Investment Registration Scheme Regulations, 2014

L.N. 256 of 2014

EXTERNAL TRANSACTIONS ACT

(CAP. 233)

Investment Registration Scheme Regulations, 2014

IN exercise of the powers conferred by articles 11(2) of the

External Transactions Act (hereinafter referred to as "the Act"), the

Minister for Finance has, after consultation with the Central Bank of

Malta, made the following regulations:-

(1) The title of these regulations is the Investment Citation and

purpose.

Registration Scheme Regulations, 2014.

(2) The purpose of these regulations is to provide for the

establishment of a registration scheme to be known as the Investment

Registration Scheme, 2014, hereinafter referred to as the Scheme,

whereby residents of Malta subject to tax in Malta who hold eligible

assets without declaring the relevant income (including capital gains)

for the purposes of the Income Tax Act, may regularise their position Cap. 123.

under the relevant laws.

(1)

In these regulations, unless the context otherwise Interpretation.

requires

"applicable date" means any date between 4 November 2013

and 30 September 2014;

"applicant" means a person who registers under the Scheme

under regulation 3;

"appointed registration agent" means a person appointed by the

Central Bank of Malta under regulation 5;

"eligible assets" shall, save for the provisions of sub-regulation

(2), have the same meaning assigned to it by the Act and regulations

made thereunder;

"fiduciary" means any private foundation or any person who is

engaged to hold in his name or owns any eligible assets for another

person under a mandate or a trust;

"relevant laws" has the same meaning assigned to it in article 9B

of the Income Tax Act;

"reputable jurisdiction" has the same meaning assigned to it by

regulation 2 of the Prevention of Money Laundering and Funding of

Terrorism Regulations.

(2) By virtue of the powers vested in the Minister under the

Act, the Minister has determined that the eligible assets set out

hereunder shall, by virtue and for the purposes of this regulation, are

the following assets

(a)

deposits as defined in the Banking Act held with

credit institutions licensed in Malta, or abroad irrespective of

the currency of denomination;

(b) securities including (i) shares and stock in the

capital of a company registered or incorporated in a reputable

jurisdiction or other instruments creating or acknowledging an

ownership interest in such company (ii) debentures, certificates

of deposit, bonds, notes and any other similar instrument

creating or acknowledging indebtedness issued by a company

registered in a reputable jurisdiction; and (iii) securities issued

by central, regional or local governments, states or sub-

divisions of any state or any supra-national organization;

(c)

units in a collective investment scheme, life and

annuity long term insurance policies, whether index-linked or

not issued by a scheme or insurer licensed in Malta or abroad;

(d)

precious metal bullion;

(e)

warrants, options, futures and other derivatives as

well as any other financial instruments entered into in Malta

and, or abroad for investment purposes;

(f)

shareholder loans or other advances extended to a

company registered in a reputable jurisdiction; and

(g)

immovable property situated in or outside Malta.

(3) Words and expressions used in these regulations which are

also used in the Act or the Income Tax Act shall, unless the context

otherwise requires, have the same meaning as assigned to them in the

said Acts.

(4) For the purposes of these regulations, any income arising

from eligible assets which is received after 4 November 2013 and

reinvested before the date of registration, shall be deemed to

constitute eligible assets existing on 4 November 2013 and shall be

eligible for registration under these regulations.

(1) Residents of Malta subject to tax in Malta who own Regularization

eligible assets without declaring the relevant income for the purposes of

under the

of the relevant laws, may regularise their position under the relevant Income

laws, by registering such assets under the Scheme on the prescribed

form as set out in the Schedule.

(2) Eligible assets may only be registered under the Scheme by

the person who beneficially owns such assets on the applicable date

or by the person from whom the eligible assets originated when on

the said date these are held by a fiduciary, or by the heir or legatee of

such person, provided that the same eligible assets may only be

registered by one such person.

The Scheme shall run until 30 September 2014.

Operative

period of the

Scheme.

Registration of eligible assets for the purposes of Registration

regulation 3 shall be executed by an applicant through appointed under

Scheme.

registration agents which shall be credit institutions licensed in Malta

under the Banking Act, financial institutions licensed in Malta under Cap. 371.

the Financial Institutions Act, stockbrokers licensed under the Cap. 376.

Investment Services Act, and persons holding a category 2 or Cap. 370.

category 3 Investment Services Licence granted under the Investment

Services Act and in each case appointed as registration agents by the

Central Bank of Malta.

Registration of eligible assets under this Scheme shall be Assets which

open to eligible assets referred to in regulation 2 (2) held in or outside may

registered under

Malta on 4 November 2013 and still belonging to the applicant or to a the Scheme.

fiduciary on behalf of or at the request of the applicant on date of

registration.

