Taxation of gains or profit from activities carried out in an Exclusive Economic Zone

The Proviso to Article 4(1) of the Income Tax Act (CAP 123) has been revised by Act XXXV of 2023 to stipulate that income or capital gains arising from activities carried out in an exclusive economic zone area deemed to be carried out in Malta for the purpose of the Income Tax Acts only where such activities  are licensed or otherwise authorised to be undertaken in accordance with the Exclusive Economic Zone Act. The proviso clarifies that transfers of assets situated within the exclusive economic zone area shall be deemed to have taken place in Malta and the provisions of articles 5 and 5A of the Income Tax Act apply accordingly.

A new enabling provision (article 96(5)) allows the Minister for finance to make, amend, substitute or repeal rules or regulations in relation to the tax treatment of activities carried out within an exclusive economic zone area.

 

A similar enabling provision has been introduced in the Excise Duty Act, the Duty & Documents & Transfers Act, and the Import Duties Act.