Amendments to the Capital Gains Rules

By means of Legal Notice 379 of 2017, the Government of Malta has made a number of amendments to the Capital Gains Rules, which were originally issued by means of Legal Notice 102 of 1993 as subsequently amended by various Legal Notices. 

(i)                 Transfer of shares that have been admitted for trading on an alternative trading platform

Any capital gains derived from the transfer of shares by the original shareholders (as defined below) which is made in consequence of the admission of those shares for trading on an alternative trading platform will be calculated in the manner prescribed by the rules.  However, the gain derived will be multiplied by a percentage as indicated below depending on the level of public participation in the company in which the shares are held.

Level of public participation Taxable portion
Less than 10% 100%
At least 10% but less than 15% 75%
At least 15% but less than 20%    50%
At least 20% but less than 25%    25%
25% or more 0%

Furthermore, when persons who are not the original shareholders transfer shares in a company that have been admitted for trading on an alternative trading platform and the level of public participation in the company is at least 10%, no tax will be due on the capital gains derived. 

The original shareholders consist of:

  1. Persons who were shareholders of the company before any shares in that company were admitted for trading on an alternative trading platform.

  2. The spouse, direct descendant or the spouse of a direct descendant of an original shareholder.

  3. A legal entity whose beneficiaries consist as to more than 50% of original shareholders, or which is owned and controlled, directly or indirectly as to more than 50% by such original shareholders.

  4. A shareholder in a company who acquired his shares from an original shareholder by means of a transfer ‘causa mortis’ to which the reduction in the taxable proportion referred to in the above table was not applicable.

An alternative trading platform is a multilateral trading facility where the majority of the financial instruments admitted to trading are issued by small and medium sized enterprises (SMEs) and which is operated by a Stock Exchange recognized by the Financial Markets Act (The Malta Stock Exchange PLC and The European Wholesale Securities Market Limited).

The level of public participation referred to above is the percentage of equity shares held by persons who are not the original shareholders at the end of the day when the transfer in question takes place. 

(i)                 Gains derived from the transfer of intellectual property or intellectual property rights

In the calculation of any capital gains derived from the transfer of intellectual property or intellectual property rights, the cost of acquisition shall not include any amounts in respect of which a deduction has been claimed in terms of Article 14(1)(m) of the Income Tax Act. 

Article 14(1)(m) of the Income Tax Act provides for a deduction of any expenditure of a capital nature on intellectual property or any intellectual property rights which is incurred by a person in the production of the income.  The expenditure is spread equally over the life of the relevant intellectual property or rights in a reasonable manner, which cannot exceed three consecutive years, the first year being that in which the said expenditure has been incurred. 

How can we help? 

For further information, please contact either Stephen Balzan on or Elaine Camilleri on  ACT can help you understand the changes to the capital gains rules and how these can impact your business. 

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on 


This article contains general information only and is not intended to address the circumstances of any particular individual or entity. ACT, by means of this article is not rendering any accounting, business, financial, investment, legal, tax, or other professional advice or service. This article is not a substitute for such professional advice, nor should it be used as a basis for any decision or action that may affect your finances or your business. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Before making any decisions or before taking any action that may affect your finances or your business, you should consult a qualified professional adviser. ACT shall not be responsible for any loss whatsoever sustained by any person who relies on this article.  

17th February 2018

Corporate Taxation
in Malta

Maltese companies are subject to tax at the rate of 35% on their world wide income and capital gains.   Malta grants various fiscal incentives to both companies and their shareholders upon distribution of a dividend.  Malta is a membe...

Learn More

Setting up a Company
in Malta

Setting up a company in Malta is a relatively straight forward procedure and can be set up within 2 working days, provided we are in receipt of all the information, funds and due diligence documentation we need. The Act that regulates Malte...

Learn More

Taking up Residence
in Malta

Warm climate, friendly people, excellent communication infrastructures, low criminality and many other features of the Maltese islands have made Malta an excellent destination for people to take up residence in. Moreover low rates of taxati...

Learn More

Remote Gaming
in Malta

Malta was the first EU Member State to specifically regulate the remote gaming industry in 2004 and has ever since established itself as one of the prime jurisdictions for remote gaming operators. The Malta Gaming Authority (“MGA”) is the regulatory of gaming in Malta. The success o...

Learn More

Payment Institutions
in Malta

Malta has become a destination of choice for the setting up of Payment Institutions (also referred to as Payment Services Providers or PSPs).  A number of advantages has contributed to this success, mainly but not limited to the fiscal incentives granted not only to the payment institutions ...

Learn More

Electronic Money Institutions
in Malta

Malta has recently seen an increase in the number of Electronic Money Institutions (EMIs) looking to set up their operations in Malta.  This has been largely due to the growth in the e-commerce and the i-gaming industries.  Such EMIs are regulated by the Financial Institutions Act and t...

Learn More

Initial Coin Offering (ICO) Services
in Malta

Malta has always been on the forefront of technology and innovation.  In the past months, a number of initiatives have been launched, aimed at establishing an innovative and attractive regulatory framework for entities operating in blockchain (and distributed ledger technologies), virtual cu...

Learn More

Prospects Services of a Corporate Advisor
in Malta

‘Prospects’ is a new platform set up by the Malta Stock Exchange in line with its commitment to open up new capital market opportunities, create economies of scale and to afford businesses more competitiveness and sustainability.  Through ‘Prospects’, SME’s wil...

Learn More

Assistance to Family Businesses
in Malta

Malta has recently introduced legislation to encourage good governance in the management of family businesses, to assist family businesses to operate their business in an efficient way and to assist such family businesses to transfer their business from one generation to the other.  Malta is...

Learn More

Members of