Stamp Duty on transactions or arrangements involving Distributor Ledger Technology (DLT) Assets

The Commissioner for Revenue has on the 1st November 2018 issued guidelines to clarify its position on the stamp duty implications of transactions involving the use of DLT assets. Stamp Duty is tax imposed by the DDTA on the acquisition of specific types of assets such as marketable securities and immovable property.

The type of DLT assets covered by the said guidelines are coins and tokens where the latter are further classified into financial tokens and utility tokens. Electronic transactions in fiat currency do not fall within the scope of the said guidelines.

Coins (cryptocurrencies) are designed solely as a means of payment or medium of exchange or used as a store of value.  Financial tokens are analogous to equities, units in collective investment schemes (CISs), debentures or derivatives, where they grant the same income. On the other hand, Utility Tokens can only be used to buy goods or services within limited DLT platform/s.

Stamp Duty Implications under the Duty on Documents and Transfers Act (DDTA)

The transactions involving DLT assets are subject to the current provisions of the DDTA. Therefore the same stamp duty implications applicable to any other transaction will apply to transactions involving DLT assets, taking into consideration the nature of the activities, the status of the parties involved and the specific facts and circumstances of the case.

(i)                 Payments  made in Coins or Tokens

Payments made in coins or tokens are treated in the same way as payments made in any other currency for stamp duty purposes. The value therefore is to be determined by reference to the rate established by the Maltese authority and when this is not available one should refer to the average quoted price on three reputable exchanges on the date of the transaction or any other methodology to the satisfaction of the Commissioner for Revenue.

(ii)              Transfer of Coins and Utility Tokens

Given their nature, the transfer of coins and utility tokens falls outside the scope of the DDTA.

(i)                 Transfer of Financial Tokens

A transfer of a financial token that has the same characteristics of a marketable security as defined in the DDTA, shall be subject to stamp duty. The stamp duty amounts to Eur2 for every Eur100 or part thereof of the higher of the consideration and the real value of the financial token being transferred. 

How can we help?  

For further information, please contact either Elaine Camilleri on [email protected] or Stephen Balzan on [email protected]

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 [email protected]. 

Disclaimer  

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.

 

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