MT
ACT No. IV of 2011 AN ACT to implement Budget measures for the financial year 2011 and other administrative measures.
Table of Provisions (38)
Statutory Text (38 Articles)
I assent.
A NTON T ABONE
(L.S.)
Acting President
22nd March, 2011
ACT No. IV of 2011
AN ACT to implement Budget measures for the financial year
2011 and other administrative measures.
BE IT ENACTED by the President, by and with the advice and
consent of the House of Representatives, in this present Parliament
assembled, and by the authority of the same, as follows:-
The short title of this Act is the Budget Measures Short title.
Implementation Act, 2011.
PART I
The provisions of this Part shall be deemed to have come Coming into
force of this
into effect on the 1st January, 2011.
Part.
For the purpose of this Part, "revenue" has the same Interpretation.
meaning as is assigned to it in article 2 of the Financial Cap. 174.
Administration and Audit Act, but does not include proceeds from
loans.
(1) Subject to the provisions of this Act, the
Government of Malta may raise in Malta, by way of loan, a sum of
money not exceeding five hundred and seventy million euro.
(2) For the purpose of raising the aforesaid loan the Minister
responsible for Finance is hereby authorised to issue stock in Malta
under the provisions of the Local Loans (Registered Stock and
Securities) Ordinance on such terms and conditions as the said
Minister may approve.
Any money borrowed under the authority of this Part shall
be appropriated and applied for the purpose of
(a) meeting excess expenditure over revenue incurred in
the Consolidated Fund for year 2011 and, or subsequent years;
(b) redeeming registered stocks which are due for
redemption during 2011;
(c)
repaying a bank loan originally granted to the
Government of Malta to take over loan liabilities held in the
name of Malta Drydocks Corporation; and
(d) effecting portfolio changes in relation to amounts
raised through Treasury Bills, amounts raised through
Government Stocks, and in respect of loans raised outside Malta
as and when required in line with Government’s debt
management policies.
PART II
(1) This Part of this Act amends the Income Tax Act and
it shall be read and construed as one with the Income Tax Act,
hereinafter in this Part referred as "the principal Act".
(2) The provisions of this Part shall come into force as
follows
(a)
articles 7(a), 10(b), 11, 13, 14(b), 16, 17, 18, 20(d),
20(e), 21, 22 and 24 as from year of assessment 2011;
(b) articles 7(b), 8(a), 8(c), 8(d), 10(a), 20(a) and 20(g)
on the 1st January 2011;
(c)
articles 7(c), 7(d), 8(e), 8(f) and 8(g)(ii) as from year
of assessment 2009;
(d)
articles 8(b), 9(a) and 19 on 26th November, 2010;
(e)
article 8(g)(i) on 16th April, 2010; and
(f)
articles 12, 20(b) and 20(c) as from year of
assessment 2012.
Subarticle (1) of article 2 of the principal Act shall be Amendment of
article 2 of the
amended as follows
principal Act.
(a)
for the definition "petroleum", there shall be
substituted the following
" "petroleum" means crude oil of whatever density,
natural gas and other hydrocarbons and substances that
may be extracted therefrom;";
(b) immediately after the definition "property
company", there shall be added the following new definition
'' "property partnership" shall mean a partnership as
defined in article 5(1)(b) which owns immovable property
situated in Malta, or any real rights thereon, or a
partnership which, directly or indirectly, holds shares or
other proprietary interests in any entity or person, which
owns immovable property situated in Malta, or any real
rights thereon, where five percent or more of the total
value of the said shares or other proprietary interests so
held is attributable to such immovable property or rights
Provided that where a partnership, entity or person
carrying on a trade or business owns immovable property
situated in Malta, or any real rights thereon, consisting
only of a factory, showroom, warehouse or office used
solely for the purpose of carrying on such trade or
business, such partnership, entity or person shall, for the
purpose of this definition, be treated as not owning
immovable property if not more then fifty percent of the
value of its assets consist of immovable property situated
in Malta, or any real rights over such property, and it does
not carry on any activity the income from which is derived
directly or indirectly from immovable property situated in
Malta;";
(c)
in the definition ''foreign income account'',
paragraph (a) thereof shall be substituted by the following new
paragraph
''(a) profits resulting from royalties and similar
income arising outside Malta and from dividends, capital
gains, interest, rents, income or gains derived from a
participating holding or from the disposal of such holding
other than a participating holding in a company resident in
Malta, and any other income derived from investments
situated outside Malta, which are liable to tax in Malta and
are receivable by a company registered in Malta not being
a company registered under the Malta Financial Services
Authority Act, and''; and
(d) for the definition "property company" there shall be
substituted the following
'' ''property company'' shall mean a company which
owns immovable property situated in Malta or any real
rights thereon or a company which holds, directly or
indirectly, shares or other interests in any entity or person,
which owns immovable property situated in Malta or any
real rights thereon where five percent or more of the total
value of the said shares or other interests so held is
attributable to such immovable property or rights
Provided that where a company, entity or person
carrying on a trade or business owns immovable property
situated in Malta or any real rights thereon, consisting only
of a factory, showroom, warehouse or office used solely
for the purpose of carrying on such trade or business, such
company, entity or person shall, for the purpose of this
definition, be treated as not owning immovable property if
not more then fifty percent of the value of its assets consist
of immovable property situated in Malta or any rights over
such property and it does not carry on any activity the
income from which is derived directly or indirectly from
immovable property situated in Malta;''.
