AN ACT to amend the Income Tax Act, Cap. 123.

I assent.

(LS.)

Uoo MIFSUD BONNICl

President

20th August, 1996

ACf No. XX of 1996

AN ACT to amend the Income Tax Act, Cap. 123.

BE IT ENACTED by the President, by and with the advice and

consent o f the House of Representatives. in this present Parliament

assembled, and by the authority of the same as follows:-

I . (1) This Act may be Ciled as the Income Tax (Amendment)

Act, 1996, and shall be read and construed as one with the Income Tax i

Act, hereinafter referred to as "the principal ACI" ,

'

(2) The provisions of this Act shall be deemed 10 have come

into force as follows

(a)

the provisions of section 5 and of subsection (I) of

section 22 shall be deemed to have come into force on the 28th

July. 1995

(b) the provisions of section 19, of paragraph (d) of section

21 and of subsection (2) of section 22 shall be deemed to have

come into force on 1st January, 1996 with effect from the year of

assessment 1997;

(e)

the provisions of sections 2 to 4, 6 to 10, 12 to 18, 20

and of paragraphs (a) and (e) of section 21 shall come into force

with effect from the year of assessmenl commencing on the lsi

January, 1997;

(d) the provisions of paragraph (e) of section 21 shall come

into force on 1st January, 1997 with effect from the year of

assessment 1998;

(e) the provisions of paragraph (b) of section 21 shall be

deemed to have come into force on the 26th March, 1996; and

(f) the provisions of section 11 shall be deemed to have

come into force on the 23rd September. 1994.

In subsection (I) of section 2 of the pri ncipal Act

AI

_2,,(1ho

prin<il* MI .

(a) in the definition of "certified public auditor", for the

words " in section 14 1 oflhe Conunercial Partnerships Ordinance;"

tbere shall be susbstituted the words "in section 1 S3 of the

Companies Act, 1995;" and for the marginal note "Cap. 168."

relative thereto there shall be substituted the words "Act XXV of

1995.";

(b) in the defini tion of "chargeable income", the words

", after allowing the deductions under Part VI of this Ac t" shall

be deleted;

(c) in paragraph (a) of the defi nition of "company" • forthe

words "the Commercial Partnerships Ordinance," there shall be

substituted the words "the Companies Act, 1995," and for the

marginal note ''Cap. 168." relative thereto there shall be substituted

"Act XXV of 1995.";

(d) immediately afte r the definition of "incapacitated

person", there shall be inserted the followi ng new definition

.. "industrial building or structure" includes a building

used as a hotel. For the purpose of this defi nition the word

"hote l" includes any number of constructions suitably

furn ished and equipped. with accommodation in single or

double bedrooms, provided that such constructions are

grouped together and have in common ancillary hotel services

and amenities withi n a single and defined parcel of land and

are o perated by a common management for the ·

accommodation and for the use of guests against payment;";

(e) immediately after the defini tion of "Maltese taxed

account" there shall be insened the fo llowing new defin itions

""married couple" refers to two spouses who contracted

marriage in accordance with the legal provisions of the country

where the marriage was executed;

"married individ ual" refers to a male individual who

has a wife or a female individual who has a husband, livi ng

with him or with her respectively, as the case may be;"; and

(0 the definition of "person" shall be amended as follows

""person" includes -

(a)

a body o f persons; and

(b) a responsible spouse in accordance with

section 49 of this Act;",

Paragraph (f) of subsection (1) of section 4 of the principal Act

shall be deleted.

Immediately after paragraph (g) of su bsection (5) of section 5

of the principal Act, there shall be added the following new paragraph

"(h) where the immovable property or the undivided part of

the immovable property was obtained by the transferor causa

mortis, orwas obtained by the transferor in a partition ofi nunovable

propeny obtained by the co-panitioners causa mor1is. ",

Section 9A of the principal Act shall be amended as fo llows

(a) in paragraph (a) of subsection (8) thereof, for the words

"31st October 1995" there shall be substituted the words "15th

December, 1995";

(b) in paragraph (a) of subsection (1 0) thereof, for the words

"31st October 1995" there shall be substituted the words "15th

December, 1995".

Paragraphs (m) and (r) o f subsection ( 1) of seclion 12 of the

principal Ac t shall be deleted.

