| PRESCRIBED FUNDS STATUS | Established in Malta and have over 85% of assets which are situated in Malta |
A prescribed fund is an investment scheme which has declared to the Commissioner of Inland Revenue in Malta that the value of its assets situated in Malta amounts to at least 85% of the value of the total assets of the fund. Maltese funds which do not have such an exposure to Maltese assets and have made a declaration to that effect are classified as non-prescribed funds.
Broadly:
- A prescribed fund is exempt from tax in Malta except for certain types of investment income which are subject to a withholding tax of 10%. Bank interest is taxed at 15%;
- A non-prescribed fund is exempt from Maltese income tax on any income and capital gains other than for income derived from immovable property situated in Malta; and
- For both, the income derived from immovable property situated in Malta is subject to a 35% tax and to a final withholding tax of 8% or 10% on income derived from the transfer of immovable property situated in Malta.