regulations, or in

such other manner which may be approved by the

Commissioner.”.

Mitbug[ fl-Istamperija tal-Gvern – Printed at the Government Printing Press