Article 5 of the principal Act shall be amended as follows
(a)
subarticle (1) thereof shall be amended as follows
(i) in subparagraph (iv) of paragraph (a) thereof,
for the words "subarticle (13)(b)(ii)." there shall be
substituted the words "subarticle (13)(b)(ii);", and
immediately thereafter there shall be added the following
new subparagraph
"(v) gains or profits arising from the transfer
of the ownership or usufruct of or from the
assignment or cession of any rights over any interest
in a partnership. For the purposes
of
this
subparagraph "transfer" shall mean
(a) a transfer of a full or partial interest
and any alienation of any such full or partial
interest in a partnership; and
(b) a deemed transfer of an interest in
the partnership. Where a person acquires or
increases a partnership share there is a deemed
transfer of an interest in the partnership to that
partner from the other partners;";
(ii) in paragraph (b) thereof, immediately before
the definition "transfer", there shall be inserted the
following new definitions
" "partnership" shall mean a commercial
partnership en nom collectif, or commercial
partnership en commandite the capital of which
is not divided into shares and, except for the
purposes of subparagraph (v)(b), shall include
any other partnership having a legal personality
distinct from that of its members other than a
commercial partnership en commandite the
capital of which is divided into shares;
"partnership share" means the share to
which a person is entitled in the income of the
partnership and to assets available for
distribution on a winding up of the
partnership;";
(iii) in the definition ''transfer'', immediately after
the words ''subarticles (9A) and (13)(b),'' there shall be
added the words ''and for the avoidance of doubt includes
any transfer of an asset by a company to its shareholders,
or by a commercial partnership en nom collectif or
commercial partnership en commandite the capital of
which is not divided into shares to its members, in the
course of winding up the company or partnership or in the
course of a distribution of assets to its shareholders or
partners pursuant to a scheme of distribution,'';
(b) immediately after the last proviso to paragraph (c) of
subarticle (3) thereof, there shall be added the following new
proviso
''Provided also that the acquisition cost of shares
resulting from a conversion of a partnership into a
company as referred to in article 45B shall be the cost of
acquisition of the interest (representing those shares) held
in the partnership that had been converted into the said
company;'';
(c)
immediately after subarticle (3) thereof, there shall
be added the following new subarticle
"(3A) For the purpose of ascertaining the gains or
profits arising from any transfer of property in terms of
sub-article (1)(a)(v)
(a) the acquisition cost in each of the
circumstances mentioned in this paragraph
shall, subject to any adjustments that may be
prescribed, be determined as follows
(i) the acquisition cost of an
interest acquired from an existing partner
shall be the actual purchase price;
(ii) the acquisition cost of an
interest acquired causa mortis shall be the
lower of the value declared in a deed of
transfer causa mortis and the price which
that interest would have fetched had it
been sold on the open market on the date
of that acquisition;
(iii) the acquisition cost of an
interest acquired by way of a capital
contribution made to the partnership shall
be the amount or value of such
contribution;
(iv) the acquisition cost of an
interest resulting from a conversion of a
company into a partnership as referred to
in article 45A shall be the cost of
acquisition of the shares (representing
that interest) held in the company that had
been converted into the said partnership
Provided that where the said shares
consist of shares whose return is limited
to a fixed rate of return the acquisition
cost shall be taken to be zero; and
(b) any transfer consisting of an
exchange shall be considered as if two separate
transfers were taking place; and
(c) the provisions of subarticle (2)(d),
(e), and (f) and shall apply mutatis mutandis to
this subarticle.";
(d) immediately after subarticle (6) thereof, there shall
be added the following new subarticle
"(6A) The provisions of subarticle (1)(a)(v) shall
not apply to gains or profits relating to property transferred
in the circumstances referred to in subarticle (5)(e) and
(f).";
(e)
in paragraph (iii) of subarticle (9), for the words
''For the purpose of this paragraph "property company" shall
mean a company which owns immovable property situated in
Malta, or any rights over such property, or a company which
holds, directly or indirectly, shares or interests in a body of
persons which owns immovable property situated in Malta, or
any rights over such property:'' there shall be substituted the
words ''For the purpose of this paragraph the proviso to the
definition of ''property company'' in article 2(1) shall not