Subsection ( I) o f section 14 of the principal Act shall be

amended as follows

(a) in paragraph (e) thereof, for the words "under section

53(1)(b)(ii)" the re shall be substi tu ted the words "as may be

prescribed"; and

(b) in subparagraph (i) of paragraph (f) thereof, for the

words "one per cent" there shall be substituted the words ''two per

cent",

Immediately after section 14 of the principal Act, there shall be

added the following section

14A . Notwit hstanding any thing to the contrary

contained in this Acl, if an individual proves to thesatisfaction

of the Commissioner that in the year preceding a year of

assessment he has paid to his estranged spouse an alimony

payment as detennined by the Courts of Malta, he shall be

allowed as a deduction against his income the lesser of these

amounts -

(a) the amount actually paid in accordance with

the Court order;

(b)

the individual 's chargeable income for the

year.".

9, In paragraph (g) of subsection ( I) of section 23 of the principal

Act, for the words "under section 53( I)(b)(iij"' there shall be substi tuted

the words "as may be prescribed".

In paragraph (a) of section 26 of tile principal Act there shall

be added inunediately after the word "expenses" the words "other than

alimony payments as prov ided for in section 14A of this Act'·.

In subsection (I) of section 28 of the principal Act for the A" ... d"".

words "paragraph (j)" there shall be substituted the words " paragraph o l _ 2 I

(k )".

Section 30 of the principal Act shall be amended as follows

(a) in paragraph (d) of subsection (I) thereof, for the words

"i n subsection (7) of section 53 of this Act;" the re shall be

substituted the words "in subsection (9) hereof;";

(b) in the proviso to subsection (4) and in subparagraph

(iii) of paragraph (b) of subsection (5) thereof. for the words "seven

hundred and seventy-five Maltese liri" there shall be substituted

the words "one thousand liri"

(c) immediately after subsection (5) thereof, there shall be

added the following new subsection

An ecclesiastical community shal l be entitled

.. (S A )

to a further deduction against its income as established under

subsection (5) of this section equivalent to one thousand Iiri

in respect of every individual who wa,s a member thereof

during the year inunediateJy preceding the year of assessment

Provided that no such deduction shall be allowed

under this subsection in respect of any individual member

who receives remuneration or other income from the

ecclesiastical community of whic h he is an individual

member.";

(d) in subsection (6) thereof, for the words "subsections

(4) and (5) of this section" there shall be substituted the words

"subsections (4), (5) and (5A) of this section"; and

(e) immediately afte r subsection (8) thereof, there shall

be added the following ncw subsection

"(9) For the purposes of this section and of subsection

(4) of section 56 of this Act -

"ecclesiastical community" means a number of

individuals living together in a community in accordance

with the rules of a religious order recognised as such by

the Commissioner;

"individua l member", in re latio n to an

ecclesiastical community, means any individual, lay or

religious. who formed part of such community on the

thin)' first day of December during the year immediately

preceding the year of assessment.".

For sections 49 and 50 of the principal ACllhere shall be

substituted the following new sections

49. (I) The income ofa married couple, where both

spouses are living together, shall be declared in a return

pursuant to the provisions of the Income Tax Acts signed by

both spouses, and will be charged to In in the name o f the

responsible spouse so elected by the spouses themselves for

the purposes of the Income Tax Acts

Provided that if the return is signed only by the

responsible spouse, or the other spouse on behalf of the

responsible spouse, the return sha1l in all cases be presumed

juris et de j ure to have been made with the consent of both

spouses

Provided further that if the spouses fail to appoint

the responsible spouse, the Commissioner shall at his

discretion decide who o(the spouses shall be the.responslble

spouse.

(2) Where a joint renun is required 10 be filed by

a married couple in accordance with the provisions of

subsection (I) hereof, both spouses will be jointly and

severally responsible for the performance of all obligations

pursuant to the provisions of the Income Tax Acts, and in

defauil the Commissioner shall be entitled, at his discretion,

to take such action 10 enforce performance of those

obligations against either or both of the splUscs

Provided thai in no case may any criminal action

be taken against a spouse for any act or omission for which

he or she may not be directly responsible.

(3) Where a married couple elects Ihal one of Ihe

spouses is 10 be the responsible spouse, such election shall

remain effective for a minimum period of five suooessive years

unless the Commissioner, at his sole discretion and for a

reasonable cause, authorises a change following a pelilion

signed by either spouse and filed with the Commissioner nOI

later than six monlhs before the first day of the year of

assessment in respecl of which such change is requested .

Notwi thstanding the provisions of s.ecti.on 49

50. (1)

of this Act, where in any year immediately preceding the year

of assessment the spouse nOI being the responsible spouse,

derives income subject to tax under the provisions of

paragraphs (a) or (b) of subsection (1) of section 4 of this Act

or of paragraph (d) of the said subsection in so far as it refers

to a pension which is received in view of the past employment

the responsible spouse may elect in writing that the tax on the

chargeable income in respect of such income derived by the

other spouse be computed separately. In such a case the

spouse's income shall not be aggregated with the responsible

spouse's total income for that year of assessment.

