The taxation of company shares under Maltese law (is it compatible with EU law?)

Abstract

This thesis is a critical analysis of the taxation of company shares under Maltese law in order to test whether this is compatible with EU Law. Chapter 1 identifies the boundaries of this study and it defines the company and share and also considers the juridical nature of a share. Chapter 2 deals with the duty levied on the transfers of shares making a distinction between local and foreign shares. It also considers procedural issues and analysis when the tax arises and when it is payable as well as the various provisions in the law, which are intended to protect the collection of the duty. Chapters 3 and 4 analyse the income tax of dividends and the CGT of shares; in particular, these tackle dividends in the hands of the shareholders and how economic double taxation is avoided. Consideration is also given to the meaning of distributions and anti-avoidance provisions. These chapters also show that the CGT provisions have not blended well with the IT legislation and the latter is not totally in tune with the CA. Chapter 5 demonstrates that the EU direct taxation is scarce and that this is what made international tax practitioners and even Member States ignore the impact on national fiscal laws. The domestic law is measured against this background in the light of the relevant Directives and cases of the ECJ. Chapter 6 shows that our national tax legislation has to be re-drafted in order not to fall foul of some of the treaty obligations. This is but a brief warning that even if the EU has taken the co-operation route rather than the harmonisation avenue, unless our attitude towards European Direct Taxation changes, we may experience the same difficulties some of the Member States have confronted.