apply:'';
(f)
for paragraph (h) of subarticle (9A) thereof, there
shall be substituted the following new paragraph
''(h) For the purpose of paragraph (a) the term
"shares in a company" shall mean shares in a company
which, on the date of the acquisition referred to in the said
paragraph owned, directly or indirectly, any immovable
property situated in Malta or any real rights thereon and
the said property or any part thereof is still, directly or
indirectly, owned by such company on the date it ceases to
be a member of the group in accordance with the
provisions of paragraph (b). For the purpose of this
paragraph a company is treated as indirectly owning
immovable property if it holds, directly or indirectly,
shares or other interests in any entity or person, which
owns immovable property situated in Malta or any real
rights thereon where five percent or more of the total value
of the said shares or other interests so held is attributable to
such immovable property or rights.''; and
(g) paragraph (b)(ii) of subarticle (13) thereof shall be
amended as follows
(i) in the first proviso thereto, for the words ''or
in the proportion in the value'' there shall be substituted the
words ''and in the proportion in the value''; and
(ii) in the last proviso thereto, for the words ''For
the purpose of this paragraph "property company" shall
mean a company which owns immovable property situated
in Malta, or any rights over such property, or a company
which holds, directly or indirectly, shares or interests in a
body of persons which owns immovable property situated
in Malta, or any rights over such property.'' there shall be
substituted the words ''For the purpose of this paragraph
the proviso to the definition of ''property company" in
article 2(1) shall not apply:''.
Article 5A of the principal Act shall be amended as
(a)
in paragraph (i) of subarticle (4) thereof, for the
words "or any other provision of the Income Tax Acts or any
other law." there shall be substituted the words "or any other
provision of the Income Tax Acts or any other law;" and
immediately thereafter there shall be added the following new
paragraph
"(j) A transfer of property by a company to its
shareholder or to an individual related to its shareholder in
the course of winding up or in the course of a distribution
of assets pursuant to a scheme of distribution, where the
said shareholder is an individual or his spouse, who owns
or own, all of the share capital (disregarding the holding of
one share having no preferential rights) of the said
company transferring the property as aforesaid
For the purpose of this paragraph an individual is
related to the said shareholder if such individual is his
spouse, his descendant or ascendant in the direct line, or
the spouse of any such descendant or ascendant, or, in the
absence of any descendants in the direct line, his brother or
sister or a descendant of his brother or sister
Provided that this paragraph shall only apply where
all the following conditions have been satisfied
(i) the said shareholder held all of the
share capital (disregarding the holding of one
share having no preferential rights) of the
company transferring the property for a period
exceeding five years immediately preceding the
date of the transfer of the property as aforesaid;
(ii) the said property consists of one
transferable unit, being either a dwelling house,
garage, shop, office, store or warehouse;
(iii) the said property is held as a capital
asset by the company and has been so held for a
period exceeding five years immediately
preceding the date of the transfer of the
property as aforesaid
Provided further that, on a subsequent transfer of
the said property by the said shareholder or related
individual, the provisions of subarticle (3)(b) shall not
apply
Provided also that where the said property is
subsequently transferred by the said shareholder or related
individual, as the case may be, to a person referred to in
subarticle (4)(a)(i), and such person subsequently transfers
the said property within a period of five years from the
date of its acquisition the provisions of subarticle (3)(b)
shall not apply
Provided also that every company resident in Malta
shall allocate the distributable profits derived from a
transfer to which this paragraph applies, and on which no
tax is payable in accordance with this paragraph, to the
final tax account.";
(b) in paragraph (a) of subarticle (2) thereof, in the
definition of "transfer", the words "any transfer of property by a
company to its shareholders in the course of winding up" shall
be deleted; and
(c)
in paragraph (a) of subarticle (6) thereof, for the
words "In a contract of emphyteusis the ground rent" there shall
be substituted the words "In a contract of emphyteusis and in
any transfer of property where the consideration consists of or
includes periodical payments to which article 4(1)(d) or (e)
applies, the ground rent or any such other periodical payment".