(2) The tax computed separately for each year of

assessment in respect of the income referred to in subsection

(I) hereor shall be charged in the name of the responsible

spouse.".

Forthe definition o r "child" in subsection (5) o f section 51 of

the principal Act, there shall be substituted the following

.. "child" includes

<a) a stepchild. or an adopted child, or an illegitimate

child of the individual or of the individual's spouse; or

a child orphan of or abandoned by either o f the

(b)

parents and living with the individual or the individual's

spouse;",

IS. Sections 53, 54, and S5 aflhe principal Act shall be repealed.

Minkcliakulll'laga ghall.kuntrarju Ii tinsab f'dan

. I·Au, jekk individwu j ipprova ghas-sodisfazzjon tal-

Kummissarju Ii fis.senaqabel sena ta' slimajkun ghamel hlas

ghall-mantc:niment kif siabbilit rnill-Qrati ta' Malia 1ill-pam

miHewga lilu Ii rna Ikun", baqghet tghi'" mic:ghu, dak 1-

individwu ghandu j inghala hhala tnaqqis kontra I·income

tieghu ,·jeten minn dawn J-ammonti -

(a) I·ammon! altwalmenl imhallas skond l-ordni

tal.Qoni;

(b)

I·jncome taxxabbli ta' I-individwu ghu-

sena,",

9. Fil-paragrafu (g) tas-subartikolu (I) ta' I-artikolu 23 ta' I-Att

principali . minflok il-kliem "skond l-artikolu 53(1)(b) (ii)" ghandhom

jidhlu I-Idiem "kif ikun preskritt".

10. Fil-paragrafu (a) ta' l-artikolu 26 la' I-Au principaJi

ghandhom minnufih wara l-kelma ''privati'' jidhlu l-kliem "minbarra

hlasijiet gl'lall-manlenimenl kifhemm provdut ghalihom fl-artikolu 14A

ta' dan I-Au",

11. Fis-subanikolu (I) ta' I-artikolu 28 ta' I-Au principali,

minflok il·kliem "Ial-paragrafu (j)" ghandhom jidhlu l-kliem "Ial-

paragrafu (k)",

12. lrartikolu 30 ta' I-Au prinCipaJi ghandujigi emendat Jcif gej

(a) fil-paragrafu (d) tas-subanikolu (I) lieghu, minnok il-

kliem "fi s-subartikolu (7)ta' l-artikolu 53 ta' dan I-Au;" ghandhom

jidhlu I-kliem "fis-subartikolu (9) lieghu;";

(b) fil -proviso Ii hemm ghas-subartikolu (4) u fis-

subparagrafu (iii) tal-paragrafu (b) tas-subartikolu (5) tieghu,

min nok il-kliem "seba' mija u hamsa u sebghin lira Mailija"

ghandhom jidhlu I-kliem "elf lira";

minnufih wara s-subartikolu (5) tieghu ghandu jii.died

(c)

dan is-subartikolu gdid Ii gej

"(SA) Kommunil3 ekldesjaSlika tkun intitolata ghal

tnaqqis iehor kontra I-incoml! laghha kif stabbil il fis-

s ubartikolu (S) ta' dan I-artikolu Ii jkun ekwivalenti ghal elf

lira dwar kull individwu Ii kien membru taghha matul is-sena,

minnufih qabcl is-sena ta' slima

lida ebda tnaqqis bhal dan rna jinghata tal'll dan is-

subartikolu dwar xi membru individwali Ii jircievi

.

ri muncrazzjoni jew income ichor mill-kommunitl

ekkJesjastika Ii taghha jkun membru individwali.";

(d) fis-subartikolu (6) lieghu, minflok il"kiiem "tas-

subartikoli (4) u (5) ta' dan l-artikolu" ghandhomjidhlu l-kliem

"tas-subartikoli (4),(5) u (SA) ta ' dan !.amkolu"; u

(e) minnufih warn s-subartikolu (8) tieghu ghandu jiZdied

dan is-subartikolu gdid Ii gej

"(9) Ghall-finijiet la ' dan I-artikolu u tas-subartikolu

(4) ta'J-artikolu 56 ta' dan I-Att -

"kommunitA ekklcsjaslika" trisser numru ta'

individwi lijghixu flimkien fkommunitA skond it-regcli

ta' ordni rcligjuz rikonoxxut bhala hckk mill-

Kummissarju;

"membru individwali", dwar kommunitA

ekklesjastika. tfisser kull indivimvu,lajk jew religjui, Ii kien

jaghmei patti minn dik i1-kommunitA til-wiehe<! u t1etin la'

Dieembru mawi is-sena minnufihqabei is-senata' stima ....

