Funds in Malta are classified as either prescribed or non-prescribed funds. A prescribed fund is one which has declared that the value of its assets situated in Malta amount to at least 85% of the value of the total assets of the fund. Maltese resident funds which do not have such an exposure to Maltese assets and all non-resident funds are treated as being non-prescribed.
Non-prescribed funds are exempt from Maltese income tax on any income and capital gains (except when they hold property in Malta). Additionally, through the used of double taxation agreements, funds are in a position to claim any tax imposed by other countries on their underlying investments.
Where the service provide to a fund is specific to and essential for the core activity of the scheme (example: management and administration), no VAT is applicable. Other services will incur VAT at 18% and this is not recoverable.
Capital or income gains realised by non-resident investors are not subject to tax in Malta.
There are no NAV or subscription tax.
Fund Manager, Promoter or Staff's Tax
Fund Management companies operating in Malta are entitled to avail themselves of Malta’s full imputation tax system and refunds (same procedure applicable to a company, partnership or trust).
On an individual basis, fund managers may also avail themselves of the Malta Highly Qualified Persons Rules allowing them a flat tax rate of 15% and tax exemption when income exceeds a threshold amount.