Subarticle (1) of article 12 of the principal Act shall be
amended as follows
(a)
in subparagraph (ii) of paragraph (c) thereof, for the
words "long term policies of insurance and of any shares or
securities in a company" there shall be substituted the words
"long term policies of insurance, of any interest in a partnership
which is not a property partnership and of any shares or
securities in a company"; and
(b) for paragraph (p) thereof, there shall be substituted
the following
"(p) any dividend paid by a company whose main
source of income in the relevant year is charged at the rate
provided for in article 56(13) in respect of a Contractor;".
Subarticle (1) of article 14 of the principal Act shall be
amended as follows
(a)
in paragraph (n) thereof, for the words "nine
hundred and thirty-five euro (935) per child:" there shall be
substituted the words " nine hundred and thirty-five euro (€935)
per child."; and
(b)
the proviso thereto shall be deleted.
Subarticle (1) of article 14B of the principal Act shall be
amended as follows
(a)
paragraph (b) thereof shall be substituted by the
following
"(b) one thousand and six hundred euro (€1,600)
in respect of each child who attended such secondary
school or one thousand and two hundred euro (€1,200) in
respect of each child who attended such primary school or
kindergarten:"; and
(b) immediately after paragraph (b) as substituted, there
shall be added the following proviso
"Provided that the deduction shall only be allowed
if the payment and the details of the individual making the
claim are confirmed by information provided, in such
format and content as determined by the Commissioner, by
the head of the relative school or kindergarten.".
For article 23 of the principal Act there shall be Substitution of
article 23 of the
substituted the following
principal Act.
" Profits from
(1) Where any person engaged in
production of
the business of exploration for, and the
petroleum.
production of, petroleum (hereinafter referred to
as "the Contractor") derives, or aims to derive,
gains or profits through a Production Sharing
Contract (hereinafter referred to as "the
Contract") granted to such person by the
Government of Malta by way of licence in
accordance with the provisions of the Petroleum
Production Act, the Continental Shelf Act and
the Petroleum (Production) Regulations, or any
provision amending or substituting the said Acts
or Regulations, the chargeable income of the said
person from such business shall be determined as
set out in this article.
(2) (a)
The gains or profits derived by
the Contractor from the production of petroleum
for any basis year, being the year immediately
preceding a year of assessment, shall be arrived
at by deducting the recoverable costs as defined
in the Contract and not yet fully recovered by the
Contractor, from the total of the value of the cost
recovery petroleum and of the share of profit
petroleum, as defined in the Contract, allotted to
the Contractor for that year, to which shall be
added any ancillary or incidental income for the
same year.
(b) Where after such deduction as is
referred to in paragraph (a) there remains any
balance of unabsorbed recoverable costs, the
amount of such unabsorbed costs shall be carried
forward to the following year and shall be added
to and become part of the recoverable costs for
that year.
(c) The procedure referred to in paragraph
(b) shall be followed in subsequent years until all
recoverable costs shall have been absorbed.
(3) (a)
For the purposes of this article,
particularly for the purposes of subarticle (2),
each Contract shall be deemed to constitute a
separate and distinct source of income and any
Contractor deriving gains or profits from more
than one Contract shall be subject to tax as if he
were a separate and unconnected person with
respect to each such Contract.
(b) Where more than one petroleum field
is in production in an area covered by the same
Contract, the gains or profits from each such
field shall be determined as if each such field
constitutes a separate and distinct source of
income arising to a separate person, so however
that the Contractor shall have the right to identify
the fields in the said area where the cost of
exploration and development operations are to be
taken into account in determining the relative
gains or profits.
(4) The provisions of articles 16 to 22
shall not apply in the case of any company in any
year in which the company is operating under a
licence referred to in subarticle (1).
(5) (a)
Notwithstanding
anything
contained in the Income Tax Acts, where a non-
resident sub-contractor renders services to a
Contractor in Malta, such Contractor shall
withhold tax at the rate set out in article
56(13)(b) on payments made to the sub-
contractor for services rendered in Malta and
shall pay to the Commissioner any tax so
withheld within thirty days from the making of
the deduction.
