ACT No. XU of 1997 ATTNru.XU ta'I-1997 ATImalirug b'ligi mill-Parlament ta' Malta. (certifilcattao)

suppliment tal-Gazzetta tal-Gvern ta' Malta, Nru. 16,468, 10 ta' Gunju, 1997

.

TaqsimaA

MALTA

ACT No. XU of 1997

ATTNru.XU ta'I-1997

ATImalirug b'ligi mill-Parlament ta' Malta.

AN ACT enacted by the Parliament of

Malta.

ATT biex jipprovdi gliaIl-impoZizzjoni ta' AN ACT to make provision for the

taxxa tas-sisa fuq importazzjonijiet,

imposition of an excise tax OD"

prodotti u servizzi minflok is-sistema ta'

imports, products and services in

place of the value added tax system.

taxxa fuq iI-valur miijud.

ATT TA' L·1997

DWARIT·TAXXA TAD·DWANA UTAS·SISA

This Act may be cited as the Customs and Excise Tax Act, Short title .nd

1~97 and shall come into force on such date or dates as the Minister commencement.

responsible for finance may by notice in the Gazette appoint, and

different dates may be so appointed for different provisions or for

different purposes of this Act

Interpretation.

I. Re-imported goods

(a) Goods re-imported unaltered

(b) Samples temporarily exported

n. Goods of specified description or goods imported or used in

specified circumstances

(a) Any dutiable article imported by

the Government for the public service;

(i)

(ii) Malta Development Corporation;

(iii) Telernalta Corporation;

(iv) Enemalta Corporation;

(v) Public Transport Authority;

(vi)

pmployment and Training Corporation;

(vii)

Malta Maritime Authority;

(viii)

Water Services Corporation;

(ix)

Planning Authority;

(x)

Central Bank of Malta.

(b) Articles which are shown to the satisfaction of the

Comptroller of Customs to have been awarded abroad to any

person for distinction in art, literature, science or sport, or for

public service, or otherwise as a record of meritorious achievement

or conduct, and imported by or on behalf of that person.

(c) Articles imported by the University of Malta for the

equipment and maintenance of the University.

(d) Articles and materials imported by Malta Drydocks

for the equipping and the maintenance of the Dockyard, or which

are required in connection with the services rendered by that

corporation, other than articles and materials used in -

(i) goods produced by that corporation and intended

to be disposed of in Malta, or

(ii) locally registered ships which are themselves

subject to duty under the Customs Tariff.

(e) (i) Artificial limbs and other surgical appliances of a

similar nature, including spare parts and accessories for the

relief of permanent bodily disablement, provided that, in

case of spare parts and accessories, the Comptroller of

Customs is satisfied that they are imported for the purpose

of making locally artificial limbs or such other appliances,

and invalid chairs which the Comptroller of Customs is

satisfied are for the exclusive use of a person suffering from

some permanent physical defect or disability.

Goods which are specifically designed for the

(n)

education, employment or social advancement of a person

suffering from some permanent physical or mental disability

tb;

provided that the Comptroller of Customs is satisfied that

said goods are imported for the exclusive use of such person ..

(f) Bird rings imported for use by qualified bird ringers for

the study of the migratory habits of birds.

(g) Bona-fide gifts of a non-commercial nature received

occasionally by a person from another person residing abroad and

being intended for the personal use of the consignee and his family

provided the gift is neither alcohol beverage not tobacco or tobacco

products and the total CIF value of the gifts on every single occasion

does not exceed fifty Maltese Liri.

(h) Braille, and any other article for the use of the blind

imported through a recognised institute, if the Comptroller of

Customs is satisfied that such articles are imported for the exclusive

use of a blind person.

(i) Chalices, ciboriums, pyxes, monstrances, thuribles,

incense boats, crosses, candlesticks, crucifixes, holy statues (vari),

holy oil vessels, sanctuary lamps, Stations of the Cross, alter canis,

cruets, reliquaries, processional lanterns, tabernacles and doors of

tabernacles, exposition thrones and organs, intended for divine

worship in churches, chapels or other localities intended solely for

such worship; church canopies used in procession, church bells.

Q) Food and drink for the use of mendicant religious orders

and of private charitable institutions recognised as such by the

Minister.

(k) Gluten-paste, including all kinds of gluten flour, semola,

bread, biscuits and similar gluten products.

Hearing -aid apparatus designed for the use of the deaf

(I)

and identifiable parts thereof.

(m) Household and personal effects, furniture and other

domestic articles, (excluding firearms and weapons of all kinds),

which in the opinion of the Comptroller of Customs have been in

use within that household by the importing person of his family,

and are imported by such person on removing his household from

another country to Malta provided that such articles are imported

within six months from the date of arrival in Malta, of the person

importing them to take up residence in Malta, or within such period

which the Comptroller of Customs may allow.

(n) Musical instruments and sports equipment which are

mported by youth organisations provided that:-

the organisation concerned is not generally

(i)

limited to a particular place or area in Malta;

(ii) the organisation concerned is approved by the

Minister responsible for the purpose of this provision; and

(iii) The Comptroller of Customs is satisfied that the

articles imported are intended for the exclusive use of the

organisation concerned.

(0) One private motor vehicle imported by a person

(husband and wife counting as one person for the purposes hereof)

who transfers his residence to Malta subject to such person

satisfying the Comptroller of Customs that;-

he is in possession of a permit of residence

(i)

issued to him by the Government in terms of subsection (1)

of section 7 of the Immigration Act; and

(ii) the motor vehicle has been in his ownership for

a continuous period of at least six months immediately before

the issue of the said permit, provided that customs charges

andlor fiscal charges to which such vehicle is normally liable'

have been paid either in the country of origin or in the country

of departure and subject to the motor vehicle being imported

within six months of the date of the said permit or of such

person's arrival in Malta to take up residence, whichever date

is the later

Provided that, where any motor vehicle imported as aforesaid

free of duty is sold or disposed of by such person for use in Malta,

such motor vehicle shall be deemed to be taken out of bond at the

time of such sale or disposal and duty shall be payable thereon by

the person who becomes the owner thereof in accordance with the

provisions of section 11 of this Act.

(p) One private motor vehicle imported by a Maltese migrant

(husband and wife counting as one person for the purposes thereof)

who returns to reside in Malta, subject to such migrant satisfying

the Comptroller of Customs that:-

(i) he has been residing outside Malta for an aggregate

of ten years during the period of fifteen years immediately

preceding his arrival in Malta to take up residence; and

(ii) the motor vehicle has been in his ownership for a

continuos period of at least six months immediately before

his arrival in Malta to take up residence, provided that the

customs charges and/or fiscal charges to which such vehicle

is normally liable have been paid either in the country of origin

or in the country of departure and subject to the motor vehicle

being imported within six months of such migrant's arrival in

Malta to take up residence;

Provided that, where any motor vehicle imported as aforesaid

free of duty is sold or disposed of by such person for use in Malta,

such motor vehicle shall be deemed to be taken out of bond at the

time of such sale or disposal and duty shall be payable thereon by

the person who becomes the owner thereof in accordance with the

provisions of section 11 of this Act.

(q)

(i) Passenger's baggage including wearing apparel

and personal effects, used, which the Comptroller of Customs

is satisfied are'intended for the passenger's personal use, but

excluding firearms and weapons of all kinds;

Such tobacco products, wines, spirits, toilet

(ii)

water and perfumes, as may be allowed in accordance with

the Convention concerning Customs Facilities for touring

made at New York on the fourth June, 1954

(iii) Such goods bought for the passenger's own use

or as a bona fide gifts, other than the goods mentioned in

subparagraphs (i) and (ii) hereof up to a value of Lm50, so

however that where the total value of such goods exceeds

Lm50, this provision shall not apply and duty chargeable on

such goods shall be deducted by Lm5.

(r)

Samples of no commercial value.

(s) Scientific instruments or apparatus, intended

exclusively for educational purposes of pure scientific research,

provided-

(i) that such scientific instruments or apparatus are

consigned to a public or private scientific or educational

institution approved by the Minister responsible for

education for the purpose of this provision and are used under

the control and responsibility of such institution; and

(ii) that instruments or apparatus of equivalent

scientific value are not being manufactured in Malta.

(t)

Showcards.

(u) Sound and video recordings of an educational, scientific

or cultural character produced by the United Nations or any of its

specialised agencies.

(v) Sound and video recordings of an educational nature

imported by private schools, provided that the Director of

Education certifies that -

(i) the school concerned is licensed by the

Government of Malta; and

the materials are solely of an educational character

(ii)

and are to be used solely and entirely for educational

purposes by such school.

(w)

Sound and video recordings ofIanguage courses.

(x) Statues and artistic decorations cast abroad from

originals made by local artists, provided permission is obtained

from the Comptroller or Customs before the original is forwarded

abroad for casting.

(y) Articles of protective clothing provided that the

Comptroller of Customs is satisfied that they are intended for use

in a specified industry and that they are only used within the

precincts of this industry.

(z) Goods imported solely for agricultural or fishing Use

and when certified and approved as such by the Minister

responsible for agriculture or the Miuister responsible for fisheries ,

as the case may be.

Fifth Schedule

(Section 19 (e))

Provision of Food Subject to Excise Tax on Services

1. (1) The provision offood which is suitable for immediate

consumption, whether such food is consumed at the place where it is

provided or not, consisting of

meals or snacks;

(b)

ice-cream or products containing ice-cream except in

family packs. and ice lollies;

but excluding;

(i) the provision of food in a club exclusively provided

to members and their guests;

(ii) the provision of food by a canteen situated in a

work or study area exclusively provided to workers or students

therein.

(2)

For the purposes of paragraph (1) of this item-

(a)

"meals or snacks" means and includes

(i) hot and cold dishes including antipasto and dessert;

(ii) sandwiches, toast, potato chips, sausage rolls, pizza,

pastizzi, qassatat and similar snacks;

(iii) biSCuits, cakes, confectionery and similar items, but

excluding those sealed in a package by the manufacturer and

supplied in that original sealed package and those items which

individually weigh 500 gramrnes or more;

"family packs" means ice-creams of not less than 500

(b)

milJilitres in volume;

(c)

"members" means persons who are members of a club

and who have paid their sUbscription in advance for a period of not

less than one year and whose names appear on the club's books or

registers;

(d)

"guests" means persons who are accompanied by a

member while inside the club.

2. The provision of catering services including outside catering

but excluding the provision of catering services at a wedding reception.

Passed by the House of Representatives at Sitting No. 72 of

Tuesday, 27th May, 1997.

Myriam Spiteri Debono

Speaker

RICHARD I. eAUCm

Clerk to the House of Representatives.

In this Act, unless the context otherwise requires -

"body of persons" means any body or other association of

persons, whether corporate orunincorporate, and whether vested

with legal personality or not, including any fellowship or society;

"business activity" means any activity carried on as part of a

trade, profession, vocation or other business, other than the activity

of an employee acting as such, but including the exploitation of

any asset on a regular basis, and the provision by any entity of

facilities or advantages for payment to members of that entity;

"business sale" means a sale by a person as part of the business

activities of that person;

"certificate of exemption" in relation to ETP means a

certificate issued under section 16 of this Act;

"Director" means the Director of Customs and Excise Tax

appointed under section 3 of this Act;

"employee" means any individual bound to an employer by a

contract of employment or by other legal ties creating the

relationship of employer and employee as regards working

conditions, remuneration and the employee's liability and shall

also include the directors of a company;

"ETr' means the excise tax on imports levied under section

10 of this Act;

"ETP" means the excise tax on products levied under section

12 of this Act;

"ETS" means the excise tax on services levied under section

17 of this Act;

"excise goods" means goods subject to excise duty under the

Excise Duty Act, 1995;

"goods" means any tangible movable property;

"hotel" has the meaning assigned to it by the Hotels and

Catering Establishments Act;

"Malta" has the meaning assigned to it by the Constitution

and includes the continental shelf;

"Minister" means the Minister responsible for finance;

"person" includes a body of persons, a public authority, a

trust, and any entity capable of, or carrying on, a business activity;

"prescribed" means prescribed by regulation, order or notice

under this Act;

"price" includes any consideration;

"product" includes goods and intangible movable property;

"public authority" means the Government, a local council

set up in accordance with the Local Councils Act, 1993, an Act xv of 1993.

authority vested with distinct personality established by an Act

of Parliament or a corporation constituted by an Act of Parliament;

"records" includes machine readable information;

"registered person" means a person who has been registered

in accordance with section 24 of this Act and whose registration

has not been cancelled in accordance with section 25 of this Act;

"registration certificate" means a certificate required to be

issued by the Director in terms of section 24 of this Act;

"related service", in relation to the sale of a product to which

the service is related, means any of the following services for

which no separate agreement is made

(a) services of whatever nature ancillary or incidental

to the sale of any product to the person to whom the

product is sold;

(b) packaging, delivery, carriage, postage or insurance

of that product incurred or provided before the product is

delivered;

( c) adjustments, assembling, modifications, repairs, .

alterations or improvements made to that product or related

to the interaction of that product with another product as

part of, or associated with, the sale;

"resident in Malta", when applied to an individual, means

an individual who resides in Malta except for such temporary

absences as to the Director may seem reasonable and not

inconsistent with the claim of such individual to be resident in

Malta; when applied to a body of persons, means any body of

persons incorporated in Malta, or when the control and

management of the business of a body of persons incorporated

outside Malta are exercised in Malta;

"retailer" means a person whose business consists wholly or

mainly in the sale of products by retail;

"sale" includes the transfer of any goods or products under

any title;

"stocks" includes trading stocks and capital assets;

"supply" includes a sale;

"tax" includes additional tax;

"tax invoice" means an invoice required to be provided in

tenus of section 39 of this Act;

"tax period" has the meaning assigned to it by section 30 of

this Act;

"tax return" means the return required to be furnished in terms

of section 31 of this Act;

"taxable importation" has the meaning assigned to it by

section 10 of this Act;

"taxable product" has the meaning assigned to it by section

13 of this Act;

"taxable service" has the meaning assigned to it by section18

of this Act;

"taxable value", in respect of a taxable importation, taxable

product or taxable service, means the value thereof established in

accordance with the provisions of this Act;

"Tribunal" means the Excise Tax Tri.bunal established by

section 47 ofthis Act;

"tmstee" includes an executor or administrator.

