The Federal Tax Authority issued Ruling No. 58/2013 on 27 August 2013, published in the Official Gazette on 30 August 2013, concerning the tax treatment of amounts deposited into escrow accounts associated with specific conditioned transactions.
According to the Ruling, the occurrence of income tax on a capital gain rising from the disposal of assets and rights regarding the income settled in an ‘escrow account’ should be ratify when the effective economic or legal availability of these assets arise for the seller, after fulfillment of all situation of legal transaction. The transaction is therefore only recognized for tax purposes when the whole transaction is complete and the relevant conditions have been fulfilled.
