S.L. 123.176 Art. 3Cap. 372

(1) For the purpose of ascertaining the total income of an undertaking for a year of assessment, the undertaking shall be entitled to a deduction for sums that are deemed to be payable by way of interest on risk capital or such part thereof as may be determined by the undertaking for the particular year:

Provided that the entitlement to a deduction in terms of this sub-rule shall apply only in respect of profits which stand to be allocated to a company's Foreign Income Account or Maltese Taxed Account or in respect of profits of any other undertaking which, had it been a company, would have stood to be allocated to its Foreign Income Account or Maltese Taxed Account. In any such case, the limitation set out in sub-rule (2) of rule 4 shall be calculated on the basis of the undertaking's income which stands to be allocated to Foreign Income Account or Maltese Taxed Account or which would stand to be so allocated if the undertaking were a company.

(2) The deduction referred to in sub-rule (1) shall be claimed at the option of the undertaking in the return made pursuant to article 10 of the Income Tax Management Act, so however that such deduction may only be claimed if it is demonstrated that all shareholders or partners of the undertaking approve the claiming of such deduction in respect of the particular year of assessment.

The undertaking shall be entitled to a deductionagainst such income for sums that are deemed to be payable by way of interest on risk capital.