13. Minflok i-artikoli49 u .50 ta'i-Au prineipali ghandhomjidhlu ~ II'

~~y»

_-,,- 1- I g -odd a I" I geJJIn

...

da wn 1 -41UAO

II' I·Aa prioo!ipoIi.

49 . (I) L-incomt' ta' koppja miiiewga, meta r-ragei

u I-marajkunjghixu flimkien,ghandujigi ddikjarat fi prospett

skond id-dispoiizzjonijiet ta' I-Atti dwar it-Taxxi, iffinnat

miz-iewg konjugi, u ghandu jkun ikkuntjat f isem ii-konjugi

responsabbli hekk maghzul jew maghzula mill-konjugi

nnifshom ghall-finijiet ta' I-Ani dwar it-Taxxi

lzda jekk il-prospeu ikun iffirmat mill-konjugi

responsabbli biss.jew mill-konjugi I-iehor fi sem il-konjugi

respo nsabbli, il-prospett ghandu fiI-kaziji et kollha jkun

presunt juris et de jure Ii jkun sar bil-kunsens taz-iewg

konjugi

lida wkolljekk ii-iewg konjugijonqsu Ii jappuntaw

il-konjugi responsabbl i, i l- Kummissarju ghandu fid-

diskrezzjoni lieghujiddeciedi liema miIJ-konjugi ghandujkun

il-konjugi responsabbli .

(2) Fejn koppja m iHewga tku n mehtiega Ii

!issmtometti prospett komuni skond id-dispoiizzjonijie! tas-

subartikolu (I) ta' dan I-anikolu , ii -iewg konjugi jkunu

responsabbli in solidum ghall-qadi ta ' kull obbligazzjoni tatlt

id-dispoiizzjonijie! ta' I-Aui dwar it-Taui, u fnuqqas ta'

dan i1-KummissaJju jkollu d-dritt: fid-diskrezzjoni !ieghu,li

jiehu azzjoni ghat-twettiq lal-qadi ta' dawk l-obbligazzjonijiet

kontra I-wiehed jew I-iehor mii-iewg konjugi jew kontra i -

iewg konjugi

Iida febda kai rna tista' littiehed xi azzjoni krirninali

kontra konjugi ghal xi att jew nuqqas Ii ghalih huwajew hija

jisla' majkunxjew lista' rna tkunx direttament responsabbl i.

(3) Mela koppja miiiewga taghi.el Ii roragel jew il-

mara ghandu jkun jew ghandha tkun il-konjugi responsabbl i,

dik I-ghaila ghandha tibqa' effettiva ghal perijodu minimu

la' hames snin konsekutlivi kemm-il darba I-Kummissarj u,

fid-diskrezzjoni esklussiva tieghu u ghat raguni xierqa, rna

jawtorizzax bidla wara petizzjoni ffirmata rnir-rageljew mill-

mara u soltomessa lill-Kumrnissarju rnhux aktar tard rninn

sitt xhur qabell-ewwel jum las-sena ta' stima Ii dwama tintalab

dik iI-bidla,

50. (1 ) Minkejja d-dispoiizzjonijiet ta' l-artikolu 49

~':.:::- ta' dan I-Att, meta fx i sena min nufih qabel is-sena ta' stima

miao I-konjugi Ii rna jkunx jew rna tkunx iI-konjugi responsabbli

ji heb j ew tikseb income suggeu ghaHaxxa lah l id-

dispoiizzjonijiel tal-paragrafu (a) jew (b) las-subanikolu (I)

ta'l-artikolu4 ta' dan l-Aujew tal-paragrafu (d) ta' l-imsemmi

subartikolu safejn dan jirreferi ghal pensjoni Ii wiehed

jireievi mill-irnpieg ta' qabel, iI-konjugi responsabbli j ista'

jaghiel jew laghiel bil-miktub Ii t-taxxa fuq I-income

taxxabbli dwar income bhal dak deriva! mill-konjugi I-iehor

tigi k.kalkolata separatament. F ' kai bhal dan I-income tal-

konjugi majigix maghdud nimkien rna' I-income totali tal-

konjugi responsabbli ghaJ dik is-sena ta' stirna.

