S.L. 123.189 Art. 2Definitions. Cap. 123. S.L. 123.114 S.L. 123.114 Cap. 484. S.L. 123.88

(1) In these rules, unless the context otherwise requires:

"Act" means the Income Tax Act;

"company" has the same meaning as set out in the definition of the term in article 2(1) of the Act and includes:

(a) a trust arrangement whose trustee has made an election in terms of article 27D(1)(a) of the Act; and

(b) a foundation as defined in the Foundations

(Income Tax) Regulations, and when applied to a trust arrangement or foundation, the terms "share", "shareholder", "ordinary shareholder", "capital", "profits available for distribution" and "winding up" shall be read and construed so as to mean what is essentially equivalent in nature or purpose within the context of the said trust or foundation:

Provided that the term "company" shall not include:

(i) a foundation whose administrators have made an election in terms of rule 4 of the Foundations (Income Tax)

Rules;

(ii) a securitisation vehicle in terms of the Securitisation Act; and

(iii) a finance leasing company as defined in the Finance Leasing Rules;

"fiscal unit" means a fiscal unit formed in terms of rule 3 and shall comprise the principal taxpayer and all its direct and indirect transparent subsidiaries;

"ignored transactions" shall have the meaning assigned to it in terms of rule 6(a); "parent company" means a company that holds shares in another company (hereinafter, for the purposes of this definition, "the subsidiary company") that, in the year prior to the year of assessment in which an election in terms of rule 3(1) is made, meets any two of the following conditions:

(a) the parent company holds at least ninety-five per cent (95%) of the voting rights in the subsidiary company;

(b) the parent company is beneficially entitled to at least ninety-five per cent (95%) of any profits available for distribution to the ordinary shareholders of the subsidiary company;

(c) the parent company would be beneficially entitled to at least ninety-five per cent (95%) of any assets of the subsidiary company available for distribution to its ordinary shareholders on a winding up:

Provided that for the purposes of these rules, a subsidiary company of a parent company that meets any two of the conditions set out in paragraphs (a) to (c) of this definition shall be referred to as a "ninety-five per cent (95%) subsidiary":

Provided further that a ninety-five per cent (95%) subsidiary shall be referred to as a "one hundred per cent (100%) subsidiary" where both of the satisfied conditions referred to in the immediately preceding proviso are satisfied at a percentage of one hundred per cent (100%) instead of ninety-five per cent (95%):

Provided also that when applied within the context of a trust or foundation a beneficiary shall only be deemed to have satisfied the requirements of paragraph (a) of this definition where, and only for so long as, that beneficiary has a vested right, whether resulting from the terms of the settlement or the deed of foundation or whether subsequently arising as a result of the exercise of a power or discretion by the trustee of the trust or the administrator of the foundation, to at least ninety-five per cent (95%) of the distributable income of the trust or foundation and at least ninety-five per cent (95%) of the capital of the trust or foundation:

Provided further that when applied within the context of a cell company referred to in the first proviso to the definition of "company" in article 2(1) of the Act, any cell and that part of a cell company in which non-cellular assets are held (hereinafter "the core"), shall constitute a parent company and a ninety-five per cent (95%) subsidiary to the extent that at least ninety-five per cent (95%) of the voting rights, profits available for distribution to ordinary shareholders and assets available for distribution to ordinary shareholders on a winding up in the particular cell or the core are owned by the same persons and in such case the election made in terms of rule 3(1) shall indicate which of the cells or the core shall constitute the parent company and which shall constitute the ninety-five per cent (95%) subsidiary;

"principal taxpayer" means a company which -

(a) is not a transparent subsidiary; and

(b) is the parent company of one or more transparent subsidiaries:

Provided that the principal taxpayer shall at all times be one that satisfies the conditions applicable to "a company registered in Malta" as set out in article 2(1) of the Act;

"tax due by the fiscal unit" shall mean the tax due by the fiscal unit on the chargeable income of the fiscal unit as computed in accordance with these rules;

"transparent subsidiary" shall have the meaning assigned to it in terms of rule 3(2)

(2) Any terms not defined in sub-rule (1) shall, unless the context otherwise requires, have the meaning assigned to them in the Act.