The tax treatment of collective investment schemes : a comparative analysis

Abstract

This thesis analyses the tax treatment of CISs in Malta and compares it with tax regimes applicable in selected other jurisdictions. This is being done with a view to determining how competitive the Maltese tax system is in comparison with such foreign tax systems and evaluating whether tax amendments may be required so as to improve Malta's position as a fund domicile of choice. The first chapter deals with a general introduction to the subject, particularly highlighting the regulation of CISs in Malta and also the benefits of investing through a fund. Chapter 2 provides an analysis of the tax treatment of CISs in Malta, particularly in terms of the Income Tax Act, the Duty on Documents and Transfers Act and the Value Added Tax Act. Chapter 3 focuses on the European Union dimension, particularly the UCITS IV Directive. The tax obstacles which are expected to arise with the incorporation of the latter Directive are also discussed. In chapter 4 an analysis of the income tax treatment of CISs in selected jurisdictions, namely Luxembourg, Ireland, the UK, and the Cayman Islands is carried out with a view to highlighting the approach adopted by such jurisdictions in respect of the taxation of funds and identifying comparative advantages and drawbacks between them and the Maltese tax system. Finally in chapter 5, some minor suggestions for amendments are made with a view to further improving the attractiveness of the Maltese tax system in respect of funds. The final chapter also discusses other factors which make Malta an attractive fund domicile of choice including approachability of the MFSA and EU Membership.