A self-managed Collective Investment Scheme (CIS) which is licensed in Malta has a duty to set up an in-house Investment Committee (IC) composed of a minimum of three members, in order to perform the required investment fund management services. Meetings of the IC are to be held at least on a quarterly basis, the majority of which are required to physically take place in Malta.
The Maltese tax authorities have recently clarified that the remuneration received by an IC member for providing the relevant management services is to be considered as income derived from the rendering of services. In essence this implies that IC members who are not resident in Malta are only taxable in Malta depending on the portion of remuneration which is deemed to arise in Malta in respect of management services which are physically conducted in Malta.
It is understood that the amount of remuneration which would be deemed to arise in Malta in a given calendar year and which therefore would be subject to tax in Malta would be established according to the higher of the following:
i. The actual number of days during which the IC member is physically present in Malta; and
ii. 1/12th of the IC member’s compensation.
These criteria could be rendered inapplicable where a tax treaty which may exist between Malta and the country of residence of the non-Maltese resident IC member provides for a different tax treatment. In fact, Malta would have no jurisdiction to tax the remuneration received if the treaty bestows such jurisdiction on the country of residence of the IC member.
A self-managed Collective Investment Scheme (CIS) which is licensed in Malta has a duty to set up an in-house Investment Committee (IC) composed of a minimum of three members, in order to perform the required investment fund management services. Meetings of the IC are to be held at least on a quarterly basis, the majority of which are required to physically take place in Malta.
The Maltese tax authorities have recently clarified that the remuneration received by an IC member for providing the relevant management services is to be considered as income derived from the rendering of services. In essence this implies that IC members who are not resident in Malta are only taxable in Malta depending on the portion of remuneration which is deemed to arise in Malta in respect of management services which are physically conducted in Malta.
It is understood that the amount of remuneration which would be deemed to arise in Malta in a given calendar year and which therefore would be subject to tax in Malta would be established according to the higher of the following:
i. The actual number of days during which the IC member is physically present in Malta; and
ii. 1/12th of the IC member’s compensation.
These criteria could be rendered inapplicable where a tax treaty which may exist between Malta and the country of residence of the non-Maltese resident IC member provides for a different tax treatment. In fact, Malta would have no jurisdiction to tax the remuneration received if the treaty bestows such jurisdiction on the country of residence of the IC member.