PART II

ADMINISTRATION

(1) The administration oftbisActis vested in the Director Administration

of the Act.

of Customs and Excise Tax, who shall be a public officer appointed

as such by the Prime Minister.

Save as otherwise specifically provided for under any

(2)

other provision of this Act, the Director may delegate to any public

officer any of the rights, duties, powers and other functions vested in

him, conferred on bim or imposed upon him by tbis Act.

(1) Except as may be necessary for the purposes of tbis Official secrecy.

Act, or where the Prime Minister otherwise directs, every person

having any official duty or being employed in the administration of

this Act shall regard and deal with all records, returns, assessments or

other documents and information relating to this Act as secret and

confidential.

(2) No person appointed under or employed in carrying

out the provisions ofthisAct shall be required to produce in any court,

tribunal, board or committee of inquiry any document or to divulge

auy matter coming under bis notice in the performance of bis duties

under this Act except as may be necessary for the purpose of carrying

iuto effect the provisions of this Act, or for the purpose or in the course

of any appeal made in accordance with tbis Act or a prosecution for

auy offence against any of the provisions of tbis Act.

(3) Notwithstanding the other provisions of tbis section,

theDirector shall permit the Director of Audit or any officer authorised

by the Director of A\ldit to have access to any records or documents

as may be necessary for the performance of bis official duties and for

tbis purpose the Director of Audit and any such authorised officer

shall be deemed to be a person employed in the administration of tbis

Act.

(1) No obligation as to secrecy or other restriction upon Disclosure of

the disclosure of information imposed by section 4 of this Act or by

auy other enactment or otherwise shall prevent the Director or any

officer authorised by him in that behalf to furnish to the Commissioner

ofInIand Revenue and the Comptroller of Customs such information

obtained for revenue gathering purposes and which is required to be

disclosed by the Director or any officer as aforesaid to give effect to

auy ofthe provisions of this Act.

(2) Information obtained pursuant to subsection (1) of this

section shall not be disclosed except:-

to the officers mentioned in that subsection; or

(a)

(b) for the purposes of any proceedings connected with a

matter in relation to which those officers so authorised perfonu

their duties.

(1) Without prejudice to the provisons of this Act, the Director

shall carry out each year a separate professional audit including as

and right to demand

necessary a physical audit, of the rernms submitted by a sample of

registered persons chosen during the month of April of each year by a

scientific randomisation programme, ensuring that the sample is of a

reasonable size and is representative of all classes of registered persons.

(2) If for any purpose under this Act, the Director requires

any information or additional information or the submission of a return

from any person who has not made a rernm or a complete rernm, he

may, by registered letter or by personal service of a notice in writing,

demand from such person such information, additional information or

return as may be indicated in the notice.

(3) Such person shall deliver to the Director such

information, additional information orrernm within the period of time,

being not less than two working days, stipulated by the Director in such

notice.

(4) For the purposc of any proceedings taken under this Act,

the facts necessary to establish compliance on the part of the Director

with the provisions of subsection (2) of this section as well as default

under subsection (3) of this section shall in the absence of proof to the

contrary be sufficiently proved in any Court of law by the affidavit of

the Director or any other responsible officer of the Customs and Excise

Tax Department. Such affidavit shall have attached thereto as an exhibit

a copy or duplicate of the said letter or notice.

(5) Subject to the provisions of section 9 of this Act, the

Director may require and demand the production by any person or his

agent or officer of any letter, accounts, invoice, statement, book or other

document or record held by such person, agent, or officer and to request

the attendance of any such person at the office of the Director for the

purpose of confirming on oath the authenticity of the document ane of

determining the tax payable by such person and the same shall be

produced within the time, being not less than two working days frolll

the date of the receipt of the notice as may be deterinined in such

demand.

(I) The Director or any person authorised by him in Righ,ofaccessand

writing in that behalf shall, upon the production of his written authority inspedion.

and at all reasonable times, have the right to enter upon any land,

building or place for the purposes of inspecting any stocks, books,

records or documents, whether in the custody or under control of a

public officer or any other person whatsoever, if the Director or the

officer considers that such inspection will enable the ascertainment of

the tax payable under this Act by any person or the collection or

recovery of tax and may inspect any such stocks, books, records or

documents and may without fee or reward make extracts or copies of

any such books, records or documents.

(2) If access is required in virtue of subsection (1) of this

section to any premises occupied in whole or in part for the purpose of

habitation, such access shall require the prior warrant issued by a

Magistrate sitting in the Court of Magistrates in its civil jurisidiction

and shall not take place between seven o'clock in the evening and

seven o'clock in the morning.

(3) The Director or any person authorised by him may, for

the purpose of any inspection under this subsection, require the

production of any book, records or document by any person in whose

custody or control such book, records or document may be and may

require any such person to give reasonable assistance in the inspection

and to answer all questions relating thereto.

(1) The Director or any person authorised by him in Power!o take

writing upon the production of his written authority, if it appears samples.

necessary for the protection of the revenue against mistake or fraud,

may at any time take, from the possession of any person who supplies

goods or prOducts, such samples as the Director or the said person

may require so as to establish how the goods or products or the materials

of which the goods or products are made ought to be or to have been

treated' for the purposes of tax.

(2) Any sample taken under this section from the goods in a

person's possession shall be returned to him within a reasonable time

and in good condition.

(1) Without prejudice to the provisions relating to the duty Info~,,?onheldby

•

. . '

certain lIcensed

of professlOnal secrecy, no mformatJon shall be requested by persons.

the Director by virtue of this Act from any person to whom subsection

(2) of this section refers except solely for the purpose of determining

the tax payable by and the deductions allowable to such person under

this Act or of ensuring compliance by such person with the provisions

of this Act.

(2)

This subsection refers to

(a) a bank licensed under the Banking Act, 1994;

(b) an insurance company in respect of Hfe assurance

business which is carried on pursuant to a licence granted

under the Insurance Business Act;

(c) any person licensed to carry on investment business under

the Investment Services Act, 1994;

(d) a collective investment scheme licensed under the

Investment Services Act, 1994;

(e) a stockbroker licensed under the Malta Stock

Exchange Act.

PARTDI

EXCISE TAX ON IMPORTS

(1) Subject to the provisions of this Act, an excise tax on

goods imported into Malta shall be levied and collected in accordance

with the provisions of this Act at the rate of fJiteen percent on the taxable

value of the goods so imported and shall be payable to the Comptroller

of Customs on behalf of the Director before the goods are released for

use or consumption in Malta.

(2) For the purposes of subsection (1) of this section, the

taxable value of any imported goods shall be the value of the said goods

at the time when the tax on the said importation is payable in terms of

subsection (1) of this section. Such value shall be established in the

same manner provided in the Import Duties Act for the determination of

the value on which duty ad valorem is chargeable under that Act, and all

the relevant provisions of that Act shall apply mutatis mutandis; and for

the purposes of this subsection the references in the said provisions to

the Comptroller of Customs shall be construed as references to the

Comptroller of Customs acting on behalf of thc Director.

(3) Where the said goods are sold in Mal ta before the date

on which the tax on their importation becomes payable in terms of

subsection (1) of this section the taxable value thereof shall be the value

of the consideration paid or payable for the said transfer or the value

established in virtue of the other provisions of this Act, whichever is

the higher.

(4) No goods imported into Malta shall be released by the

Comptroller of Customs !ffiless -

(a) the excise tax on imports has been paid in accordance

with this Act; or

(b)

the importation thereof is an exempt importation; or

such release is authorised by the Director.

(c)

(5) An authorisation for the purpose of paragraph (c) of

subsection (4) ofthis section may be given under such conditions and

against the granting of such security as the Director may establish.

(1) Subject to the provisions of subsection (2) of this Exemprions on

section, the importation of goods to which the First Schedule to this Imports.

Act applies shall be exempt importations.

(2) The exemptions referred to in subsection (1) of this

section shall be subject to the provisions contained in the Schedule

referred to in that subsection and to such conditions which the Minister

may prescribe for the purpose of ensuring the correct and

straightforward application of the said exemptions and of preventing

any possible evasion, avoidance, abuse of tax or distortion of

competition.

(3)

Any exemption from import duties under the Import

Duties Act or under any other law, shall be deemed to be also an

exemption from the payment of excise tax under this Act on imported

goods and the provisions of the Import Duties Act or any other such

law relating to 'any such exemption shall also apply to the exemption

from tax granted under this subsection.

PART IV

EXCISE TAX ON PRODUCTS

(1) Subject to the provisions of this Act, an excise tax on [m~osition of

products shall be levied and collected by the Director on any business ~:c~~"::ts.

sale in Malta of a taxable product made to a retailer or to any other

person unless such other person -holds a valid certificate of exemption

applicable to that product or is a person to whom the sale is made by a

retailer.

(2) ETP shall be charged by the selIer at the rate of five per

cent of the taxable value of the product.

(3) Where any person, other than a retailer who has paid

ETP, makes a business sale of a taxable product direct to the general

public, ETP shali be charged on eighty-two per cent of the taxable value.

(4) In case of a business sale of a taxable product on which

ETP has already been pald by the seller, ETP shall be charged on the

taxable value of the product exclusive of the amount of ETP already

paid on the product.

(5) Any amount of tax excluded under subsection (4) of

this section shall be refundable by the Director if it is shown to his

satisfaction that ETP has been paid and subsection (4) of this section

has been complied with

Provided that the Director may determine the said amount by

such percentage or percentages of the taxable value of tlie product as

may be prescribed.

(6) ETP shall not be chargeable if the business sale is made

by a person whose total business sales have not, in the twelve months

ending with the last day of the immediately preceding taxable period,

exceeded twelve thousand liri or such higher amount as may be

prescribed

Provided that in respect of the first twelve months aftcr the

coming into force of this Act, this subsection shall apply in such manner

and under such conditions as the Director may deem appropriate.

Any product shall be deemed to be a taxable product for

the purposes of this Act unless such product falls within a category

of non-taxable products listed in the Second Schedule to this Act.

(1) The taxable value of a product, including any

related service, shall be the price of the product, and of

any related service, exclusive of the amount ofETP, and any other

deductable amount as may be prescribed.

(2) Where a product is an excise good, EIP shall be charged

on the total resulting from the addition of the value of the excise good

established in accordance with the provisions of the Excise Duty Act,

1995. the amount of excise duty payable thereon and the value of any

related service.

A business sale takes place in Malta if the product sold Place of business

is in Malta at the time when the sale takes place.

sales.

(1) A certificate of exemption from ETPmaybe issued Certific,at.of

· t or t 0 any regis

. t ere d person w h 0 sows

h

to t h

''''

exemption from ETP.

by th e D lree

e satislaction

of the Director that for the due and proper functioning of this Act, or

otherwise as may be prescribed. such person is not to be charged with

ETP on products sold to such person.

(2) The person to whom a certificate of exemption is issued

is to inform the Director forthwith of any material change in his

circumstances.

(3) The Director may in any case of change in the

circumstances of a person to whom a certificate is given, at any time

withdraw such exemption.

(4)

A certificate of exemption may be issued subject to

such limitations and conditions as may be prescribed or as may be

established by the Director in the absence of applicable regulations

and the certificate shall be valid only if the limitations and conditions

to Which it is subject are observed and complied with.

(5)

The Minister shall not later than the second week of

each month publish in the Gazette a list of the persons who were granted

an exemption in accordance with this section in the preceding month.

PART V

EXCISE TAX ON SERVICES

Subject to the provisions of this Act, an excise tax on Charge. to .,cis.tax

services shall be levied and collected by the Director on all taxable on """.ees.

services provided in Malta by a service provider at the rate of five per

cent of the total taxable value of the taxable services provided during

a tax period

Provided that where the total value of the services of a service

provider has not, in the twelve months ending with the last day of the

immediately preceding tax period, exceeded six thousand liri or sUch

other higher amount as may be prescribed, ETS shall not be chargeable

on such person in respect of that period;

Provided further that in respect of the fIrst twelve months

after the coming into force of this Act, the immediately preceding proviso

shall apply in such manner and under such conditions as the Director

may deem appropriate.

(1) A service is a taxable service if it is provided for a

consideration and it is not an exempt service.

(2) Services are provided for a consideration if the person

providing the services receives payment therefor in cash or in kind.

(1) For the purposes of this Act, the provision of a service

means the provision of any service and without prejudice to the

generality of the foregoing includes -

(a)

the provision of any kind of advice or assistance;

(b) the provision of any data. knowledge or information of

any kind or the provision of use or access to data, knowledge or

information;

(c)

the provision of human resources;

(d)

the provision of the use of any taxable product;

(e)

the provision of food listed in the Fifth Schedule to tbis

Act;

(f) the provision of a document entitling a person to a service;

(g)

such other provision as may be prescribed.

(2)

For the purpose of this section and of the Fifth

Schedule to this Act, food includes beverages.

Exempt services.

A service is an exempt service if it is -

( a)

a related service; or

(b)

a service listed in the Third Schedule to this Act.

(1) The taxable value of a taxable service shall be the Taxable value.

consideration paid for the provision of that service.

(2) To the extent that the consideration for the provision

of a service is not paid in money, the open market value of that

consideration shall be that as may be prescribed or as may be established

by the Director in the absence of applicable regulations.

(1) The provision of a service takes place in Malta if

Place of provision of

services.

(a) the service provider is resident in Malta at the time the

service is provided; or

(b) the service is physically performed in Malta by a person

who is present in Malta at the time the service is provided; or

(c)

the service is provided to a person who is resident in

Malta.