(2) It-tuxa kkalkolala separatament ghal kull

sena ta' stirna dwar I-income imsemmi fi s-subanikolu ( I) ta'

dan l-artikolu tiSi addebitata fisem il-konj ugi responsabbli,",

14, Minnok it-lirsira la' " wild" fi s-subaniko lu (5) ta' l-artikolu

51 ta' I-All principali , ghandu jidhol dan Ii gej

" " wild"tinkludi

(a) bin jew bint ir-ragel jew il-mara,jew tifel jew tifla

adottati,jew tifel jew tifla illegillimi ta' I-individwu jew tar·

rage! jew ta' mart ]-individwu; jew

(b) tife! jew ti na Itiema minn jew abbandunati mill-

missier jew l-omm u jghixu rna' \-individwll jew mar-ragel

jew mara ta' I-individwu ....

15 . L-artikoli 53, 54 u 55 ta' I· An prinCipali ghandhom 'TtIu.sil'll·

I ·orti~ oll '3. $4 u '5

Ia' 1·"'11 priotipali.

Section 56 of the principal Act shall be amended as follows

(a> for paragraphs <a) and (b) ofsubsection ( 1) thereof, there

shall be substituted the following new paragraphs (a), (b). (e) and

in the case of a married couple resident in Malta

"(a)

in the year immediately preceding the yearer assessment and

to whom section 49 of this Act applies saving where the

responsible spouse has opted for a separate computation for

the purposes of section 50 of this Act -

Oc

For every lira of the first lm4000

Forevery lira oflhe next LmISOO

15<

Forevery lira of the next Lm1500

20c

Forevery lira of the next Lml500

25c

Forevery lira of the next Lm1500

30e

For every lira of the remainder

35c

(b) in the case of any other individual resident in Malta

including each spouse where the responsible spouse has opted

for a separate computation for the purposes of section 50 of

this Act -

For every lira of the first Lm3000

Oe

For every lira of the next Lm 1000

15c

For every lira o f the next LmlOOO

20c

For every lira of the next LmISOO

25c

For every lira of the next LmlSOO

30e

For every lira oftne remainder

35c

(c) in the case of any indi vidual who is not resident in

Malta during the year immediately preceding the year of

assessmem -

For every lira of the first Lm300

For every lira of the nex! LmlSOO

For every lira of the nex! LmlSOO

25,

For every lira of the next LmlSOO

For every lira of !he remainder

35<

(d) in the case of any other person -

15,

For every lira of the first LmlOOO

For every lira of the next LmlOOO

For every lira of the next Lm 1000

25,

For every lira of the next LmlSOO

For every lira of Ihe remainder

3Sc.";

(b) for subsection (2) thereof, there shall be substituted the

following

"(2) Notwithstanding the provisions of subsection (I}

of this sec!ion, the tax upon the chargeable income of

individuals referred to in the said subsection shall be charged

at the following special rates

(a) In the case of an individual born outside Malta

wbo was resident in Malta in the year immediately

preceding the year of assessment and who proves to tbe

satisfaction of the Commissioner !hal he has received in

Malta alone or more times during the year immediately

preceding the year of assessment an amount of income

of not less than eight hundred Iiri arising outside Malta

and chargeable to tax under the provisions of this Act-

(i) being a married individual who files ajoim

return in terms of section 49 of this Act -

Oc

Forevery lira of the first Lm2500

For every lira of the remainder

15c

(ii) being any other such individual

Oc

For every lira of the first Lm1800

For every lira of the remainder

15c

Provided that subject to the provisions in the

next following paragraph, the rates laid down in

subparagraphs (i) and (ii) hereof will not apply if the

individual was domiciled in Malta or ordinarily resident

in Malta before the firs! day of January, 1958.

(b) The Minister responsible for finance may in

his discretion authorise the application of paragraph (a)

of this subsection in regard to any individual born outside

Malta, nothwithstanding that he was domiciled and/or

ordinarily resident· in Malta before the tinil day of

January, 1958, if the Minister is satisfied Ihal the said

individual was absent from Malia in the period between

the said dale and the thirty-first day of December, 1963,

saving occasional visits.