(1) The appointed registration agent shall only register Evidence to

assets under the Scheme against the submission by the applicant of support

registration.

original documentary evidence confirming that such assets are

eligible under the Scheme and were held by the applicant on the

applicable date, or else have originated from him if held by a

fiduciary on such date.

(2) The documentary evidence referred to in sub-regulation (1)

shall be

(a)

in the case of precious metal bullion, a confirmation

from the institution with which the precious metal bullion is

held;

(b) in the case of immovable property, a duly

authenticated copy of the original contract by virtue of which

the property was acquired and a confirmation from a duly

qualified person that the said property was owned by the

applicant on the applicable date;

(c)

in the case of shareholder loans or other advances to

a company in a reputable jurisdiction, a duly authenticated copy

of the agreement by virtue of which funds were advanced by the

applicant to such company together with such other

documentary evidence that such loans or advances were duly

received by the borrower, as well as an auditor’s certificate

confirming title and existence of such loans or advances. In all

cases, the said loans or advances must be evidenced in the

audited financial statements submitted to the Inland Revenue

Department or the Registrar of Companies in Malta (or to their

equivalent counterparts, in the case of other jurisdictions) by 4

November 2013;

(d) in the case of all other eligible securities, deposits,

insurance policies or units in collective investment schemes, a

contract note or other written confirmation from the relevant

licensed financial intermediary;

(e)

such other documentary evidence which may be

declared sufficient or satisfactory by the Central Bank of Malta

in writing on a case by case basis;

(f)

where eligible assets are held by a third party in a

fiduciary capacity, the applicant shall also submit to the

appointed registration agent

(i) where the fiduciary is regulated and licensed

in Malta or in a foreign jurisdiction, evidence that such

fiduciary is in fact so regulated or licensed, and

confirmation evidencing that such fiduciary held the

eligible assets on behalf of or at the request of the

applicant; or

(ii) where the fiduciary is not licensed or

regulated, a confirmation, bearing the fiduciary’s original

signature and witnessed by a Notary Public, a

Commissioner of Oaths, or an Advocate, evidencing that

such fiduciary held the eligible assets on behalf of or at the

request of the applicant.

(3) Where eligible assets which may be registered under the

Scheme have been switched or otherwise converted or exchanged by

the applicant into other assets during the period between 4 November

2013 and the registration date, the applicant is to provide

documentary evidence of such conversions or exchanges as may be

required by the appointed registration agent. This rule shall also apply

if the assets are held by a fiduciary.

(4) Copies of the original documentary evidence provided by

the applicant in terms of these regulations are to be retained by the

appointed registration agent, in printed or electronic form, for record

purposes for a period of ten years.

(1) A person who registers eligible assets under the Statutory

Scheme shall sign a declaration which is to be provided on the declaration.

prescribed form set out in the Schedule wherein the applicant

represents to the Central Bank of Malta that

(a)

such person is the beneficial owner of the assets

being registered or that such assets being held in the name or

under the control of a fiduciary originated from him;

(b) such person accepts full responsibility for the

accuracy and authenticity of the information and documentary

evidence provided to the appointed registration agent;

(c)

such person undertakes to make available to the

appointed registration agent any further information that may be

required by the agent for the proper exercise of its functions in

this regard;

(d) the documentary evidence being submitted to the

appointed registration agent hereof is the true original;

(e)

the registered eligible assets do not represent

proceeds from

(i) a crime of money laundering under the

Prevention of Money Laundering Act, or

(ii) any of the crimes listed in the Second

Schedule to the Prevention of Money Laundering Act other Cap. 373.

than a crime against the relevant laws;

(f)

the registered assets were held in or outside Malta

on 4 November 2013;

(g) the registered assets have only been registered once

under the Scheme and have not already been registered under

this Scheme or previous Investment Registration Schemes;

(h)

the declaration is being given in good faith.

(2) The declaration shall also include

(a)

a detailed description of the eligible assets being

registered and such other information that would enable, where

applicable, the proper identification of the eligible assets,

including such unique references or codes as may apply to the

eligible assets;

(b) details of the beneficial owners or of the persons

from whom the eligible assets originated, including full name,

identity card number, address and signature; and details of the

fiduciary where eligible assets are held by a third party;

(c)

details of the appointed registration agent.

(1) The appointed registration agent, after having duly

completed the declaration modalities and being satisfied of their

accuracy and completeness, shall issue a Registration Certificate. The

Certificate shall be sequentially and uniquely numbered and on

controlled stationery, the use of which has to be restricted to duly

authorised staff of the appointed registration agent and of the

Appointed Central Registration Certificate Depository only.

(2) The Registration Certificate shall be issued to the applicant

against the payment of a registration fee as specified in regulation 13.