(2) Where the service is provided to a person who is resident

in Malta and the service provider is not resident in Malta and is not

registered for the purpose of this Act, the said person who is resident

in Malta shall be deemed to have himself provided those services in

the course or furtherance of his business activity and the provisions of

this Act, including the obligation to apply for registration and to account

for and to pay the tax, shall apply accordingly.

Where a fee or other consideration payable in respect of a Fees regulated oy law.

service is regulated by law and ETS is payable by the person providing

that service, it shall be lawful to increase such fee or consideration by

.

five per cent.

PART VI

REGISTRATION

(1) Subject to the provisions of this Act, every person Person.,canying

who carries on any other business activity in Malta and is not registered ~~~~':s~ be

becomes liable to be registered.

registered.

(2) Every person who on the thirtieth June, 1997, is

registered under the Value Added Tax Act, 1994 shall be registered by

the Director under this Act on the commencement thereof.

(3) Every person who, by virtue of subsection (I) of this

section, becomes liable to be registered after the eoming into force of

this Act shall apply to the Director on the prescribed registration form,

or on a form approved by the Director, within thirty one days of

becoming so liable.

(4) Any person who is not a registered person and who

intends to carry on a business activity may apply to be registered under

this Act.

(5)

Where any person:-

(a) applies to be registered pursuant to subsection (3) or (4)

of this section, and the Director is satisfied that that person is liable

to be registered under this Act, that person shall be a registered

person for the purposes of this Act with effect from such date as

the Director may detennine;

(b) has not made application for registration pursuant to

subsection (3) of this section, and the Director is satisfied that that

person is liable to be registered under this Act, that person shaH be

a registered person for the purposes of this Act with effect from

the date on which that person first became liable to be registered

under this Act

Provided that the Director may, having regard to the

circumstances of the case, determine that such person shall be a

registered person from such later date as the Director considers equitable.

(6) The Director shall allocate a registration number and

shall detennine. the first tax period for every person registered under

this Act and shall deliver to that person a registration certificate.

(7) An application for registration under this Act purporting

to be made by or on behalf of any person shall for all purposes be deemed

to have been made by that person or by that person's authority, as the

case may be, unless the contrary is proved.

(1) Subject to the provisions of this Act, every registered

person who carries on any business aciivity shall cease to be liable to

be registered if that person has ceased to carry on any business activity.

(2) Every person who, by virtue of subsection (l) of this

section, ceases to be liable to be registered may request the Director in

writing to cancel that registration, and if the Director is at any time

satisfied, whether upon such request or otherwise, that that person

does not carry on or has ceased to carry on a business activity, the

Director shall cancel that person's registration with effect from the

last day of the tax period during which such person ceased to be liable

to be registered, or from such other date as may be determined by the

Director, and shall notify that person of the date on which the

cancellation of registration takes effect.

(3) Every registered person who ceases to carry on all

business activities shall notify the Director of that fact within fifteen

days of the date of cessation and the Director shall cancel the

registration of any such person with effect from the last day of the tax

period during which all such business activities ceased, or such other

date as may be determined by the Director

Provided that the Director shall not cancel the registration of

any such registered person if there are reasonable grounds for believing

that the registered person will carry on any business activity at any

time within twelve months from that date of cessation,

(4) Any notification by a registered person pursuant to

subsection (3) of this section shall be made in writing to the Director

and shall state the date upon which that person ceased to carry on all

such business activities and whether or not that person intends to carry

on any such business activity within twelve months from that date,

(5) Any date determined by the Director for the

cancellation of registration under subsection (3) of this section may

be retrospective to a date not earlier than-

(a) the last day of the tax period during which all such

business activities carried on by that person ceased; or

(b)

the date on which the person was registered under this

Act, if the Director is satisfied that the person did not, from that

date, carry on any business activity,

Subject to the provisions of this Act, every registered person Re~Sle~ pe",o. 10

shall WI 'th' In th' Irty one d ays 0 fth e occurrence noti 'fy t h e D' rrector 10

,noury

cbange or.tatus,

Writing of-

(a) any changes in the name, address, constitution or nature

of the principal business activity or activities of that registered

person;

(b) any change of address from which, or of the name in

which, any business activity is carried on by that registered person

The obligations and liabilities under this Act of any

person in respect of anything done, or omitted to be done, by that

person while that person is a registered person shall not be affected bi

the fact that that person ceases to be a registered person.

PART VII

RETURNS AND PAYMENT OF TAX

Applicability of this

The provisions of this Parr of this Act shall apply only to

business activities consisting in the sale of products and the provision

of services.

(1) Subject to the other provisions in this section -

(a) the sale of a product shall be deemed to take place at the

time when the product is delivered or otherwise made available to

the person buying the product;

(b) the provision of a service shall be deemed to take place

on the date when the service is performed.

(2) Subjectto the provisions of subsection (3) of this section when

payment is received by the person carrying on a business activity before

the time determined in accordance with subsection (1) of this section,

the sale or provision aforesaid shall, to the extent of the payment so

made, be deemed to take place at such earlier time.

(3) When a tax invoice is issued before the time determined in

accordance with the provisions of subsection (1) of this section or before

the expiration of thirty-one days following the time determined as

aforesaid, the sale or provision aforesaid shall, in respect of the value of

that invoice, be deemed to take place at the time when the invoice is

issued.

(4) When services are performed over a period for a

consideration the whole or part of which is determined or payable

periodically or from time to time, they shall be treated as separately and

successively performed at the earlier of the following times

(a) to the extent that a payment for such provision of

services is received, the period covered by that payment;

(b) to the extent that a tax invoice is issued in respect of

such provision of services, the period covered by that invoice,

or as may be prescribed.

(1) Each registered person shall be placed by the Director Tax period.

in one of the following categories for the purposes of determining that

person's tax periods for the purposes of this Act

(a) category A, with tax periods of three months ending

on the last day of any month in any year as may be determined by

the Director;

(b) category B, with tax periods of twelve months ending

on the last day of any month in any year as may be determined by

the Director.

(2) Every registered person who is not placed in category

B pursuant to subsection (3) of this section, shall be placed by the

Director in category A.

(3) The Director may, whether on his own initiative or on

written application by a registered person, place that person in category

B if the total value of that person's business activities -

(a) has not in the twelve months ending with the last day of

the immediately preceding tax period, exceeded twelve thousand

liri in respect of the sale of products or six thousand liri in respect

of the provision of services or such other amounts as may, from

time to time, be prescribed; or

(b) is not likely to exceed those amounts in the period of

twelve months beginning on the fIrst day of any tax period; or

(c) such person is a retailer.

(4) For the purposes of subsection (3) of this section, the

total value of a registered person's business activities shall be deemed

not to have exceeded any amount specified in or under that subsection

where the total value exceeds any such amount solely as a consequence

of any cessation of, or any substantial and permanent reduction in the

size or scale of any business activity carried on by the registered person.

.

(5) The Director may from time to time direct that a

regIstered person change from category A to category B or, as the case

may be, from category B to category A-

(a)

on written application by the registered person; or

following the notification by the registered person under

(b)

section 26 of this Act of a change in status; or

(c) where the Director is otherwise satisfied, that the

registered person has ceased to satisfy the conditions of subsection

(3) ofthis section

Provided that a registered person may only make a written

application to the Director to change the category that determines the

registered person's tax periods after the expiry of twelve months from

the date on which the last written application was made.

(6) Where the Director directs that a registered person

changes from one category to the other, such person shall be deemed to

have been placed in the new category with effect from the day following

the end of the tax period during which the direction was made by the

Director.

(7) The first tax period for any registered person shall

commence on such dates as may be determined by the Director in

accordance with subsection (5) of section 24 of this Act.

(8) The last tax period for~a person whose registration has

been cancelled shall be the tax period during which the date of the said

cancellation falls and shall end on the said date.

(9) The Director may by means of a notice served on a

registered person in any particular case vary any tax period for that

period in such manner as may be' specified in that notice.

(1) Every registered person shall, on or before the fifteenth

day of the second month following the last day of every tax period of

that person, without notice or demand, furnish to the Director a tax

return, in such form as may be prescribed or as may be approved by the

Director.

(2) Any registered person who ceases to be registered shall,

not later than one month after so ceasing, furnish to the Director a fmal

tax return, in such form as may be approved by the Director, in respect

of that part of the last tax period during which that registered person

was registered.

(3) The Director may require any person, whether a

registered person or not, to furnish, whether on that person's own

behalf or as an agent or trustee, such further or other returns to the

Director in the prescribed form as and when the Director requires foi

the purposes of this Act.

(l) The Director may, by notice in writing, exempt Exemption from

f b

. (1) 0 f section

. . 31 0 f obligation

. .

any person fro m t h e provIsiOns

0 su section

furnish return.

this Act for such time and subject to such conditions and limitations

as may be specified in the said notice and may, by notice in writing,

vary or revoke any exemption so granted.

(2) Notwithstanding an exemption granted in terms of

subsection (1) of this section, a registered person shall furnish the

Director with a tax return in respect of any tax period during which he

carries on any business activity.

(1) Subject to the provisions of this Act, every registered Accounting basis.

person shall accountfor tax payable on an invoice basis.

(2) The Director may, on application in writing by a

registered person or on the Director's own initiative, direct that the

registered person account for the tax payable on a payment basis.

(3) Where the Director has, pursuant to subsection (2) of

this section, directed that a registered person shall account for tax

payable on a payment basis -

(a) if that registered person has ceased to satisfy the

conditions under which any such direction has been given,

and-

(i) that registered person has notified the Director

under section 26 of this Act of a change in status; or

(ii) the Director is otherwise satisfied that the

registered person has ceased to satisfy the conditions

aforesaid; or

if that registered person has made an application in

(b)

writing to the Director to account for tax payable on an invoice

basis-

the Director may direct that that registered person shall account for the

tax payable on an invoice basis.

(4) Where the Director gives a direction in respect of a

registered person's accounting basis under subsection (2) or subsection

(3) of this section, the registered person shall account for the tax payable

on the accounting basis directed by the Director with effect from-

(a) the commencement of the tax period immediately

following the tax period during which the direction is given by the

Director, in any case to which paragraph (b) of this subsection

does not apply; or

(b) the person's registration under this Act, where the

direction is given by the Director before the end of the first tax

period of the person that follows that registration.

(1) Where the Director directs a change in a registered

person's accounting basis in accordance with section 33 of this Act,

the registered person shall furnish to the Director in the prescribed

form, particulars to enable the calculation of tax payable in consequence

of the change in the basis of accounting.

The particulars required to be furnished under subsection

(2)

(1) of this section shall be furnished to the Director not later than the

last day for furnishing a return pursuant to subsection (1) of section 31

of the Act for the tax period preceding that in which the direction of the

Director takes effect.

'

(3) Where the Director directs a change in a registered

person's accounting basis under section 33 of this Act, the registered

person shall prepare -

(a) a list of his creditors in relation to that person's

business activity, showing the amounts due by him as at the

last day of the tax period preceding that in which the direction

takes effect; and

(b) a list of his debtors in relation to that person's

business activity, showing the amount due to him as at the

last day of the business activity in which the direction takes

effect.

Every registered

person whose accounting basis is Tax p'y'able where

ohanged pnrsuant to section 33 of this Act shall, not later than the ~~~g bas;,

last day allowed under subsection (2) of section 34 of this Act for takes place.

turnishing particulars in respect of the change, pay to the Director

the tax payable, if any, as determined pnrsuant to section 36 of this

Act.

(1) In respect of each tax period every registered person Calcularionoftax

shall calculate the amount of tax payable by him in accordance payable.

with the provisions of this Act.

(2) Subject to the following provisions, in calculating the

amount of tax payable in respect of each tax period, there shall be

deducted from the amount of tax so payable and attributable to the tax

period-

(a) any amount calculated in accordance with section 41

of this Act; and

(b) where a credit note has been issued in that tax period

pursuant to subsection (2) of section 40 of this Act and that

registered person is the supplier in relation to that credit note, the

amount of the tax credit.

For the pnrposes of subsection (2) of this section, the

(3)

amount of tax payable in relation to a business activity carried on by a

registered person attributable to a tax period is, -

(a) the total tax calculated on the tax value of all business

activities carried on or deemed to be carried on dnring that

period; and

(b) where a debit note has been issued in that period

pursuant to subsection (2) of section 40 of this Act· and that

registered person is the supplier in relation to that debit note,

the amount of the tax debit.

(4) If, in relation to any tax period, the.total amount that

may be deducted by a registered person under subsection (2) of this

section exceeds the amount of tax due by him to the Director and

attributable to that tax period, the amount of excess shall, subject to

the provisions of this Act, be refunded to that registered person by the

Director.

(1) Subject to the provisions of this Act, every registered

person shall for each tax period, and not later than the last day alloWed

under this Act for furnishing, a return for that tax period, pay to the

Director the tax payable for that period

Provided that, where a later due date has been fixed pursuant

to section 32 of this Act, the tax payable shall be paid to the Director on

or before that later date.

(2) Subject to the provisions of Part VIll and Part IX of this

Act, the amount shown as tax payable on any tax return furnished by a

registered person shall conclusively be deemed and taken to be COrrett

for the purposes of this Act.

(3) A return purporting to be made by or on behalf of any

person shall for all purposes be deemed to have been made by that

person or by that person's authority, as the case may be, unless the

contrary is proved.

(1) Where a registered person who furnishes a tax return

in respect of a tax period, is entitled to a refund in terms of the provisions

of this Act, such refund may be set off against the tax due for that period.

(2)

Any refund, or part thereof, due to a registered person

for a tax period which is not set off against the tax due for that same

period in accordance with the provisions of subsection (1) hereof, shall

be paid within the time-limit specified in section 57 of this Act.

(1) Every registered person, other than a retailer, who sells

any product or provides any service to another person shall provide to

that other person a tax invoice, or a receipt, containing such particulars

as may be prescribed within thirty-one days from the date referred to in

subsection (1) of section 29 of this Act.