(e) In the case of an individual bom in Malta who

was resident in Malta in the year immediately preceding

the year or assessment and who proves to the satisfaction

of the Commissioner that he has aClUally resided outside

Malta for an aggregate period of not less than twenty

years after the first day of January, 1938 and rna! he has

received in Malta at one or more times during tbe year

inunedialeJy preceding tile year of assessment an amount

orincome ornot less than five hundred liri arising outside

Malta and chargeable to tax under the provisions of this

Act, the rates laid down under subparagraph (i) or (ii) of

paragraph (a) hereof, as the case may be, shall apply

Provided that-

(i) no such rates shall apply unless the

Commissioner is satisfied that the individual was

ordinarily resident and domiciled in Malta in the

year immediately preceding the year of assessment;

(ii) in computing the said aggregate period

o f twenty years there sball be excluded all calendar

years during which the individual was ordinarily

resident in Malta, and all periods prior to a date

which precedes by thirty years the first day of the

year of assessment in whic h the individual first

satisfies all the other conditions sti pulated in this

subsection,

(d) In paragraphs (a), (b) and (c) o f Ihis sub-

section -

"individua l born outside Maha" means an

individual not born in Malta whose parents were

not domiciled in Malta or not ordinarily resident in

Mal ta on the date of his birth or at any time during

the ten years previous to such date;

"received in Malta" means the excess of the

amount of income arising outside Malta and

received in Malta over any sum transferred out of

Malta.

(e) Tberates mentioned in paragraphs (a), (b) and

(c) of this subsection shall apply only to any individual

who was entitled to a further peThOnal deduction offive

hundred liri in any year of assessment up to the year of

assessment 1972, and, in the event of his demise, to the

sUlVlVmg spouse.

(0 Notwithstanding the provisions of section 49

the responsible spouse shall for the pwpose of this section

be the spouse in whose name the residence permit has

been issued.";

(c) for subsection (10) thereof there shall be substituted the

following

"(10) Notwithstanding the provisions of subsections

(I) and (2) of this section-

(a) in [he case of an individual who has been

granted a residence pennit under section 7 of tbe

Immigration Act, the tax upon the chargeable income,

other than income mentioned in paragraph (b) of this

subsection shall be charged at the rates laid down in

subparagraph (i) or (ii), as the case may be, of subsection

(2) hereof

Provided that the minimum tax payable in

respect of any year of assessment shall be one thousand

liri if the individual has been granted such residence

permit on or after the fourtecnth day of November, 1972

but before the fIrst day of January, 1988

Provided further that in the case of an

individual who has been granted such residence permit

on or after the first day of January, 1988 the minimum

liability in respect of any year of assessment shall, after

taking into account any double taxation relief to which

such individual may be entitled, be one thousand liri;

(b) income derived from Malta and chargeable

to tax under paragraphs (a) and (b) of subsection ( I) of

section 4 of this Act, shall be deemed to constitute

chargeable income to be taxed separately at the rates

laid down in paragraph (a) or (b) of subsection (1) of

this section staning at the rate of 15c on every Jira.";

(ii) In lhe case of income derived from Malia and

c bargeable 10 lax under paragraphs (a) and (b) of

subsection (I) of seclion 4 oflhis ACI, such income shall

be deemed 10 constilute chargeable income 10 be taxed

separalely al the rales laid down in paragraph (a) of

subsection (I) of this section starting at the rate of I x

on every lira.

(b) In the event of Ihe demise of any indi vidual 10

whicb paragraph (a) of this subsection applies and who is

charged to tax at the rates laid down in subparagraph (i) of

paragraph (a) subsection (2) hereof, the surviving spouse shall

be entitled to elect to be charged to tax in the same manner

and under the same conditions as the deceased individual and

charged at the rale.s laid down in subparagraph (ii) of paragraph

Ca) o f subsection (2) hereof, and until such election is not

renounced, the surviving spouse shall be considered 10 have

satisfied in his own right the qualifying period of absence

from Malta stipulated therein."; and

(e)

the proviso to subsection (17) thereof sball be deleted.

Sections S7 and S8 of the principal Act shall be repeaJed.

17.

In subsection (I) of section 77 of the principal Act, the words A

;:d;..TI ~~

"less any tax rebate granted under Part VIII, where applicable" shall be

For section 90A of the princi pal Act there shall be substituted

the following

9OA. (I) With effect from the 151 day of January

1996, where an individual is receiving full·time instruction

at a university, college or other similar educational institution

or was serving an apprenticeship with a view to qualifying in

a trade or calling, or where an individual has income in his

own right falling under paragraph (b) or (d) ofsubseclion (I)

of section 4 of this Act, and has during the year immediately

preceding the year of assessment otber income from such

part. time work as may be prescribed. he shall subject 10 the

other provisions of this section pay tax al the rate of IS

cents on every lira of such other income, and he shall not be

required to declare any such other income, in any return

made pursuanllo the Income Tax Acts

Provided that where the other income deri ved from

part-time work is income as is desc ribed in paragraph (a) of

subsection (1) of section 4 of this Act, the provisions of this

section shall apply with respect to thai olherincome only up

to such limit as may be prescribed.

