A new legal notice has been introduced, which regularises applications for formal rulings on the tax or stamp duty implications of a merger or division. The Commissioner for Revenue shall, in his absolute discretion, determine:
(a) the tax to be charged on any income[1], the tax on any capital gain upon the transfer of securities or from a transfer of value in securities[2] and the application of the related specific anti-abuse provisions[3], and the application of the general anti-avoidance provisions in the Income Tax Act[4];
(b) the application of tax relief:
a. in a transfer between companies forming part of the same group[5], whether or not a transfer of a capital asset[6], and
b. in an exchange of shares pursuant to restructuring [7];
(c) the application of the anti-abuse provisions in relation to stamp duty[8];
(d) the application of duty upon a transfer of marketable securities and the application of duty relief:
a. to the transfer of real right over immovable property transferred between companies in the same group[9], and
b. to the division of a company where the ultimate individual beneficial shareholders remain the same before and after the division[10].
The Commissioner shall particularly look into whether the transactions are to be entered into for bona fide commercial reasons, and that they do not form part of an arrangement the main purpose of which is tax or duty avoidance. The conditions that the Commissioner may impose in his ruling shall have effect notwithstanding any other provisions of the Income Tax Act and the Duty on Documents and Transfers Act.
[1] Article 4, ITA
[2] Article 5(1)(a)(iv), ITA
[3] Article 5A(12A), ITA
[4] Article 51, ITA
[5] Article 5(9), ITA
[6] Article 5(14), ITA
[7] Article 5A(4)(f), ITA
[8] Article 3(3) and (4), DDTA
[9] Article 32(6), DDTA
[10] Article 41A, DDTA