(2) A registered person who is a retailer and who sells any

product to the general public shall provide the purchaser, at the time of

the sale, with a receipt containing such particulars and issued in such

form and mauner as may be prescribed

Provided that where a sale is made on credit, the receipt shall be

issued when the price is paid.

(3) A registered person who is a retailer and who sells a

product to any other registered person shall, at the request of that other

person, provide him with a tax invoice within thirty-one days from the

date on which the activity is deemed to have taken place in accordance

with the provisions of section 29 of this Act.

(4) Wherc a registered person provides a document to

himself which purports to be a tax invoice in respect of a business

activity carried on in his regard by another person, that document may,

with the approval of the Director, be treated as the tax invoice required

to be provided by the other person in terms of this section.

(l) This section shall apply where a registered person has Creditanddcl>it

issued a tax invoice in respect of a business activity and _

notes.

(a)

that activity has been cancelled; or

(b) the previously agreed consideration for the activity

has been altered whether due to an offer of discount, not being a

discount for prompt payment which is clearly stated on the face

of the tax invoice, or otherwise; or

(c) the products and services or part of the products

and services supplied have been returned to the person carrying

out the business activity.

(2) Where this section applies, the registered person

carrying on the business activity shall issue to the other person paying

for that business activity a credit note or, as the case may be, a debit

note containing such particulars as may be prescribed, to adjust the

amount shown on the tax invoice to the amount that would have been

so shown if-

(a) the cancellation or alteration referred to in paragraphs

(a) and (b) of subsection (1) of this section had taken place

before the tax invoice was issued;

(b) the goods and services returned had not been supplied

or provided, as the case may be.

(1) Where-

Bad debts.

(a) a registered person has carried on a business activity

for consideration in money; and

(b) that registered person has furnished a return in relatio

to the tax period during which the business activity was carrie

on and has properly accounted for tax on that business activity

under this Act; and

(c) the registered person has written off as a bad debt

the whole or P31t of the consideration not paid to him; and

(d) the registered person has taken all reasonable steps to

recover the bad debt; and

(e) the registered person satisfies the Director that there is

no reasonable or probable expectation that the bad debt will ever

be recovered;

then the Director may allow the registered person to make a deduction

under subsection (2) of section 36 of this Act of that portion of the

ru.nount of tax chargeable in relation to that business activity as the

amount written off as a bad debt bears to the total consideration for the

activity. The deduction shall be made from the tax due at the time it is

allowed and may be carried forward.

(2) Where any amount in respect of which a deduction has

been made in accordance with subsection (1) of this section is at any

time wholly or pru.tIy recovered by the registered person, that portion of

the ru.nount of the deduction allowable under subsection (1) of this section

as the ru.nount of the bad debt recovered bears to the bad debt written

off shall be deemed to be the tax charged in relation to a business activity

carried on during the tax period in which the bad debt is wholly or

pmly recovered.

PART VIII

ASSESSMENT OF TAX

(1) When;-

Ca) any person, whether registered or not, who is liable to

pay tax fails to furnish a tax return as required by this Act; or

(b) the Director is not satisfied with the return made by any

registered person;

the Director shall make an assessment of the ru.nount which. in bis

opinion, is the tax payable pursuant to this Act and that person shall,

subjectto the prQvisions of this Act, be liable to pay the tax so assessed.

(2) The Director may, at any time, make all such

adjustments in or additions to an assessment or an amended assessment

JIlll(Ie under this section as he thinks necessary to ensure the correctness

thereof, notwithstanding that tax or further tax may have been paid.

The Director shall cause notice of the assessment or

(3)

amended assessment to be sent to the person liable to pay the tax or

further tax and the amount so due shall be payable within thirty one

days from the service thereof.

Exceptin proceedings on appeal from an assessment under Assessment

section 46 of this Act, no assessment made by the Director shall be :~~~:"reCt

disputed in any proceedings on any ground; and except as aforesaid p::dings on

and subject to the provisions of section 45 of this Act, every such a •

assessment and all the particulars thereof shall conclusively be deemed

and taken to be correct and the liability of the person so assessed

shall be determined accordingly.

The production of any document by or on behalf of the Evidence ofrerums

Director purporting to be a copy or an extract of an original document and assessments.

shall in the Tribunal and in all other proceedings be sufficient

evidence of the original and the production of the original shall not

be'required.

(1) Where any registered person has made, or is to make, Limi .. tionoftime

a return 10 respect 0 f any tax peno

.

. d'

, It s hall not b e I aw ful"' ,or th e for

assessment

Director to issue an assessment after the expiration of six years from amendment of

the end of the tax period in respect of which the return was or should assessment.

have been furnished.

(2) Where an assessment is made by the Director under

paragraph (a) of subsection (1) of section 42 of this Act, it shall not be

lawful for him to reopen that assessment after the lapse of six years

from the date it was made.

PART IX

APPEALS

(1) Any person dissatisfied with a decision of the Director Appeals against an

consisting in an assessment of tax or relating to the registration of a assessment.

person under this Act or to the liability to BTl, may, either personally

or by his agent, lodge an appeal from such decision to the Tribunal

within thirty days of the date upon which the notice of assessment has

been served upon him or the date upon which he has been served by

the Director with a notice of the said decision or from the detennination

by the Comptroller of Customs, acting on behalf of the Director, of the

ETl due.

(2) The appeal under this section may be made on the ground

of any relevant point of fact or of law other than on the classification of

any goods under. the Cl)stoms Tariff set out in the First Schedule to the

Import Duties Act which shall be detennined in accordance with the

provisions of the said Act as if the question related to duty chargeable

under that Act

Provided that any appeal under this section shall be made in such

form and manner as may prescribed.

(3) Any of the parties to an appeal to the Tribunal who feels

aggrieved by a decision of that Tribunal on a point of law may appeal

against that decision to the Court of Appeal by means of an application

to be filed within thirty days from the date on which the decision appealed

from is notified to him.

(4) Where it results from a decision given on an appeal made

in accordance with this Act that any amount of tax paid by a person was

not due, the Director shall refund such amount to that person within

thirty days from the date such decision becomes res judicata.

(1)

There is hereby established a Tribunal to be

called the Excise Tax Tribunal for the purpose of hearing and determining

appeals made under section 46 of this Act.

(2) The Tribunal shall be composed of a Chairman and two

members who shall be appointed by the Minister for a period of tbree

years and may not be removed from office except in the circumstances

and manner in which a Judge may be removed

Provided that the Minister may appoint several Chairmen and

members to sit on the Tribunal, but only one Chairman and two members

shall sit on anyone case.

(3) The Chairman shall be a person qualified to be appointed

as a Magistrate and at least one of the other members shall be a certified

public accountant and auditor.

(4) There shall be a Registrar of the Tribunal who shall be

responsible to ensure the efficient functioning of the Tribunal.

(5)

The Registrar shall be appointed by the Minister.

(6) The Minister shall have the power to make rules of the

Tribunal generally for regulating the Tribunal's power and authority

as well as to regulate any matter relating to the practice and procedure

of the said Tribunal and the fees to be charged and the costs of

proceedings to be paid. On any matter in respect of which no rule has

been made under this subsection this Tribunal may establish its own

practice or procedure.

PART X

ADDITIONAL TAX AND ENFORCEM:ENT

(1) Any person who, being required to apply for registration ~dditional!aX and

under this Act, makes such an application after the expiration of the !ntereS!.

time laid down in section 24 of this Act, shall be liable to additional

tax in an amount equiValent to the higher of -

(a) two per cent of the tax due, if any, for the fIrst tax period

following registration; and

(b) twenty liri

for every month or part thereof that elapses from the date on which the

application should have been made in terms of the said section and the

earlier of the date on which the registration is furnished to the Director

and the date when that person is registered by the Director.

(2) Any person who, being required to furnish a tax return

for a tax period. furnishes that return after the expiration of the time

laid down in section 31 of this Act, shall be liable to additional tax in

an amount equivalent to the higher of -

(a) two per cent of the tax due, if any;

(b) twenty liri

for every month or part thereof that elapses from the date on which the

tax return should have been furnished in accordance with this Act and

the date When it is furnished to the Director.

(3) Where an assessment is made for a tax period in the

CIrCUmstances referred to in section 42 of this Act, additional tax shall

be due for that period in an amount equivalent to twenty per cent of

the under-declared tax.

(4) Where a tax return furnished to the Director by a

registered person for a tax period contains an understatement of the

tax due and that person makes a disclosure of such an understatement

before he is served with an assessment for that period, he shall be liable

to additional tax in an amount equivalent to ten per cent of the under

declared tax.

(5) Interest shall be due on any tax (but excluding additional

tax) which is not paid by the date on which it becomes payable in

accordance with this Act, at the rate of one per cent for each month or

part thereof during which the said tax remains unpaid or at such other

rate as may be prescribed.

Tax and additional tax due under this Act may be

(1)

recovered by the Director as a civil debt due to the Government.

(2) Subject to the provisions of subsection (3) of this section,

action for the payment of tax, additional tax and interest may be taken

by the Director at any time within six years from the date on which such

tax, additional tax and interest becomes payable.

(3) The running of the period referred to in subsection (2)

of this section shall be interrupted by any judicial act filed before the

expiration of such period by the Director demanding the payment of the

tax and additional tax due.

(1) Any notice issued by the Director showing any amount

of tax and additional tax due by a person shall, unless the contrary is

proved, be sufficient evidence that that amount is due to the Director by

that person and shall constitute an executive title within the meaning

and for the purposes of Tit1e VII of Part 10fBook Second of the Code

of Organization and Civil Procedure.

(2) The Director may request the payment of any tax,

additional tax and interest payable by any person under this Act by means

of a demand note and if the payment is not made within thirty days

from the date when the said demand note is served on that person, the

Director may proceed to enforce payment in virtue of the executive title

referred to in subsection (1) of this section after two days from the service

on that person of an intimation for payment made by means of a judicial

act.

(3) No opposition shall stay the issue or execution of any

executive act issued on the strength of an executive title mentioned in

this section or the sale by auction in pursuance thereof or the paying out .

of the proceeds of such sale and no opposition or reservation in the

schedule of deposit shall stay the paying of any sum deposited in Court

following any such executive act as aforesaid.

(1) For the purposes of ascertammg, collecting and Powers relating to

protecting on behalf of the Director the tax chargeable under this Act Imported goods,

on taxable importations, the Comptroller of Customs shall have t),le

same powers and shall follow the same procedures as are in, accordance

with any other law exercisable and followed by him for the purpose of

ascertaining, collecting and protecting import duties.

(2) Any provisions in the Customs Ordinance or in the cap, 37.

Import Duties Act or in any regulations made thereunder relating to

the application of the proceeds from a sale of imported goods towards

the payment of import duties due on those goods shall be construed as

providing for the application of the said proceeds towards the payment

of import duties and of any tax due under this Act on the importation

of those goods.

The Director shall have a special privilege over the Spe<ial privilege,

assets forming part of the taxable activity of a person in respect of any

tax due by that person under this Act and the said tax shall,

notwithstanding anything contained in any other law, be paid in

preference to a debt having any other privilege, excepting a debt having

a general privilege and a debt mentioned in paragraph (a) or in

paragraph (b) of section 2009 of the Civil Code.

cap, 16.

(1) If, in any particular case, the Director has reason to Security fortax

believe that tax collected by a registered person might not be due,

recoverable by the Director at the time when that tax becomes payable

to him in terms of this Act, he may by a notice served on that person,

demand the payment of the tax within such time as may be specified

in that notice and the tax shall thereupon become payable within that

time notwithstanding any other provision of this Act.

(2) When a payment has been demanded from a person in

accordance with subsection (1) of this section ihat person may, instead

of making the said payment, furnish such security for the tax payable

as may be acceptable to the Director.

If, in any particular case, the Director has reason to Shorter period for

,

h at t h e tax d

ue y b

'

d person cou Id ot h erwlse

'. b e <he

b e I levet

a reglstere

return,

prejudiced, he may, by means of a notice in writing, require that person

to furnish a tax return for a taxable period before the time allowed in

terms of section 31 of this Act, and in respect of that tax return any

reference in this Act to the time allowed in terms of the said section

shall thereupon be construed as a reference to the period specified in

the said notice.

(1) Where any interest is due by a person in terms oftrus

Act any payment made by that person to the Director shall

notwithstanding any declaration made by that person, be appropriated

to that interest before it is appropriated to any tax.

(2) Subject to the provisions of subsection (1) of this section,

where any additional tax is due by a person in terms of this Act, any

payment made by that person to the Director shall, notwithstanding

any declaration of that person to the contrary, be appropriated to Such

additional tax before it is appropriated to any other tax .

. PARTXI

REFUNDS AND RELIEF FROM TAX

(1) Subject to the provisions of this Act, in any case

where the Director is satisfied that the tax paid by a registered person is

in excess of the amount payable for any taxable period, he shall refund

the amount paid in excess

Provided that no refund shall be made under this subsection

after the expiration of the period of six years immediately after the end

of the taxable period, unless written application for the refund is made

by or on behalf of the registered person before the expiration of the said

period.

(2) When a registered person buys a product on which ETl

and ETP has been paid, and such a product would have been exempt

from ETl had it been imported by the said registered person for the

purposes set out in the First Schedule to this Act, other than an exemption

listed under item 26 of the First Schedule, such person shall be entitled

to a refund at the rate of sixteen per cent of the price of the product

purchased or such other perecntage as may be prescribed

Provided that in respect of hotels, the refund aforesaid shall

be at the rate of twelve per cent or such other percentage as may be

prescribed.

(1) Subject to the provisions of this Act, where the Director Refund

within a time-limit.

. equired to refund any amount to any registered person pursuant to

IS ~ of the provisions of this Act, the Director shall refund to that

angistered person the amount required to be refunded not later than

t~6 end of the fourth month following the date on which the return of

thar registered person was due to be made or was received by the

Director, whichever is later.

