S.L. 123.114 Art. 3Foundations taxed as companies. Cap. 386. Cap. 492.

(1) A foundation shall, for the purposes of the Income Tax Acts, be treated in the same manner as a company that is ordinarily resident and domiciled in Malta and any rules pertaining to the taxation of income applicable to companies as provided for under the laws of Malta shall equally apply to foundations. Tax shall be payable on the profits of a foundation at the rate specified in article 56(6) of the Act and it shall be payable in the same manner applicable to such companies.

(2) Distributable profits shall be allocated in the same manner applicable to such companies. For the purposes of this regulation, distributable profits of a foundation shall mean the total profits which are available for distribution to the beneficiaries resulting from the income of such foundation from the sources specified in Part II of the Act.

(3) The administrator of a foundation shall be answerable for doing all matters and things required to be done under the Income Tax Acts for the purposes of the determination, assessment and payment of tax in connection with the income of the foundation. Where two or more persons act in the capacity of administrators of the same foundation, they shall be jointly and severally so answerable. In particular, the administrator of a foundation shall keep all records, submit all returns and documents and pay tax to the Commissioner as is required in the case of companies. Where the Income Tax Acts require documents which are to comply with the Companies Act, the administrator shall submit similar documents, certified by a certified public auditor, and which are either provided for under specific provisions under the Laws of Malta for foundations or, in the absence of such provisions, which comply as far as possible, with the Companies Act.

(4) Distributions of profits allocated in accordance with the provisions of sub-regulation (2) to beneficiaries of a foundation shall be treated as if they were dividends distributed to shareholders of a company and any transfer of a beneficial interest in the foundation by such beneficiaries shall be deemed to be a transfer of a security for all the purposes of the Income Tax Acts.

(5) Notwithstanding the previous sub-regulations of this regulation, in the case of a foundation that is enrolled in terms of the Voluntary Organisations Act, or not being so enrolled is established for the achievement of a social purpose and is non-profit making, the provisions of this regulation shall only apply where such foundation informs the Commissioner in writing that it opts irrevocably to be so treated from a particular year of assessment onwards. Where such foundations do not exercise this option, tax shall be chargeable on the relevant profits at the rate specified in article 56(1)(d) subject to the provisions of 56(9)(b) of the Act.