(b) Where a Contractor fails to deduct and
pay tax in accordance with paragraph (a), the
provisions of article 73(4) of this Act and of
article 40(1) of the Income Tax Management Act
shall apply mutatis mutandis.
(c) The tax withheld in accordance with
paragraph (a) shall be considered as a final
withholding tax unless the sub-contractor notifies
the Commissioner that this tax is to be
considered as a provisional tax payment to be
credited against the tax liability of the said sub-
contractor’s chargeable income for the relevant
year of assessment computed in accordance with
the provisions of the Act.
(d) The notification referred to in
paragraph (c) shall be made by not later than the
tax return date for the relevant year of assessment
and in such form as the Commissioner may
require.
(6) Except for gains or profits derived
from the production of petroleum referred to in
subarticles (1) and (2), any income or deemed
income derived by a Contractor and subject to
tax under any of the provisions of this Act shall
be so brought to charge in accordance with the
said provisions and at the applicable rates, but no
deduction shall be granted thereagainst in respect
of any loss or outgoing expense incurred in
connection with the exploration for or the
production of petroleum.".
14. Article 26 of the principal Act shall be amended as Amendment of
article 26 of the
follows
principal Act.
(a)
in paragraph (a) thereof, for the words "other than
alimony payments as provided for in article 14A and school fees
as provided for in article 14B;" there shall be substituted the
words "other than those specifically allowed by this Act;"; and
(b) in paragraph (g) thereof, for the words "voluntary
nature." there shall be substituted the words "voluntary nature;"
and immediately thereafter there shall be added the following
new paragraph
"(h) any interest, discount or premium paid or
payable to a person not resident in Malta where -
(i) the person not resident in Malta
derives or benefits from the said interest,
discount or premium, directly or indirectly,
from the granting of loans or from any form of
credit to finance the acquisition, development,
construction, refurbishment, renovation of
immovable property situated in Malta or any
right thereon including professional fees related
thereto (including fees related to the acquisition
of finance) and any other matter which
increases or enhances the value of such
immovable property or any right thereon; and
(ii) the said interest, discount or
premium is exempt from tax under the
provisions of article 12(1)(c)(i); and
(iii) the payor of the interest, discount or
premium is a person related to the person not
resident in Malta.
For the purpose of this paragraph a person is
deemed to be related to a person not resident in Malta if
(i) that person and the person not
resident in Malta are, directly or indirectly,
controlled or beneficially owned to the extent
of more than 10% by the same persons; or
(ii) that person owns, directly or
indirectly, more than 10% of the ordinary share
capital or voting rights of the person not
resident in Malta.".
15. In paragraph (c) of subarticle (8) of article 27D of the
principal Act, for the words "by the trustee or the beneficiary
himself." there shall be substituted the words "by the trustee or the
beneficiary himself:", and immediately thereafter there shall be added
the following new proviso to the whole subarticle
"Provided that the provisions of this subarticle shall apply
mutatis mutandis where none of the trustees of a trust is a
person resident in Malta and the beneficiaries of the such trust
include persons that are -
(i)
ordinarily resident and domiciled in Malta; or
(ii) ordinarily resident or domiciled in Malta and
the relevant income is received in Malta.".
16. For the proviso to subarticle (1) of article 33 of the
principal Act, there shall be substituted the following
"Provided that where the recipient derives, or is deemed to
have derived pursuant to the provisions of article 43(6)(a), (b)
or (c), investment income referred to in article 41(a)(viii), tax
shall be deducted at the rate specified in article 56(6) or such
other rate as may be prescribed and rules may also be prescribed
on how the investment income provisions are to be applied in
particular circumstances.".
17. Article 41 of the principal Act shall be amended as Amendment of
article 41 of the
principal Act.