(2) Where any registered person has in respect of a tax period,

failed to pay to the Director, in whole or in part, any tax payable on

the due date, the Director may set off, against the said tax, any amount

or any part of any amount otherwise refundable to that registered person

under the provisions of this Act and where any tax as aforesaid is in

dispute, the Director may delay any refund due up to the amount of

the disputed tax.

(3) Where, in respect of a taxable period, any registered person

bas failed to submit a return for any taxable period as required by this

Act, the Director may withold payment of any amount refundable in

accordance with subsection (1) of this section, until the registered

person has complied with that requirement and paid the amount of tax

payable.

(4) Where, in relation to the return furnished or to be furnished

by any registered person, subsection (2) or subsection (3) applies, the

Director shail give notice in writing to the registered person accordingly

within the period specified in subsection (1) of this section.

(5) A refund due in accordance with any provision of this Act

shall be payable without any further appropriation other than this Act

by warrant under the hand of the Minister.

Where the Director is required by this Act to refund Interest on

any amount to a registered person and the Director docs not refund

that amount within the specified period, there shall, subject to the

provisions of section 55 of this Act, be paid by the Director to the

registered person interest at the rate of one percent for cach month or

part thereof for the period running from (he last day when thc refund

is due and ending on the date when the refund is paid by the Director,

on so much of the amount as is required to be refunded by the Director.

The Director may in his discretion mitigate or remit Relief from tax.

any additional tax, other than additional tax imposed under

sUbsection (1) of section 48 of this Act, which may be assessed or

imposed under this Act.

(I) If the Minister by order published in the Gazett

declares that arrangements have been made with the Government o~

any territory outside Malta with a view to affording relief from double

taxation in relation to tax payable under this Act and a similar tax paYable

under the laws of that territory, and that it is expedient that those

arrangements should have effect, those arrangements shall have effect

notwithstanding anything in this Act.

(2) If the Minister by order published in the Gazette declares

that arrangements have been made with the Government of any territory

outside Malta with a view to granting a refund, on a reciprocal basis, of

any tax paid under this Act to persons established outside Malta and

that it is expedient that those arrangements should have effect, those

arrangements shall have effect notwithstanding anything in this Act.

(3) The Minister may make regulations for the carrying

out of the provisions of any arrangements having effect under this

section.

(4) Where it results that any tax has been paid on the

importation of goods which are exempt from the tax so paid by virtue

of any enactment, the Director shall, upon a request made within such

time and in such manner as may be prescribed, and on the production.

of such evidence as he may deem necessary, refund the tax so paid.

PARTXIl

OFFENCES AND PENALTIES

Any person who

(a) fails to apply for registration at the time and in the manner

required by this Act; or

(b) fails to keep or to store records, documents and accounts

for the time and in the manner required by this Act or any

regulations made under this Act; or

(c) fails to furnish a tax return or any additional return,

statement or information or to produce any books, records,

documents and accounts when required to do so in virtue of this

Act or of any regulation made thereunder;

shall be guilty of an offence, and shall on conviction, be liable to a

fine (multa) of not less than one hundred liri and not exceeding three

hundred 1m, an? the Cour: shall order the offender to ~omply with the

laW within a time sufficIent for the purpose, but III any case not

eXceeding three months, and in default the offender shall be liable to

the payment of a further fme (multa) of not less than two liri and not

eXceeding ten liri for every day that the default continues after the

lapSe of the time fixed by the Court.

Irregularities in

Any person who

recorus, returns,

invoices and

(a) knowingly fails to account for any taxable activity trnnsa<:tions.

carried on by him in the records, documents and accounts required

by this Act and any regulations made thereunder; or

(b) gives any return, statement or information required for

any of the purposes of this Act which he knows to be incorrect or

misleading in any material respect; or

(c) falsifies any records, documents, or accounts required

to be kept under this Act or prepares or draws up or helps in tbe

preparation or drawing up, or makes use of, any false records,

documents or accounts; or

(d) with the intent of concealing any evidence which he

knows or is reasonably expected to know to be relevant for any

purpose of this Act, destroys, erases, damages or conceals any

stored information or any records, documents or accounts; or

(e) fails to provide or produce a tax or other invoice or

document or fiscal receipt as and when required by this Act, or

provides any such tax or other invoice or document or fiscal receipt

which he knows to be or is reasonably expected to know to be

incorrect or misleading in any material respect; or

(f) provides an invoice or other document or fiscal receipt

in respect of a taxable activity showing tax to be chargeable on

that taxable activity in a case where no tax is chargeable or where

the tax is less than that shown, or otherwise adds to or includes in

a price for a taxable activity any amount purporting to represent

tax which is not due or which is higher than the tax due; or

(g) having added to or included in a price for products

sold or services provided by him to another person any amount

purporting to represent tax chargeable under this Act, fails to

account for that amount in his records or to pay that amount to

the Director; or

(h) acquires possession of or deals in products, or accepts

the provision of any services having reason to believe that the tax

on the sale of the said goods or provision of services has been or

will be evaded; or

(i) enters into a taxable activity or offers to enter into a

taxable activity with another person in "respect of products or

services the acquisition or dealing with which or the acceptanceof

which would render that other person guilty of an offence in virtue

of paragraph (h) of this section;

shall be guilty of an offence and shall. on conviction, be liable to a fine

(mul/a) of not less than one huniired and fifty liri and not exceeding one

thousand liri and to a further fine (multa) equal to ten times the

endangered tax, or to imprisonment of not more than six months or to

both such fines and imprisonment.

(1) Where a person has been convicted of an offence

under either section 61 or section 62 of this Act and is again convicted

of an offence under either of the said sections committed within s~

months from the commission of the previous offence, the fine (multa)

shall in no case be less than three hundred liri.

(2) Where a person is convicted of four offences committed

under either of the sections aforesaid in a period of twenty-four months,

the Court shall order the suspension for a determinate time of not less

than one week and not more than one month of any licence, penni!,

warrant or other authorisation granted by the Police or any other authority

to trade or carry on the business to which the offence is related.

Any person who

(a) obstructs, hinders, impedes or does anything which is

calculated to obstruct, hinder or impede, or molests or assaults the

Director or any person duly engaged in the exercise of any power

or duty conferred or imposed on him by or under this Act; or

(b) being a person in charge of any premises which the

Director or an officer authorised by the Director is empowered to

enter in terms of this Act, fails to allow access to the said premises

to the Director or authorised officer or fails to take such measures

as may be reasonably required of him for the purpose of any such

access or of any inspection of those premises or of any goods,

assets, books, records or documents kept therein;

shallbe guilty of an offence and shall, on conviction, be liable to a

find (mu1ta) of not less than two hundred Iiri and not more than one

thousand liri or to imprisonment of not more than six months or to

both such fine and imprisonment.

Any person who contravenes or fails to comply with any of General Offence.

tbe provisions of this Act or of any regulations made thereunder, shall

be guilty of an offence and shall, on conviction, unless the offence is

subjeet to a greater punishment under any other provision of this Act

or any other law, be liable to afme (multa) of not less than one hundred

Jiri but not exceeding five hundred liri or to imprisonment for a term

not exceeding three months or to both such fine and imprisonment.

(1) Where anything is done or omitted to be done by a Offence, by orne"",

. .

f hi P art s hall app I y as 1 'f suc h Slld

of bodies of persons

body 0 f persons, th e provJSlons

0 t S

thing wcre done or omitted to be done by every director, manager or directo".

other officer of that body of persons: provided that a director, manager

or other officer of a body of persons shall not be guilty of an offence in

virtue of this subsection if he proves that he was unaware and could

not with reasonable diligence be aware of such an act or omission or

that he did everything within his power to prevent that act or omission.

(2) Where anything is done or omitted to be done by an

employee in the course of his employment, or by any other person

acting on behalf of the registered person, whether such other person is

an employee or not, the provisions of this Part shall apply as if such

thing was done or omitted to be done both by the said employee or

other person and by the employer or registered person; provided that

such an employer or registered person shall not be guilty of an offenCe

in virtue of this subsection ifhe proves that he was unaware and could

not with reasonable diligence be aware of such an act or omission or

that he did everything within his powers to prevent that act or omission.

(1) No proceedings under this Part shall be taken except Prosecution.

at the instance or with the sanction of the Director.

(2) Notwithstanding the provisions of the Criminal Code Cap. 9.

the Attorney General shall have a right of appeal to the Court of

Criminal Appeal from any judgement given by the Court of Magistrates

in respect of criminal proceedings under this Part.

(3) The institution of proceedings or the imposition of a

penalty for any offence under this Part shall not relieve any person from

prosecution under any otherlaw or from liability under this Act, and the

institution of proceedings or the imposition of a penalty for any offence

under any other law or the payment of any tax under this Act shall not

relieve any person from any prosecution or penalty under this Pan.

(4) Where a pecuniary punishment may be imposed in

respect of an offence under this Part such pecuniary punishment shall

always be imposed and the provisions of section 21 of the Criminal

Code and of the Probation of Offenders Act shall not apply.

(5) In any criminal proceedings under this Part or under any

regulations made under this Act, the Director personally or any other

officer designated by him may, notwithstanding the provisions of any

other law, produce the evidence, plead and otherwise conduct the

prosecution instead of or jointly with the police.

(6) Should the evidence of the Director or of the officer

designated under subsection (5) of this section be required as part of the

case for the prosecution, he shall be heard before assuming the duties of

prosecuting officer, unless the necessity of his giving evidence arises at

a later stage

Provided that the Director or other officer as aforesaid may state

the facts constituting the offence before giving evidence.

(1) Notwithstanding any other provisions of this Act,

the Director may, in the case of any offence under this Act, enter into an

agreement in writing with the offender whereby the said offender pays

a sum eqnivalent to the fine (multa) that may be imposed by way of

penalty in accordance with this Act on the conviction of that person for

the said offence, so however that where a minimum and a maximum

amount is provided for in respect of the fine (multa) that may be so

imposed, the sum payable pursuant to the said agreement shall be a sum

equivalent to the said minimum anlOunt increased by one half of the

difference between the said minimum and maximum amounts and upon

the signing of any such agreement by the Director. and the offender, all

criminal liability of the offender under this Act with regard to the offences

in relation to which the agreement has been entered shall be extinguished.

(2) The provisions of subsection (1) of this section shall

apply also in any case where the offender has been charged before a

court in relation to the offence but before final judgement has been

given in the case

Provided that where proceedings before a court have not been

co!llJllenced, the sum payable in accordance with any agreement as

contemplated in subsection (I) of this section shall be reduced by ten

percent.

(3) Any sum due in virtue of an agreement entered into in

terms of subsection (1) of this section shall be due to the Government

as a civil debt. The Director shall not enter into an agreement as is

referred to in subsection (1) of this section unless such agreement is

accompanied by the payment of the sum due or a sufficient security

for its pay.ment.

(4) The provisions oftrus section shall be without prejudice

to any proceedings or forfeiture instituted or having effect in virtue of

any other law.

The proVJSlons of sections 18 and 62 of the Offences relating to

(1)

taxable importations.

Customs Ordinance shall apply to this Act as if all references to

duties contained in those sections were references to tax due under

this Act, and any person who is in contravention of the provisions of

the said sections construed as aforesaid in relation to any goods whose

importation is subject to tax under this Act shall, without prejudice to

any liability incurred under the said Ordinance, be guilty of an offence

under this Act and shall for each such offence be liable to a fine

(rnulta) equivalent to the aggregate of tax payable on the goods and

double the value of the goods, or to a fine (rnulta) of twenty-five Iiri,

whichever shall be the greater, or to imprisonment for a term not

exceeding two years or to both such fine and imprisonment and the

offender may be either detained or proceeded against by summons, in

the same manner and form, and subject to all other provisions laid

down in the Criminal Code.

(2) The provisions of section 77 of the Customs Ordinance

shall apply in relation to goods whose importation is subject to tax

under this Act as if uny reference contained therein to the duty therein

mentioned were also a reference to the tax chargeable under this Act.

The importation of goods subject to tax under this Act

(3)

shall, for all purposes of any law, be deemed as a prohibited importation

unless the said tax is duly paid, or, where the payment of the tax has

been postponed in accordance with any provisions of this Act, the

conditions imposed in connection with such a postponement are duly

Observed.

PART XIII

MISCELLANEOUS

(1) Every registered person shall keep proper and sufficien

Keepingofrecor<is.

records of all transactions of his business activities to enable the dale

the value and the nature of such transactions, the tax, if any, chargeabl~

thereon and· the deductions allowable in respect thereof, and any. such

other infOimation as may be prescribed, to be readily ascertained.

(2) The records referred to in subsection (1) of this section shall

be kept and stored in such manner, contain such details and be supported

by such documents and accounts as may be prescribed and shall be

retained for.a period of at least three years from the end of the calendar

year to which they relate.

7:1. For the purposes of subsection (6) of section 12 and the proviso

to section 17 of ·this Act, the Director may treat as one person two or

more persons carrying on a business activity if he is satisfied that the

separation of such business activities has for its main purpose the

of

avoidance tax.

Ghall-ghanijiet tas-subartikolu (6) ta' l-artikolu 12 u I-proviso ~ispozizzjo~ibiex

Ii hernrn rna' l-artikoIu 17 ta' dan I-Att, id-Direttur jista' jqis bhala ~~=~ rna nglX

persuna wanda iii Zewg persuni jew iktar Ii jkunu qeghdin iwettqu attiviili

tan-negozju jekk ikun sodisfatt Ii I-firda ta' dawk I-attivitajiet tan-negozju

ikollhorn bhala ghan ewIieni taghhorn Ii tigi evitata t-taxxa.

(1)

Any notice, warrant or other proceeding purporting to

be made in accordance with the provisions of this Act shall not be

deemed to 'be void or voidable for' want of form or be affected by the

reason of a mistake, defect or omission therein, if the same is in substance

and effect in conformity with or according to the intent and meaning of

this Act.

(2) In the case of a body of persons it shall be sufficient if

any

only the name of the body of persons appears on

notice, warrant or

proceeding, including any proceeding in the Court of Appeal, issued or

made under or for purposes of this Act.