(3) The Registration Certificate shall be issued by the

appointed registration agent in triplicate: one copy shall be provided

to the applicant; one copy is to be retained by the appointed

registration agent; and one copy is to be provided to the Appointed

Central Registration Certificate Depository.

(4) The Central Bank of Malta is, by means of these

regulations, being appointed the Central Registration Certificate

Depository.

(5) The triplicate copies of all the Registration Certificates

issued by the appointed registration agent during each calendar month

shall be sent to the Central Registration Certificate Depository within

seven (7) days after the end of that month.

(6) The Registration Certificate is strictly non-transferable.

(7) In the event that a Registration Certificate is lost, defaced

or destroyed, the applicant may make a request in writing to the

Central Registration Certificate Depository for the issue of a copy of

the lost, defaced or destroyed certificate.

(8) Other than by order of a Court, every person, including

past and present officers or agents of an appointed registration agent

or of the Appointed Central Registration Certificate Depository, shall

be bound by the duty of professional secrecy in the exercise of his

functions under these regulations and shall not disclose any

information contained in the Registration Certificate which may come

in his possession in the exercise of his functions under these

regulations.

(1) The appointed registration agent shall ensure full Anti Money-

compliance with the provisions of these regulations, the Prevention of Laundering

obligations.

Money Laundering Act, regulations issued thereunder and Cap. 373.

implementing procedures issued by the Financial Intelligence

Analysis Unit when registering any asset/s under this Scheme and

shall therefore be bound to comply with all the obligations imposed

on a subject person, including customer due diligence and the

collection of information on the source of funds.

(2) Nothing in these regulations shall be construed as

exempting the applicant or any other person from liability for the

commission of any crime or from prosecution for any crime other

than a crime under the relevant laws.

In completing the registration, the applicant confirms his Consent to

consent to authorise the appointed registration agent to furnish a copy furnish

of Registration

of the Registration Certificate to the Central Registration Certificate Certificate.

Depository.

(1) Upon registration, the beneficial owner of the Effects of

eligible assets registered under this Scheme and in whose name or for registration

exemption.

whose benefit a Registration Certificate has been issued pursuant to

these regulations shall be entitled to the exemptions referred to in

article 9B of the Income Tax Act.

(2) The submission by the applicant of false statements and/or

documents required under these regulations shall

(a)

nullify the Registration Certificate as if that

Registration Certificate had never been issued; and

(b) render the applicant ineligible to the benefits and

exemptions granted under the Scheme.

(1) The issue of a Registration Certificate is subject to Registration fee.

the payment by the applicant of a registration fee payable to the

Government.

(2) Such registration fee is equivalent to

(a) in the case of immovable property, seven and one

half per centum of the original cost on date of purchase of the

registered asset;

(b) in the case of all other eligible assets, seven and one

half per centum of the current market value of the registered

eligible assets

Provided that in the event that the applicant can

provide documentary evidence that the acquisition cost

exceeded the current market price, the applicable registration

fee shall be charged on such acquisition cost

Provided further that in respect of eligible assets referred

to in paragraphs (a) and (b) which were held abroad on 4 November

2013 and are still held abroad on date of registration, a rate of five per

centum shall be charged where the applicant makes an irrevocable

commitment to repatriate the relative proceeds within two weeks after

date of registration and to invest such funds in locally listed securities

or in deposits with domestic banks, subject that the applicant shall

provide to the registration agent within three weeks from date of

registration documentary evidence of such repatriation and local

investment, and that the repatriated assets will be retained locally for

at least three years after date of registration.

(3) The current market value is calculated on the basis of a

valuation by a duly qualified person made within three months

preceding the date of registration and presented to the appointed

registration agent.

(4) The registration fees paid by registered applicants are to be

remitted by the appointed registration agent to the Government at a

designated account at the Central Bank of Malta by not later than

seven days after the end of the month during which the fees are

collected.

(5) The appointed registration agent shall issue a receipt,

which is an integral part of the Registration form, to the applicant in

respect of the registration fee paid.

The appointed registration agent is entitled to recover a fee

for services rendered to effect registration. Such fee shall be deducted

from the Registration fee paid in respect of the issue of the

Registration Certificate. Such fee shall be equivalent to five per

centum of the Registration fee, provided that it shall not be less than

€30 or more than €380 per application registered.

Holders of a Registration Certificate who convert their Retention of

registered eligible assets into other assets shall, after registration, documentary

evidence.

retain the documentary evidence regarding such conversions or if no

such documentary evidence is available such other evidence in such

readable medium as may be available.

(1) Where the holder of a Registration Certificate is Notice of Tax

served with a notice of enquiry by the Inland Revenue Department in Enquiry.

terms of article 13(7) of the Income Tax Management Act, such Cap. 372.

person is required to produce the Registration Certificate to the Inland

Revenue Department within thirty days from the date of such

notification.