(2) Notwithstanding the provisions of subsection

( I) of Ihis section, an)ndividual may dec lare all his income

from part-time work together with the rest of his income in

his return made in accordance with the Income Tax Acts, and

he will be charged tax on aU his income in accordance with

the provisions of paragraph (a) or (b) (as the case may be) of

subsection (I) of section 56 orlms Act, and in any such case

any tax paid on such other income in accordance with this

section shall be available as a credit against the individual's

tax liability and where any tax so paid is in excess of such

liability, it shall be refunded. .

Notwithstanding the provisions of subsection

(3)

(1) ormis section an individual. whose projected tOlal income

for a calendar year, including income derived from part-time

work, is not expected to exceed such sum over which he would

become liable to tax. may. if the income from part-time work

fa lls under the description in paragraph (b) of subsection (I)

of section 4 of this Act, at any time of the year by notice in

writing on the prescribed form, direct the employer with whom

he is perfonning part-time work not to deduct tax on his

income from part-time work. Such notice shall be valid only

up to the end of the calendar year in which it is given.

For the purposes of subsection (3) hereof

(4)

where an individual's annual wages or salary from his full

time employment exceed such amount over which he would

become liable to tax, or where in the previous year his lotal

income rendered him liable to tax, his projected total income

for the relevant year will be expecled to e xceed _~uch sum

over which he would become liable to tax.

(5) Where the lotal income of an individual who

has given notice as is provided in subsection (3) of this section,

during the year in which the said notice has been given reaches

such sum as would render such individual liable to tax, such

individual shall infonn the Commissioner accordingly on the

prescribed form and ifhee lcclS to pay tax on his other income

derived from part. time work in accordance with the provisions

of subsection (I) of this section he shall direct his employer

to deduct tax at the rate of I S cents in the lira, and furthermore,

.where he elects to pay tax on his other income derived from

part-time work in accordance with the provisions of subsection

(I) o f this section be shall either-

(a) direct his employer to make such furthe r

deduct ions from his income so that the tax due in

accordance with sl,!.bsection (I ) of this section on all

income deriving from part-time work as aforesaid is so

deducted by .the 31st December of that year. or

(b) pay such tax due, to the Commissioner by not

later than the 31st December of the year.

(6) Where an employer who in accordance with

this section is to deduct tax at IS cents in the lira fails for any

reason to deduct such tax , it shall be the duty of the individual

from whose income such deduction is to be made, to infonn

the Commissioner according ly and to make payment of the

tax due directly to the Commissioner

Provided that the employer shall still remain liable

for any liability under subsection (4) of section 23 of the

Income Tax Management Act, 1994.

(7) (a) Where the income from part-time work

is income falling under paragraph (b) of subsection ( I )

of section 4 of this Act, the person paying the income

shall, at the time of payment, unless otherwise directed.

in accordance with subsection (3) of lhis section and in

accordance with the provisions of section 13 of the

Income Tax Management Act, 1994, deduct tax at the

rate of IS cents in the lira, and any tax so deducted shall

be remitted to the Commissioner accordingly.

(b) Where the income from part-time

work is income falling under paragraph (a) of subsection

(I) of section 4 of this Act, the individual shall pay to

the Commissioner an amount equivalent to IS cents for

every lira of the income from part-lime work in such

manner as may be prescribed in accordance with the

provisions of section 42 of the Jncome Tax Management

Act, 1994 where applicable.

(8) Where an individual who is to pay tax on part-

time work at the rale of IS cents in the lira as provided in

subsection ( I) of this section, fails to pay such tax on all his

income from part-time work subjcct to such tax by the end of

the year, aJllhe income from part-time work shall be added

with the rest of the individual's income and lax sball be

assessable thereon in accordance with the provisions of section

56 of this Act.

(9) In the case of a married couple the provisions

of this section shall apply to either or each of the spouses

where such spouse is receiving full-time instruction or is

serving an apprenticeship or has income in his or her own

right as described in subsection ( I) of this section and has

other income from part-lime work as therein described.

(10) Where an individual declares that income is

derived from pan-time work and the Commissioner has reason

to believe that such income was derived from an activily which

is nolan a part-time basis, or is the individual's normal activity

or is ancillary there to, the Commissioner shall consider such

income as n«qualifying 10 be subjecllo tax under subsection

(I) of Ihis seclion and shall assess it as if the foregoing

provisions of this section did not apply thereto, and any tax

remitted in respect of such income shall be available as a

credit against the individual's tax liability for therelevant year

of assess ment and where any tax so remitted is in excess of

such liability it shall be refunded.".