(3) Every notice to be given by the Director under this Act

shall be signed by the Director or by some person or persons allthorised

by the Director and every such notice shall be valid if the signature is

printed, stamped or written thereon.

(4) Any notice may be served on a person either personally

or by being sent by post and shall in the latter case be deemed to have

in

been served, unless the contrary is proved, the case of an address in

Malta not later than the third day following the day when it was posted,

and in the case of an address outside Malta the day suc..ceeding that on

wllich the notice would have been received in the ordinary course by

post and it shall be sufficient to prove that the notice was properly

addressed and posted.

-"---_ .. _._-_._------._-"-

.. -

.

(5) For the purposes of subsection (4) of this section a

otice shall be deemed to have been properly addressed if it has been

aadressed to a person's business or private address, and an address

1!TIIished by a person to the Director shall be deemed to be an address

of that person unless and until a notice of a change of address is given

by that person to the Director.

(6) When the date on which any return, notice or

other document is to be furnished, delivered or served or deemed to be

served or on which a payment is to be made interms of any provision

of this Act falls,were it not forthe'provisions of this subsection, on a Cap. 252.

Satnrday or a Sunday, or on a national. day or a public holiday as

established in the National Day and Other Public Holidays Act, that

date shall be deemed to fallon the first working day, other than a

Satnrday, following the said Saturday, Sunday, national day or public

holiday.

(1) Any secretary, manager, director, liquidator or other Reprosentatives.

pr1ncipal officer of an entity or of a body of persons, any heir and any

testamentary executor and any. curator of a vacant inheritance of a

deceased person, and any person who is a tutor, curator, administrator

or trustee of any other person or of any trust, fund or other entity shall,

for the purposes of this Act,be a representative of that body of persons,

deceased person, other person, trust, fund or other entity, as the case

maybe.

(2) Where a taxable activity is carried on in Malta by a

person who is not established in Malta, any person resident in Malta

to whom the said activity is directed or any person resident in Malta

who is an agent of the said person shall, jf so designated by the Director

by means of a notice in writing, be a representative of the said person

in respect of any obligation of the person underJhis Act relating to

that taxable activity.

(3) (a) Subject to the provisions of subsection (5) of this

section a representative of a person shall be liable in the same

mauner and to the same extent as the person of whom he is

representative for all the obligations imposed by or under this

Act.

(b) Anything done or omitted to be done by a

representative acting as such shall for the purposes of this Act be

deemed to have been done or omitted to be done by the person of

whom he is a representative.

(c) . Any notiCe served on or any refund paid to a

representative in his capacity as such under any of the provisions

of this Act shall be deemed. to have been served upon or to have

been made to the person of whom he is a representative.

(d) The existence of or the designation of a person as a

representative of another person shall not relieve the latter person

from any obligation or liability under this Act.

. (4) A representative who has under his management or

control any funds or property belonging to or due to the person of whom

he is a representative shall not dispose of such funds or property unless

he has made adequate provision for any tax due under this Act.

(5) A representative shall be jointly and severally liable with

the person of whom he is a representative for the tax due by that

person

Provided that where the representative has acted in good faith

and is not knowingly in breach of subsection (4) of this section or of

any other obligation under this Act, his liability under this subsection

shall be limited to the funds or to the value of any property under his

inanagement or control which belongs or is due to the person of whom

he is a representative.

For the purposes of the Income Tax Act and the Income

Tax Management Act, 1994-

(a) interest paid or payable under this Act by the Director

to any person shall not be treated as income of that person;

(b) interest and additional tax paid or payable under this

Act by any person to the Director shall not be treated as expenses

incurred in the production of the income of that person.

(1)

The Minister may by regulations -

(a)

amend, cancel or substitute any of the Schedules to

this Act;

(b) prescribe any matter which may in any particular case

be deemed necessary for the purpose of avoiding significant

distortions in competition which might otherwise result from the

application of any of the provisions of this Act;

'(c) make provision for the rounding up or down of any

amount in any computation made for any of the purposes of this

Act, or for disregarding any small amounts in any such

computation; ,

(d) prescribe any conditions and determination that may,

in accordance with this Act, be imposed or made by the Director;

(e) prescribe any other matter for securing the payment

of the tax and generally for giving effect to the provisions of this

Act;

(f) make provisions for the registration of a number of

persons as one person or for a person to be registered separately

in respect of different branches or departments of his business

activity in such circumstances and in respect of such provisions

as may be specified in the said regulations;

(g) prescribe any matter that mayor is to be prescribed

under any of the provisions of this Act

Provided that any such matter as aforesaid may, in the

discretion of the Minister, be prescribed by Order or Notice in

the Gazette

(2) Without prejudice to the provisions of subsection (1)

of this section the Minister may by regulations also make special

provisions with respect to activities to which SUbseCtion (3) of this

section refers, and may, by such regulations, make provision

(a) for a taxable activity to be treated as two or more

separate taxable activities or for a number of taxable activities to

be treated as a single taxable activity;

(b) for determining the time and place at which taxable

activities shall be treated to take place;

(c) for tl).e calculation oftax payable to be determined by

such method or one of such methods as may be established by

the Director;

(d) for the determination of the deductions and refunds

applicable;

(e) for additional records and documents that must be kept

and produced in respect of the said business activities;

(f) requiring the TIleans and the machines whereby registered

persons are to store, process and produce documents and other

infonnation.

(3) The Minister may by Notice in the Gazette exempt any

person or class of persons with or without retrospective effect from all

or any of the provisions of this Act or make different provisions on any

ground which to him may seem sufficient. Any such exemption or

different provision may be made subject to such conditions or the

payment. of such other rate or rates of tax, not being a rate or rates

higher than those stipulated by this Act, or to both such conditions and

payment, as the Minister may deem appropriate.

.

PART XIV

REPEALS AND AMENDMENTS

Repeal of the Value

(1) Subject to the provisions of this Act, the Value Added

Tax, 1994, is hereby repealed with effect from the first July, 1997.

(2) The provisions of the Value Added Tax Act, 1994, and

of the Expenditure Levy Act shall continue to have effect and shall

continue to appiy fully with respect" to the ·provislon of any goods and

services taking place before the first July, 1997.

The Import Duties Act shall be amended as follows

(1)

(a) the rates of duty appearing in the First Schedule thereto

in respect of goods which are liable to excise tax under this Act

upon their importation into Malta, shall be altered as may be

necessary so that the amount of import duty payable under the

Import Duties Act shall be not less than 8.1 per cent;

thereof shall be substituted by the

(b) the Second

Schedule

.

.

.

Schedule appearing in the Fourth Schedule to this Act.

(2) On the coming into force of this Act, the Comptroller

shall, in accordance with section 27 of the Import Duties Act, make a

reprint of the First Schedule of the said Import Duties Act, showing the

8!Ilendments affected in virtue of paragraph Ca) of subsection (1) of

this section.

PART XV

TRANSITORY PROVISIONS

(1) The last tax period of any registered person for the Trnn~i~ory

purposes of the Value Added Tax Act, 1994, shall end on the thirtieth provISIOns.

June, 1997.

(2) Nothwithstanding th.e provisions of subsection (1)

hereof, the said return to be furnished in terms of the said Act, shall be

furnished by not later than the fifteenth day of the second month

following the month during which the tax period ofa registered person

would have, but for the provisions of subsection (1) hereof, ended in

terms of the Value Added Tax Act, 1994.

(3) Any input tax determined in accordance with the !<efund of

this

section shall be refunded to the Director by the thirty ~~:~

provisions of

fIrst December 1997, in such manner and subject to such conditions as

may be prescribed.

(4) A person who is a registered person for the purposes

ofllie Value Added Tax Act, 1994 shall account for the input tax referred

to in subsection (3) of this section and refundable to the Director, by

calculating the said tax in accordance with either of the following two

formulae and the fIling on such date as may be prescribed of a statement

in a form supplied by the Director

(a) Such person shall prepare a statement listing the goods

held as trading stock by that registered person as on the thirtieth

June, 1997, showing the input tax claimed by the said person in

relation to those goods

Provided that for the purposes of this sub-section,. goods

held as trading stock by a person

(i) shall include trading stock belonging to the person

and held on consignment by another person;

(ii) subject to the provisions· of paragraph (iii) of this

paragraph shall riot include trading stock held .on

consignment by the person and belonging to another perscin;

(ill) shall include goods held on consignment by the

person if they form part of the trading stock belonging to

another person who does not have a place of business in Malta

and if the goods are subject to Value Added Taxon which the

person claimed a credit for input tax; or

(b) Such person shall compute the following

x x A = Input tax refundable

y

Where-

X is the total input tax claimed by the said person in terms of

the Value Added Tax Act, 1994, for all the tax periods commencing

from his first tax period and ending with the last tax period of that

person;

Y is the number of weeks in the period that -

(i) commences on the day when the Commissioner

registered the person in terms oUhe provisions of the Value

Added Tax Act, 1994; and

(ii) ends on the thirtieth June, 1997;

A is either of the following two numbers

2 in the case where the pcrson quaiifies to be considered an

industrial undertaking; or

lOin any other casc

Provided that for the purposes of this sectio!! "industrial

undertaking" means an undertaking carrying on or which, in the opinion

of the Director, intended to carry on, a trade which consists in the

production, manufacture or improvement of any product and includes

an undertaking relating to a hotel;

(5) Every person must submit a statement together with the

workings of the option chosen in accordance with the provisions of

subsection (4) thereof, which statement must be signed, on each sheet

thereof, by the said person, or in the case of a body of persons, ~y a

principal officer of that body of persons and by the person responsIble

for the book keeping functions of the business of the person

Provided that where a person has chosento take the .option

referred to in paragraph (a) of subsection (4) of this section and the

total input tax refundable to the Director is more than five·thousand

liri, the said statement shail be certified by a certified public accountant

and auditor.

(6) Any input tax refundable in acc()rdance with the

provisions of subsection (4) of this section shall be set off against any

excess tax credit owed to the person in virtue of the provisions of the

Value Added Tax Act, 1994.

(7) Notwithstanding the other provisions of this section,

where it results to the Directer at any time that the input tax to be

refunded to the Directer has not been properly computed or that it was

computed en the basis of incorrect infonnation, the Director may revise

the ameunt within a time limit as may be prescribed

Provided that where a person does not account for the input

tax due to the Director in accordance with subsection (4) ofthis section,

the Director shall make an assessment of the amount which, in his

opinion, is the input tax refundable te the Govemment, and that person

shall, in accordance with the provisions .of this Act,. he liable to pay

the tax 5.0 assessed.

(8) Any person signing or certifying the statement which

results to be invalid in terms of this section shall be jointly and severally

liable for the amount of tax due to the Director.

(9) Where any false or incorrect statement constitutes an

offence under this Act or' any other law, the liability to tax in tenns of

this section shall be without prejudice to any liability for any penalty

which may be imposed for the said offence.

(10) Where on .or after the first July, 1997, a payment is Continuous serVices.

received or a tax invoice is issued for services to which subsection (4)

of section 29 of this Act refers, and that payment or tax invoice refers

to a period (in this section referred te as "the period of the business

activity") which commences hefore the first July, 1997. and ends on

or after that date, the business activity that is to be treated as a separate

business activity by reference to that payment or tax invoice in

accordance with the said subsection shall be deemed.to. be a business

activity for a peried commencing en the said date and the taxable

value of the said business activity shall, save as the Directer may

otherwise allow, be a proportion of the taxable value that would

otherwise stand to be determined in accerdance with the other

provisions of this Act which corresponds te the preportion which the

period commencing on the said date and ending on the last day of the

period of the business activity bears to the period of the business activity

(11) Where any goods are imported into Malta before the

first July, 1997, and the time at which import duty is to be computed in

terms of the Import Duties Act or, where no such import duty is payable

the time at which it would be so computed had it been payable, falls o~

or after the said date, the said importation shall be deemed to have

taken place on the said date.

(12) Where, in the execution of a contract made before the

date on which this Act comes into force, any products or services are

sold or provided on or after the frrst July, 1997, and the sale or provision

of the said products or services is a business activity, that contract shall,

for all the purposes of any law, be interpreted as if the person to whom

that sale or provision is made had bound himself to pay, in addition to

the consideration stipulated in or in accordance with the said contract,

an amount equivalent to the tax chargeable on this sale or provision

under this Act in lieu of the tax chargeable under the Value Added Tax

Act, 1994

Provided that this subsection shall not apply where it results

from the contract and from all the relevant circumstances that the

consideration determined in accordance with that contract had already

made provision for the tax chargeable under this Act

(13) Where the transitional arrangements for the application

of this Act are not specified in the provisions of this section, they shall

be such as may be prescribed.

(14) The Commissioner of Value Added Tax shaH furnish all

data and information to the Director as may be necessary for giving

full effect to the provisions of this Act and for the due administration

thereof.

(15) For the purposes of subsection (8) of this section, a

statement is invalid where it results that the information has been grossly

misreported.

SCHEDULES

First Schedule

Section 11)

EXEMPT IMPORTATIONS

1. The re-importation of-

(a) goods which are re-imported unaltered;

(b) samples which had been temporarily exported.

2. The importation of articles which are shown to the

satisfaction of the Comptroller of Customs to have been awarded

abroad to any person for distinction in art, literature, science or sport.

or for public service, or otherwise as a record of meritorious

acll1evement or conduct, and imported by or on behalf of that person.

3. The importation of articles and materials by Malta Drydocks

for the equipping and the maintenance of the Dockyard, or which are

requu:ed in connection with the services rendered by that corporation,

other than articles and materials used in -

Ca) goods produced by that corporation and intended to

be disposed of in Malta, or

(b) locally registered ships other than ships used in

intemational transport.

