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Taxation of Foundations

Written by Franco Falzon — Fri, 18 June 2010

The Foundations (Income Tax) Regulations, 2010 have clarified the position on the taxation of foundations. A foundation is treated as a company for tax purposes and subject to the normal corporate rate of tax. The profits derived by a foundation are subject to tax accounting. Distributions to the beneficiaries of a foundation are treated as dividends and the transfer of a beneficial interest in a foundation shall be treated as a transfer of a security in a company.

Foundations may also opt to be taxed in the same manner as a trust, in which case the relevant provisions governing the taxation of trusts will apply.

Foundations which are enrolled in terms of the Voluntary Organisations Act or established for the achievement of a social purpose and with a non-profit making intention are subject to lower rates of tax.

 

For more information, kindly contact:

Neville Cutajar - Managing Partner: neville.cutajar@3a.com.mt

 

 

Last Updated on Thu, 30 December 2010
 

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