Cap. 364 Art. 42CDuty on transfer of an interest in a partnership.

(1) A duty of two euro for every one hundred euro or part thereof of the amount or value of the consideration or the real value, whichever is the higher, of an interest in a partnership shall be charged:

(a) on every document whereby an interest in a partnership, other than in a foreign partnership, is transferred to or by any person in Malta;

(b) on a deemed transfer of an interest in a partnership referred to in sub-article (3), other than in a foreign partnership;

(c) on every notice of the transfer of an causa mortis interest in a partnership made in accordance with article 45. For the purpose of this article a transfer of an interest in a partnership shall include a transfer of a full or partial interest and any alienation of any such full or partial interest in a partnership and the term "foreign partnership" shall mean a partnership, which satisfies all of the following conditions:

(i) it is not a "property partnership";

(ii) it does not hold marketable securities in a company registered in Malta as defined in article 2 of the Income Tax Act;

(iii) it is not constituted, incorporated or registered under the Companies Act or under the

Commercial Partnerships Ordinance or under any other law in force in Malta. For the purpose of this paragraph "property partnership" shall have the same meaning assigned to it in article 2(1) of the Income Tax Act but the provisos to the said definition shall not apply: Provided that upon any restructuring of holdings through mergers, de-mergers, amalgamations and reorganisations, no duty shall be chargeable on:

(a) the transfer by an individual of a partnership interest, held in his own name, where had such partnership been a company, it would have been considered as forming part of a group of companies, in exchange of shares in a company or companies or interests in another partnership or partnerships, that would have been considered to form part of the same group had the partnership or partnerships referred to above been a company or companies;

(b) the exchange of a partnership interest for shares from one company to another where the company receiving the shares and the company whose shares are being exchanged are companies forming part of the same group of companies;

(c) the transfer of a partnership interest for consideration from a company or partnership to another company or partnership, where the transferor and the transferee form part of the same group of companies or where any or both of them are partnerships, would have been considered to form part of the same group if they had been a company or companies:

Provided further that where any partnership referred to in the immediately preceding proviso is a "property partnership", the immediately preceding proviso shall only apply where the individual, direct or indirect, beneficial owners of the companies referred to in the said proviso are the same and each such individual holds, directly or indirectly, substantially the same percentage interest in the nominal share capital and voting rights in each of the said companies both before and after the transfer or exchange, as the case may be. The provisions of article 32(6)(b) shall apply for mutatis mutandis the purpose of making such determination.

For the purpose of this proviso "property partnership" shall have the same meaning assigned to it in article 2(1) of the Income Tax Act but the provisos to the said definition shall not apply:

Provided also that the immediately preceding proviso shall not apply, where the said companies are, directly or indirectly, owned as to eighty percent (80%) or more by a company whose securities are listed on a stock exchange recognised by the Commissioner for the purpose of this provision.

(2) The provisions of article 42(2) shall apply mutatis mutandis to this article and references to the term "company", where applicable, shall be deemed to be references to a "partnership" and references to "sub-article (1)" shall be deemed to be references to "sub-article (1) of article 42C".

(3) Where a person acquires or increases a partnership share, there shall be a deemed transfer of an interest in the partnership (to that partner and from the other partners). "Partnership share" means the share to which a person is entitled in the income of the partnership and to the assets available for distribution on the winding up of the partnership: Provided that this sub-article shall only apply where the partnership in question is a commercial partnership en nom collectif or commercial partnership en commandite the capital of which is not divided into shares.

(4) Notwithstanding the provisions contained in this Act, the Minister may make rules determining the method of calculation of the amount or value chargeable to duty in relation to a transfer or deemed transfer of an interest in a partnership and to prescribe any matter that may be prescribed in relation to such transfer.