4. (1) The importation of artificial limbs and other surgical

appliances of a similar nature. including spare parts and accessories

for the relief of permanent bodily disablement, provided that, in the

case of spare parts and accessories, the Comptroller of Customs is

satisfied that they are imported for the purpose of making locally

artIficial limbs or such other appliances, and invalid chairs which the

Comptroller of Customs is satisfied are for the exclusive use of a

person suffering from some permanent physical defect or disability.

(2) The importation of goods which are specifically

designed for the education, employment or social advancement of a

person suffering from some permanent physical or mental disability.

provided that the Comptroller of Customs is satisfied that the said

goods are imported for the exclusive use of such person.

5. The importation of bird rings for use by qualified bird ringers

for the study of the migratory habits of birds.

6. The importation of bona fide gifts of a non-commercial nature

received occasionally by a person from another person residing abroad

and being intended for the personal use of the consignee and his family

provided the gift is neither alcohol nor alcoholic beverage nor tabac~

or tobacco products and the total CIF value of the gifts on every single

occasion does not exceed fifty liri.

7. The importation of braille and any other article for the Use of

the blind imported through a recognised institute, if the Comptroller of

Customs is satisfied that such articles are imported for the exclusive

use of a blind person.

8. The importation of chalices, ciboriums, pyxes, monstrances,

thuribles, incense boats, crosses, candlesticks, crucifixes, holy statues

(vari), holy oil vessels, sanctuary lamps, Stations of the Cross, altar

cards, cruets, reliquaries, processionallantems, tabemaclesand doors

of tabernacles, exposition thrones and organs, intended for divine

worship and imported to be used exclusively in connection with SUch

divine worship in churches, chapels or other localities intended solely

for such worship, and of church canopies used in procession and church

bells.

9. The importation of hearing-aid apparatus designed for the use

of the deaf ~d identifiable parts thereof.

10. The importation of household and personal effects, furniture

and other domestic articles (excluding firearms and weapons of all kinds)

which in the opinion of the Comptroller of Customs have been in use

within that household by the importing person or his family, and which

are imported by such person on removing his household from another

country to Malta provided that such articles are imported within six

months from the date of arrival in Malta of the person importing them

to take up residence in Malta, or within such other period which the

Comptroller of Customs may allow.

11. The importation of one private motor vehicle imported by a

Maltese migrant (husband and wife counting as one person for the

purposes hereof) who return to reside in Malta, subject to such migrant

satisfying the Comptroller of Customs that

(i) he has been residing outside Malta for an aggregate of

ten years during the period of fifteen years immediately preceding

his arrival to take up residence in Malta; and

(ii) the motor vehicle has been in his ownership f.or a

continuous period of at least six months immediately before his

arrival to take up residence in Malta, provided that customs

charges andlor fiscal charges to which such vehicle is normally

liable have been paid either in the country of origin or in the

country of departure and subject to the motor vehicle being

imported within six months of such migrant's arrival to take up

residence in Malta

Provided that, where any such motor vehicle which is

imported tax free and it is sold or disposed of by such person for use in

Malta, such motor vehicle shall be deemed to be taken out of bond at

the time of such sale or disposal and excise tax on imports and products

shall be payable thereon by the person who becomes the owner thereof.

12. The importation of one private motor vehicle imported by

a person (husband and wife counting as one person for the purposes

hereof) who transfers his residence to Malta, subject to such person

satisfying the Comptroller of Customs that

(i) he is in possession of a permit of residence issued to

him by the Government in terms of s!lbsection (1) of section 7 CAp.2l7.

of the Immigration Act; and

(ii) the motor vehicle has been in his ownership for a

continuous period of at least six months immediately before the

issue of the said permit; provided that customs charges andlor

fiscal charges to which such vehicle is normally liable have been

paid either in the country of origin or in the country of departure

and subject to the motor vehicle being imported within six months

of the date of the said permit or of such person's arrival in Malta

to take up residence, whichever date is the later

PrQvided that, where any such motor vehicle is imported as

tax free and it is sold or disposed of by such person for use in Malta,

such motor vehicle shall be deemed to betaken out of bond at the time

of such sale or disposal and excise tax on .imports and products shall

be payable thereon by the person who beComes the owner thereof.

13. The importation of -

(a) passengers' baggage, including wearing apparel and

personal effects, used, which the Comptroller of Customs is

satisfied are intended for the passengers' personal use, but

excluding firearms and weapons of all kinds;

(b) such tobacco products, wines, spirits, toilet waters and

perfumes as may be allowed in accordance with the Convention

concerning Customs Facilities for Touring made at New Yorlc on

the 4th June, 1954;

(c) such goods bought for the passenger's own Use or as

bona fide gifts, other than the goods mentioned in subparagraphs

(i) and (ii) hereof up to a value of LMSO, so however that where

the total value of such goods exceeds LM50; this provision shall

not apply and the tax chargeable on such goods shall be deducted

byLM7.S0.

14. The importation of samples of no commercial value.

15. The importation of scientific instmments or apparatus,

intended exclusively for educational purposes of pure scientific research,

provided-

(a) that such scientific instruments or apparatus are

consigned to a public or private scientific or educational institution

approved by the Minister responsible for education for the purpose

of this provision and are used under the control and responsibility

of such institution; and

(b) that instruments or apparatus of equivalent scientific

value are not being manufactured in Malta.

16. The importation of sound and video recording -

(a) of an educational, scientific or cultural character

produced by the United Nations or any of its specialised agencies;

(b) of an educational nature imported by a government

school or institution, by the University of Malta or by a school Of

institution registered under the Education Act provided that the

Director of Education certifies that the materials are solely of an

educational character and are to be used solely and entirely for

educational purposes by such school;

(c) of language courses.

17. Statues and artistic decorations cast abroad from originals

made by local artists, provided permission is obtained from the

Comptroller of Customs before the original is forwarded abroad for

casting.

18. The importation of goods the supply of which by any person

WOUld, in all cases, be exempt in tenus of the Second Schedule to this

Act.

19. The importation of food as defined in the Second Schedule

to this Act.

20. The importation of gold by the Central Bank: of Malta.

21. The importation of goods where the Director is satisfied

that the said goods were imported for temporary use only, and subject

to such conditions and to the provision of such security as the Director

may impose or require.

22. The importation of goods which are reexported without

beiog released or immediately upon being released from a customs

bond.

23. The importation of goods which are destroyed by the owner

before they are released or immediately upon being released from a

customs bond under such supervision and subject to such conditions

as the Director may impose or require.

24. The importation of goods into a freeport as defined in

the Malta Freeports Act : provided that this exemption shall apply cap. 334.

only to the extent that the sald importation is exempt from customs'

duty pursuant to the said Act, and shall be subjectto all the conditions

and limitations as are applicable under that Act to the said exemption

from customs dUty.

25. The importation of goods which is exempt from tax in virtue

of an exemption granted under subsection (3) of section II of this Act.

26. Theimportation of goods which are subject to a levy under

the Local Manufactures (promotion) Act.

27. The importation of industrial capital equipment as defined

in Part Two of the Second Schedule to this Act.

28. The importation of goods solely for agricultural or fishing

use as defined in Part Two of the Second Schedule to this Act or when

certified and approved as such by the Minis tel responsible for

agriculture or the Minister responsible for fisheries, as the case may

29. The importation of goods by a non-profit making institution

or a non-profit making organisation as defined in Part Two of the

Second Schedule to this Act.

Second Schedule

(Section 13)

NON-TAXABLE PRODUCTS

PART ONE

Exports

1. (1) Products which are exported.

(2) Products supplied to a taxable person established in

Malta who carries on the business of arranging or fmanCing the

export of products, for the purpose of the export of those products

by that person without the actual delivery of those products to that

person, provided the products are actually exported without any

processing or alterations, and subject to such conditions, evidence

or security as may be imposed or required by the Director.

2. Products in bond, supplies by duty free shops and Freepol1

activities

Products sold whilst they are in a customs bond and

(1)

which sale is entered by the Comptroller of Customs pursuant to

section 36 of the Customs Ordinance or any provision amendiog

or rllplacing the said section.

(2)

Products supplied to an operator of a duty free shop

pursuant to and in accordance with a licence issued under the Duty

Free Shop Regulations, 1991 or any other provisions amendiog or

replacing the said regulations.

(3)

Products supplied by or to a company within a freeport

zone as defmed in the Malta Freeports Act where the said supply

constitutes an activity which the said company is licensed to carry

on in terms of the said Act.

3. Provisioning and fuelling of ships and aircraft

Products supplied for the fuelling and provisioning

(1)

of vessels used for navigation on the high seas for the purpose of

commercial, industrial or fishing activities, of vessels used for

rescue or assistance at sea, and of aircraft used by airlines operating

for reward in international traffic.

Fuel supplied to vessels for the purpose of inshore

(2)

fishing.

4. Food

Any food as defmed in Part Two of this Schedule, butwithout

prejudice to ETS chargeable in respect of the provision of food

listed in the Fourth Schedule to this Act.

5. Pharmaceutical products

Pharmaceutical products as defined in Part Two of this

Schedule.

6. Health and Welfare

Human organs, human blood and human milk.

(1)

(2)

Products supplied in connection with and essential

for the provision of Services referred to in paragraphs (2) and (3)

of item 7 (Health and ,Welfare) of the Third Schedule by the

hospital, institution or home, as the case may be, providing the

said services.

7. Gold

Gold supplied to or by the Central Bank of Malta.

8. Printed matter and other articles

Books, newspapers, other printed matter and other

(1)

articles falling within the defmition of "Printed matter and other

articles" contained in Part Two of this Schedule.

Electronic, magnetic, optic or any other machine

(2)

readable media and any information which, in printed form, would

have the characteristics of books, newspapers and any other

printed matter falling within the definition of "Printed matter and

other articles" contained in Part Two of this Schedule.

9. Essential products,

Water, fuel and electricity supplied by a public authority.

10. Products mentioned in items 4,8,25,27;28 imd 29 of the

First Schedule.

PART TWO

DEFINITIONS

For ,the purposes of this Act, the terms described in this Part of

the Schedule shall have the meaning assigned to them in this Part.

(a) "Food" means the goods specified in the Customs Tariff

contained in the First Schedule of the Import Duties Act under

paragraphs (i) to (xii) ofthis item: but shall not include milkshake

tea, coffee and chocolate supplied in liquid form.

'

(i) Chapter 1, but excluding items falling under

subheadings 0101.11.00.00;

0101. 19.90.10;

0105. 11.11.10' , . . . .' 0105.11.19.10; 0105.11.91.10; 0105.11.99.10; 0105.12.00.10; 0105.19.20.10; 0105.19.90.10; 0105.92.00.10; 0105.93.00.10; 0105.99.10.10; 0105.99.20.10; 0105.99.30.10; 0105.99.50.10;

00.20.90;

0106.00.90.00.

(ii) Chapters 2 to 4 inclusive, but excluding items

falling under subheadings 0301.10.10.00 and 0301.10.90.00

in Chapters 3.

Items falling under subheadings 0504.00.00.00;

(iii)

0505.90.00.10; 0506.90.00.10; 0508.00.00.10; 0510.00.10.00;

0511.10.00.00; 0511.91.10.00; 0511.91.90.10; 0511.99.50.00;

0511.99.80. in Chapter 5.

(iv) Items falling under subheadings 0601.20.10.00;

0602.10.10.00; 0602.20.10.00; 0602.20.90.00; 0602.90.10.00;

0602.90.20.00; 0602.90.30.00 in Chapter 6.

(v) Chapters 7 to 12 inclusive, but excluding items

falling under subheadings 1209.30.00.00; 1209.99.91.00;

1209.99.99.00 in Chapter 12.

(vi) Chapter 13, but excluding items falling under

subheading 130LlO.00.00.

Chapters 15 to 20 inclusive, but excluding items

(vii)

falling under subheadings 1501.00.11.00; 1502.00.10.00;

1503.00.11.00; 1503.00.30.00; 1505.10.00.00; 1505.90.00.00;

1507.10.10.00; 1507.90.1 0.00; 1.508.10.10.00; 1508.90.10.00;

1511.10.10.00; 1511.90.91.00; 1512.11.10.00; 1512.19.10.00;

1512.21.10.00; 1512.29.10.00; 1513.11.10.00; 1513.19.30.00;

1513.21.11.00; 1513.21.19.00; 1513.29.30.00; 1514.10.10.00;

1514.90.10.00; 1515.11.00.00; 1515.19.10.00; 1515.21.10.00;

1515.29.10.00; 1515.30.10.00; 1515.30.90.00; 1515.40.00.00;

1515.50.11.00; 1515.50.91.00;.1515.60.10.00; 1515.60.90.00;

1515.90.10.00; 1515.90.21.00; 1515.90.31.00; 1515.90.40.00;

1515.90.60.00; 1516.20.10.00; 1518.00.10.00; 1518.00.31.00;

1518.00.39.00; 1518.00.91.00; 1518.00.95.00; 1518.00.99.00;

1521.10.10.00;

1521.10.90.00;

1521.90.10.00;

1522.00.31.00; 1522.00.39.00; 1522.00.91.00; 1522.00.99.0

in Chapter 15.

(viii) Chapter 21, but excluding items falling under

subheadings 2106.90.20.42; 2106.90.20.44; 2106.90.20.46;

2106.90.20.48; 2106.90.20.49; 2106.90.20.92;

2106.90.20.95; 2106.90.20.98; 2106.90.98.42;

2106.90.98.46; 2106.90.98.49.

(ix) Subheadings 2202.90.10.11; 2202.90.10.31;

2202.90.10.39;

2202.90.91.11; 2202.90.95.11;

2202.90.99.11;

2202.90.99.40;

2209.00.11.00

2209.00.19.00;

2209.00.91.00; 2209.00.99.0 in Chapter

22. Chapter 23

(x)

Subheadings 2501.00.10.00 and 2501.00.91.00

(xi)

in Chapter 25.

