The applicability of the participation exemption on dividend income and capital gains from participating holding investments has been widened by reducing the ‘qualifying’ percentage or minimum equity threshold from 10% to 5%.
The type of entities in which the ‘participating holding’ is held has also been widened and now includes not only companies, partnerships, collective investment schemes (CIS) or other bodies of persons but also EEIGs (European Economic Interest Grouping).
These amendments make the participation exemption for Maltese companies more accessible especially when one considers that there are various other conditions which may be satisfied apart from the minimum 5% equity investment.
These changes are effective from 29 March 2018.