A foundation shall be treated in the same manner as a company that is ordinarily resident and domiciled in Malta and any regulations pertaining to the taxation of income applicable to companies shall equally apply to foundations. Tax shall be payable on the profits of a foundation at the rate of 35% and it shall be payable in the same manner applicable to companies. For this purpose, distributable profits of a foundation are the total profits available for distribution to beneficiaries, resulting from the income of the foundation. Distribution of profits, shall be treated as if they were dividends distributed to shareholders of a company and any transfer of a beneficial interest in the foundation by such beneficiaries, shall be deemed to be a transfer of a security for all the purposes of the Income Tax Acts.
The administrator may, however, irrevocably elect to tax Foundations in the same manner as Trusts. When such election has been made, the provisions of the Income Tax Acts and any regulations applicable to Trusts, shall be applied to the founder, the foundation and the beneficiaries.
When a foundation is established with segregated cells as aforementioned, each of the said foundation shall be deemed to be a separate foundation and for income tax purposes, what is applicable to the foundation will be applicable to each separate cell.