(2) In the event that the Registration Certificate is not

submitted to the Commissioner of Inland Revenue within thirty days

from the date of such notification without a justifiable reason, the

exemptions referred to in regulation 12(1) shall not apply.

(3) Where the Commissioner of Inland Revenue is satisfied

that such person was prevented from submitting the Registration

Certificate owing to a reasonable cause, he may extend the period for

submission of the said Certificate as may be reasonable in the

circumstances.

Section 4: Applicant’s Declaration

In completing Section 2, I/ we declare

1. to be the owner/joint beneficial owner(s) or the originator(s) of the

registered assets or the heir or legatee of such person(s);

2. that the registered assets were owned by me/us on 4 November 2013

and are still owned by me/us on date of registration;

3. that these assets are being registered only once under this Investment

Registration Scheme and that these assets have not already been registered in any

form under the Investment Registration Schemes established by virtue of Legal

Notice 315 of 2001, Legal Notice 59 of 2002, Legal Notice 209 of 2003, Legal

Notice 226 of 2003, Legal Notice 121 of 2005, Legal Notice 112 of 2007 and

Legal Notice 256 of 2014;

4. that the registered assets do not represent proceeds from a crime of

money laundering in terms of the Prevention of Money Laundering Act, or from a

crime that would result due to an infringement of any law other than the Income

Tax Act;

5. that the documentary evidence being hereby submitted to the Appointed

Registration Agent in support of the registered assets is true and original;

6. that I/we accept full responsibility for the accuracy and authenticity of

the information and of the documentary evidence submitted to the Appointed

Registration Agent under the Scheme;

7. that I/we will make available to the Appointed Registration Agent any

further information, statements or documents that it may require for the proper

exercise of its functions in terms of the Investment Registration Scheme;

8. that I/we hereby authorise the Appointed Registration Agent to provide

a copy of the Registration Certificate to the Central Bank of Malta as Central

Registration Certificate Depository;

9. that the declaration is being made in good faith;

10. that in return for my/our making this declaration and obtaining the

relevant exemptions arising from law upon registration, I/we hereby pay the

applicable registration fee based on (a) in the case of immovable property, the

original cost on date of purchase, and (b) in the case of all other eligible assets, the

market value of the eligible assets or the original cost whichever is the higher;

11. I/we understand that the submission of false statements and documents

will nullify this Certificate and render me/us liable to legal prosecution;

12. I/we also understand that in the event that I/we am/are receiving any

benefit, exemption or other advantage under the Social Security Act or under any

other scheme made by the Government or any public entity or under any other law,

as a result of not having declared the eligible assets being hereby registered (or

income therefrom), I/we shall not be required to refund that benefit, exemption or

other advantage acquired before this declaration. However, if after this

registration, I/we continue to take that benefit, exemption or advantage without

being entitled thereto, I/we shall be considered as never having enjoyed

exemptions referred to in article 9B of the Income Tax Act, and shall forfeit the

right not to refund any benefit, exemption or advantage acquired before the

Registration;

13. I/We undertake that any losses referred to in article 5(10)(a) and article

14(1)(g) of the Income Tax Act declared in the return for year of assessment 2013

and for any preceding year of assessment, whenever submitted, shall not be carried

forward and set off against my/our total income for the year preceding the year of

assessment 2014 or in any subsequent year;

14. I/We understand that in the event that I am/we are served with a notice

of enquiry by the Inland Revenue Department, I am/we are obliged to submit this

Registration Certificate to the said Department within thirty days from the date of

such notification. I/We also understand that if I/we fail to submit the Certificate

within thirty days without a reasonable cause, the exemptions referred to in article

9B of the Income Tax Act will not apply;

15. I/We undertake that in the event that I/we opt for the 5% registration

fee, I/we will repatriate the relative registered assets within two weeks after

registration date and invest such funds in locally listed securities or in deposits

with local banks. I/we undertake to retain such funds locally for at least three years

after date of registration.

Section 5: Appointed Registration Agent’s Declaration

In completing Section 3, we declare

1. that we have obtained the necessary information, statements and

documents required for the proper exercise of our function under the Scheme;

that we have retained copies of supporting documentary evidence as

necessary and undertake to continue retaining such documentation for 10 years;

3. that we are bound by the duty of professional secrecy in terms of the

Professional Secrecy Act and will not disclose any information contained in the

Registration Certificate other than to the Central Registration Certificate

Depository or by order of a Court;

4. that we ensure full compliance with the provisions of the Prevention of

Money Laundering Act and related regulations and the implementing procedures

issued by the Financial Intelligence Analysis Unit.

€1.26