In paragraph (c) of seclion 92 of the principal Act, for the

words "fall to be allocated to the foreign income account." there shall

be substitu ted tbe words "fall to be allocated to the foreign income

account as provided in paragraph (b) of this section,".

The Income Tax Management Act, 1994 shall be amended as

(a) in section 19 thereof

(i) for paragraph (a) of subsection (4) there shall be

substiluted the following:-

"(a) in the case of a company resident in Malia, the

balance sheet and profit and loss account, which shall

comply in every respect with the applicable provisions

AcI No. xxv of

of sections 167, 168 and 169 of the Companies Act, 1995

and notwithstanding any exemption made by that Act or

by any other law, such balance sheet and profit and loss

account shall be accompanied by a repon made out by a

cenified public auditor as provided by the applicable

provisions of sections 179 and lSI of that Act;"; and

(ii) in the proviso to subsection (5), for the words ··or of

subsection (2) of section 161 of the Cornmen;:ial Partnenhips

Ordinance." there shall be s ubstituted the words " or of

subsection (2) of section 324 or the Companies Act, 1995.";

(b) in subsection (2) of section 33 therrof. for the words

"29th March. 1996. otherwise the notice given shall not be

considered as having been validly entered." there s hall be

substituted the words "28th June, 1996. otherw ise the notice given

will be rejected and the assessment objected to will become rtnal

and conclusive on such date.";

(c) for paragrapb (b) of subsection (3) of section 42 thereof.

there shall be substituted the following

"(b) every provisional taxpayer shall, not later than the

30th June of each year make a payment in respect of his tax

liability for the year of assessment commencing on the 1st

January of that year in an amount equivalent to the excess, if

any. of the aggregate of the tax chargeable in respect of his

income for the year immediately preceding that year of

assessment over the aggregate of the provisional tax. paid by

him in respect of that year, any double taxation relief to which

such person may be entitled in respect of the said year of

assessment and any tax deducted at source unde r the

provisions of sections 59 and 73 of the Income Tal( Act, from

such income

Provided that the provisions of this paragraph shal)

not apply to the income of any body of persons referred to in

the proviso to subsection (2) of this section for any year of

assessment preceding the year of assessment 1989.";

(d) immediately after paragraph (b) of subsection (3) of

section 42 thereof. there shall be added the following new

paragraph

"(c) For the purposes of this subsection "provisional

tupayer" means any person. including a company. who

derives any income or to whom any income accrues which is

not emoluments.";

(e) immediately after subsection (3) of section 42 thereof.

there shall be added the following new subsection

"(3A) <a) Payment of tax due by individuals in tenns

of paragraph (b) of subsection (7) of section 90A of the Income

Tu Act shall be made by not later than

(i) the 30th May of the re levant year in respect of

the income arising during the period January to April of

the same year;

(ii) the 30th September of the relevant year in

respect of the income arising during the period May to

August of the same year; and

the 15th February of the year following the

(iii)

relevant year in respect of the income arising during the

period Jan uary 10 December of the relevant year after

deducting the payments made in tcnns of subparagraphs

(i) and (ii) hereof. This payment shall be accompanied

by a statement of accounts indicating the taxable net

profits for the relevant year.

(b) For the purposes of paragraph (a) of this

subsection

"relevant year" means the year during which the

income from part-time work is earned; and

" taxable nel profit" is the result of all incomes and

expenses in accordance with established accounting

practices but duly adjusted for income tax purposes."

~d

(0 in paragraph (b) of subsection (4) of section 48 thereof

for the words " where the profits distributed as aforesaid derive

from a participating holding," there shall be substituted the words

"where profits distributed as aforesaid out of the foreign income

accou nt derive from a participati ng holding or from the disposal

of such holding,".

(I) The form prescribed by rule 2 o f the Spontaneous

Declaration (Fonn o f Application) Rules, 1995 shall continue to apply

for the purposes of tile spontaneous declaration referred to in subsection

(10) of section 9A of the princ ipal Act as if the words "15th December.

1995" were substituted for the words " 3 lst October, 1995" appearing

on the said fonn.

(2) Upon the coming into force of section 19 of this Act,

any person who elects to avail himself o f the provisions of section 90A

of th e principal Act as substituted by Ih is Act, shall nOllater than the

31st December 1996,remit to the Commissioner of Inland Reven ue 1M

on income de rived from part-time work and accru ing before the

promulgation o f this Act, at the rate of 15 cents for every lira.

Passed by the House of Representatives at Silting No. 565 of the 16th July,

1996. LAWRENCE GoNZl

Speaker

J OSANNE BONELLO

Acting Clerk to the House of Representatives