(xii) Subheadings 3301.90.21.00; 3301.90.29.00;

3301.90.39.00; 3302.10.21.00; 3302.10.29.91;

3302.10.29.93; 3302.10.40.00; 3302.10.90.00 in Chapter

33. "Pharmaceutical products" means the goods specified

(b)

in the Tariff referred to in item (a) of this Part of this Schedule

under-

Subheading 2905.45.00.{)0 in Chapter 29.

(i)

Chapter 30.

(n)

(iii) Subheadings 3301.90.31.00; 3306.10.00.00;

3306.20.00.00; 3306.90.00.00; 33fJ7 .90.00.10 in Chapter 33.

Subheading 3407.00.00.10 in Chapter 34.

(iv)

Subheading 35fJ7.10.00.GO in Chapter 35.

(v)

(vi) Subheadings 3822.00.00.10 and 3824.90.60.00

in Chapter 38.

(vii) Subheadings 4818.40.91.00 and 4818.40.99.00in

Chapter 48.

(viii) Subheadings 5601.10.10.90 and 5601.10.90.90

in Chapter 56.

(ix)

Subheading 70J5.1O.00.00 in Chapter 70.

(x) Subheadings 9001.30.00.00; 9001.40.41.00;

9001.40.49.00; 9001.40.80.00; 9001.50.41.00; 9001.50.49.00;

9001.50.80.00; 9004.90.10.10 and 9004.90.90.1 0; headings

9018, 9019, 9020, 9021, 9022 and 9023; and SUbheading

9025.11.91.00, in Chapter 90.

(xi)

Subheading 9402.10.00.10 in Chapter 94.

( c) "Printed matter and other articles" means the goods

specified in the Tariff referred to in item (a) of this Part of this

Schedule under-

Subheading 4820.20.00.00 in Chapter 48.

(i)

(ii) Chapter 49 but excluding items falling under

subheadings 4906.00.00.00; 4907.00.91.00; 4907.00.99.00;

4908.10.00.00;

4908.90.00.00;

4;909.00.10.00;

4909.00.90.00; 4910.00.00.90; and 4911.99{00.1O.

Subheading 7118.90.00.00 in Chapter 71.

(iii)

(iv) Chapter 98 but excluding items falling under

subheading 9803.00.00.00.

(d) "Industrial capital equipment" means the goods

specified in the Customs Tariff contained in the First Schedule of

the Import Duties Act falling under the following headings

8401; 8402; 8405; 8406; 8410; 8411; 8416; 8417;

8419.20.00.00; 8420; 8421.11.00.00; 8422.20.00.00;

8423.20.00.00; 8423.30,00.00; 8423.82.10.00; 8423.82.90.00;

8423.89:10.00; 8423.89.90.00; 8425.20.00.00; 8425.31.10.00;

8425.31.90.00; 8425.39.10.00; 8425.39.91.00; 8425.39.99.00;

8426; 8427; 8428.20.10.00; 8 4 2 8 . 2 0 . 3 0 . 0 0 ;

8428.20.91.00; 8428.20.99.00; 8429; 8430;

8433;8434;8435;8436;8437;8438;8439;8440;8441;8442;

8443.11.00.00; 8443.12.00.00; 8443.19.10.00; 8443.19.31.00;

8443.19.35.00; 8443.19.39.00; 8443.19.90.00; 8443.21.00.00;

8443.29.00.00; 8443.30.00.00; 8443.40.00.00; 8443.59.20.00;

8443.59.80.00; 8443.60.00.00; 8443.90.10.00;

8443.90.90.00; 8444; 8445; 8446; 8447; 8449; 8453; 8454;

8455;8456; 8457; 8462; 8463; 8464; 8474; 8475; 8477;

8478; 8479.10.00.00; 8479.20.00.00; 8479.30.10.00;

8479.30.90.00; 8479.40.00.00; 8479.50.00.00;

8479.89.30.00; 8479.89.65.00; 8479.89.70.00;

8479.89.75,00; 8480 in Chapter 84.

(e) "Goods solely for agricultural or fishing use" means

the goods specified in the Customs Tariff contained in the First

Schedule of the hnport Duties Act falling under the following

headings

2703 in Chapter 27; Chapter 31; 3808.20.10.00;

3808.20.15.00; 3808.20.30.00; 3808.20.40.00;

3808.20.50.00; 3808.20.60.00; 3808.20.80.00;

3808.30.11.00; 3808.30.13.00; 3808.30.15.00;

3808.30.17.00; 3808.30.21.00; 3808.30.23.00;

3808.30.27.00; 3808.30.30.00; 3808.30.90.00 in Chapter 38;

5608.11.11.00; 5608.11.19.00; 5608.11.91.00;

5608.11.99.00 in Chapter 56; 8208.40.00.00 in Chapter 82;

8424.81.10.00; 8424.81.31.00; 8424.81.39.00;

8424.81.91.00; 8424.81.99.00; 8432; 8433; 8434; 8436;

8437.10.00.00 in Chapter 84; 8701.90.11.00; 8701.90:15.00;

8701.90.21.00; 8701.90.25.00; 8701.90.31.00;

8701.90.35.00; 8701.90.39.00; 870I.90.50.00in Chapter 87;

8902 in Chapter 89.

"Non-profit making institution" or "non-profit

(0

making organisation" means an institution or organisation

(i). whose objects are clearly defmed in its statute;

(ii) whose objects expressJy exclude profit making;

(iii) whose statute provides that no part of its income

or property is available directly or indirectly to any member,

proprietor or shareholder;

(iv) which, in the opinion of the Director, is managed

and administered in accordance with the provisions of its

statute and for the purpose of its stated objects;

(v) which does not systematically aim to make a profit.

Third Schedule

(Section 20)

EXEMPT SERVICES

1. Services connected with exports and importations

(I) The provision of services in procuring for a taxable

person the export of products from Malta or the supply of products

or provision of services outside Malta.

(2) The provision of services to a person established outside

Malta consisting of work on tangible movable property imported

for the purpose of undergoing such work in Malta and exported

out of Malta by the person who provided those services or by his

customer.

(3) The provision of services to a person established outside

Malta in procuring the importation of goods into Malta.

2. Services to customers abroad

The provision of any of the services listed in this paragraph

when the person to whom they are provided is not resident in Malta

(a) advertising services;

(b) services of consultants, engineers, consultancy

bureaus, advocates, legal procurators, notaries public,

accountants, auditors, financial advisors, data processing and

the provision of information;

(c) obligations to refrain from pursuing or exercising

in whole or in part any business activity;

(d) banking, financial, insurance and re-insurance

transactions, excluding the letting of a place for the safe

deposit of any goods or documents;

(e)

the provision of human resources;

(f) the services of an agent who acts in the name and

for the account of another, when he procures for his principal

any of the services referred to in this item.

3. Port and Freeport services

(1) The provision of any services by the Malta

MaritimeAuthority, including the granting of licences and

certificates, in connection with all matters relating to ports and

yachting centres in tenns of the Malta Maritime Authority

Act, and of any regulations made under that Act. or in terms of

any special agreement entered into by the said Authority in respect

of any matter referred to in the said regulations and providing for

charges in. place of any rates leviable under the said regulations.

(2) The provision of any services by the Malta Maritime

Authority. including the granting of licences and certificates, in

connection with all matters relating to port work in tenns of

the Port Workers Ordinance and of any regulations made under Cap.17I.

that Ordinance or in terms of any special agreement entered into

by the said Authority in respect of any matter referred to in the

said regulations and providing for charges in place of any rates

leviable under the said regulations.

(3) The supply of any service by the Malta Maritime

Authority. including the granting of certificates and registration,

in connection with the registration of ship in terms of the

Merchant Shipping Act and of any regulati.ons made under that Cap. 234.

Act.

(4) Services provided by or to a company within a freeport

zone as defined in the Malta Freeports Act where the said

provision constitutes an activity which the said company is

licensed to carry on in tenns of the said Act.

4. International transport

The provision of services consisting in international transport

of goods and passengers.

5. Supplies, repairs etc of ships and aircraft

(1) The provisioning, repair, modification, chartering and

hiring of vessels or aircraft referred to in paragraph (l) of item 3 .

of the Second Schedule to this Act, and the provisioning, hiring,

repair and maintenance of equipment, including fishing

equipment, incorporated or used therein.

(2) The provision of services, other than those referred to

in paragraph (1) of this item, to meet the direct needs of the vessels

and aircraft referred to in the said paragraph or of their cargoes.

6. Food

The provision of any food. as defined in Part Two of th

Second Schedule to this Act excluding any provision of food whi~

is subject to tax in terms of section 18 of this Act.

7. Health and Welfare

The provisions of services by a person in the exercille

(l)

of any profession regulated by the Medical and Kindred

Professions Ordinance.

(2) The provision of care or medical or surgical treatment

in any Government hospital or institution or in any other hospital

or institution approved by the Minister for the purposes of this

paragraph.

(3) The provision of welfare services. including services

provided by homes for the elderly and homes for persons sufferiJrg

from some permanent physical or mental disability. and services

for the protection and care of children. young people and perSOM

suffering from some permanent physical or mental disability;

provided by any'government institution or by any institution or

organisation recognised by the Director as a non-profit making

institution or approved by the Minister for the purpose of this

paragraph as an institution whose activities fall within the social

and 'welfare policy of the government.

(4) The provision of transport services for sick, injured or

disabled perSons in vehicles specially equipped for that purpose.

8. Education

The provision of education, or educational research,

(1)

including distance learning, by a government school or institution

by the University of Malta, by a school or institution registered

under the Education Act or by any educational establishment

recognised as such by the Director.

(2) The provision of education or educational research

including distance learning, of a kind provided by a school or

university, or of religious instruction, by a non-profit making

institution recognised as such by the Director.

(3) Tuition given privately by teachers acting in an

independent capacity in subjects which are normally taught in the

course of education provided by a school or university but

excluding tuition in recreational, physical or sporting activities

or disciplines.

9. 1fansport

The provision of-

(a) transport provided by the scheduled bus service

consisting of scheduled trips on scheduled routes;

(b) scheduled inter-island sea trips supplied by authorised

earners, and other scheduled sea transport services recognised as

such by the Director.

(c) school transport provided by an educational

establishment recognised as such by the Director or supplied to

any such establishment for the purpose of being provided by it as

school transport;

(d) transport supplied or organised by an employer or by a

central office to transport the employees to and from their place

of work and recognised as such by the Director;

(e) for the purpose of these provisions, "central office"

shall have the meaning assigned to it by Legal Notice No. 144 of

1991.

10. Investments Services

The provision of any of the services specified in the First

Schedule to the Investment Services Act, 1994.

11. Immovable property

(J) The letting of immovable property excluding -

( a) the letting of or the provision of accommodation

in any premises which for the purpose of the said letting or

accommodation is required to be licensed in virtue of the

Hotels and Catering Establishments Act or of the Guest Cap. 197.

Houses and Holiday Furnished Premises Act or in a holiday Cap. 240.

camp or camping site;

the letting of premises and sites for parking vehicles

(b)

where such premises or sites have been designated by the

Director as parking areas or which fall to be treated as such in

terms of such regulations as may be prescribed;

(c) the letting of permanently installed equipment and

machinery.

(2) The transfer of immovable property. including any right

referred to in paragraphs (a). (b) and (c) of section 310 of the Civil

Code and any emphyteutical grant, but excluding an emphyteuticaJ

grant for less than fifty years in respect of any property referred to

in sub-paragraphs (a), (b) and (c) of paragraph (1) of this item.

12. Insurance services

The provision of insurance and reinsurance services. including

related services performed by insurance brokers and insurance

agents.

13. Credit, banking and other services

The provision of credit, banking and other services specifically

in relation to

(1) interest charged on the making of any advance or

the granting of credit;

(2) interest charged on the granting of. or any dealing

in. credit guarantees or other security for money;

(3) transactions, including negotiation. concerning

currency. bank notes and coins normally used as legal tender

Provided that nothing in this item shall be construed as

affecting the provisions of item lOaf this Schedule.

14. Postal services

The provision of services by the public postal services and of

goods incidental thereto.

15. Cultural and religious services

(i)

Religious services

(ii) The provision of such cultural services as may be

approved by the Minister.

16. Services by band clubs

The supply of services consisting in public performances

by a philharmonic society which the Director is satisfied

constitutes a bona fide band club.

17. Sports

The provision by non-profit making organisations of such

services related to sport or physical recreation as may be approved

by the Minister.

18. Provisions related to certain exempt services

(1) The provision of human resources by a non-profit

making institution which is recognised as such by the Director

for the purpose of providing services referred to in paragraph (2)

or (3) of item 7 or in paragraph (1) or (2) of item 8 of this Schedule.

(2) The provision of services by a non-profit making

organisation in the course of an activity designed to raise funds

to be used for the provision of services which are exempt in terms

of paragraph (2) or (3) of item 7 or of paragraph (1) or (2) of

item 8 provided the activity is recognised by the Director as being

exclusively designed for the said purpose.

19. Services by non-profit making organisations to their

members

The provision of services for the benefit of their members

in return for a subscription fixed in accordance with their rules

by non-profit making organisations with aims of a political, trade

union, patriotic, philosophical, philanthropic or civic nature or

whose main purpose is to represent and promote the common

business or professionals interests of their members: provided

that in any case where, in the opinion of the Minister, this

exemption is likely to cause distortion of competition, this

exemption shall be subject to such exceptions or limitations as

the Minister may by order in writing determine.

20. Services by government departmentS and any other public

authority

The provision of any service by any government

(1)

department and any other public authority.

The provision of agency services related to lotto and

(2)

lot~ries. and such other provisions.rylated to gambling as maybe

approved by the Minister.

Inter Group Services

21. The provision of any service by one company to another when

both companies are members of the same group of companies unless

the Director is satisfied that the creation of a company or companies

within the group has for its main purpose the avoidance of tax; and

for this purpose "a group of companies" shall have the same

meaning assigned to the phrase by section 42 of the Duty on

Documents and Transfers Act, 1993.

Fourth Schedule

(Section 77)

Second Schedule to the Import Duties Act, Cap. 337