(a)
for item (4) of subparagraph (viii) of paragraph (a)
thereof there shall be substituted the following
"(4) the dividend referred to in article 43(6)(a) and
the income or gains referred to in article 43(6)(c);"
and immediately thereafter the following new item shall be
added the following
"(5) the income referred to in article 43(6)(b);";
(b) for paragraph (b) thereof there shall be substituted
the following
"(b) "payor" shall mean the person who is liable to
make, or if different, who makes a payment of investment
income and with respect to investment income referred to
in paragraph (a)(viii)(4) shall mean the company which
earned the profits deemed distributed pursuant to article
43(6)(a) and article 43(6)(c) and with respect to investment
income referred to in paragraph (a)(viii)(5) shall mean the
Commissioner;"; and
(c)
the proviso to paragraph (c) thereof shall be
substituted by the following
"Provided that with respect to the investment
income referred to in paragraph (a)(viii)(2) and (3) a
recipient shall be an individual who is resident in Malta
and with respect to the investment income referred to in
paragraph (a)(viii)(4) and (5) a recipient shall be the
individual referred to in article 43(6)(a), (b) and (c), as the
case may be, and in the circumstances referred to in article
43(6)(e) such individual must be ordinarily resident and
domiciled in Malta.".
18. Subarticle (6) of article 43 of the principal Act shall be
amended as follows
(a)
for paragraph (a) thereof there shall be substituted
the following
"(a) Where an individual resident in
Malta is registered for the purpose of article
48(4) or article 48(4A) of the Income Tax
Management Act, or is beneficially entitled,
directly or indirectly, to the profits of a
person or entity which is so registered, such
individual shall be deemed to have received
a dividend or dividends corresponding to
the amount of profits (that is, the profits net
of the tax paid or payable by the company
in respect of which he or the said person or
entity are so registered) that he is
beneficially entitled to receive directly or
indirectly from such company, on the first
day of the accounting period following that
in which such profits were earned by the
said company or on the date such profits
where distributed whichever is the earlier
Provided that this paragraph shall not
apply where the said profits were
distributed to such individual resident in
Malta registered for the purpose of article
48(4) or article 48(4A) of the Income Tax
Management Act by way of dividends in
the accounting period in which such profits
were earned by the said company
Provided further that when an
individual resident in Malta registered for
the purpose of article 48(4) or article
48(4A) of the Income Tax Management Act
has been deemed to have received a
dividend or dividends on the first day of the
accounting period following that in which
such profits were earned by the said
company such dividend or dividends shall
for the purpose of article 41(a)(viii)(2) be
deemed to have been paid on such day.";
(b) paragraph (b) thereof shall be substituted by the
following
"(b) An individual resident in Malta beneficially
entitled, directly or indirectly, to the profits of a person or
entity which has received the income referred to in article
41(a)(viii)(3), shall be deemed to have received, at the time
that the said person or entity has received the said income,
so much of that income as corresponds to his, direct or
indirect, entitlement to receive that income by way of
dividend or other means through or from any person or
entity in any manner whatsoever:";
(c)
paragraph (d) thereof shall be substituted by the
following
"(d) (i) Notwithstanding any other
provision in the Income Tax Acts, where an
individual becomes beneficially entitled,
directly or indirectly, to the profits of a
person or entity or any such entitlement is
increased in any way and such person or
entity has received but not yet distributed, or
is entitled to receive (at the time such
individual became so entitled or had his
entitlement so increased), directly or
indirectly, the income referred to in article
41(a)(viii)(2) and (3), such individual shall
be deemed to have received a dividend
chargeable to tax under this Act at the time
that he became so entitled or had his
entitlement so increased as corresponds to
his, direct or indirect, entitlement or
increased entitlement to receive that income
by way of dividend or other means through
or from any person or entity in any manner
whatsoever and such individual shall be
obliged to declare the said dividend in his
return of income
Provided that the provisions of this
paragraph shall not be applicable where the
Commissioner is satisfied that the events
referred to in this paragraph were not the
result of some arrangement or scheme the
sole or main purpose of which was the
avoidance of or postponement of the
payment of tax.
(ii) Notwithstanding
any
other
provision in the Income Tax Acts, where an
individual not resident in Malta changes his
residence and becomes resident and
domiciled in Malta and at the time of the
change becomes or is beneficially entitled,
directly or indirectly, to the profits of a
person or entity and such person or entity
has received, directly or indirectly, but not
yet distributed the income referred to in
article 41(a)(viii)(2) and (3), such individual
shall be deemed to have received a dividend
chargeable to tax under this Act at the time
that he becomes resident and domiciled in
Malta as corresponds to his, direct or
indirect, entitlement to receive that income
by way of dividend or other means through
or from any person or entity in any manner
whatsoever and such individual shall be
obliged to declare the said dividend in his
return of income
Provided that the provisions of this
paragraph shall not be applicable where the
said individual was not at any time resident
in Malta throughout the whole of the period
of five years immediately preceding the date
such individual changes his residence and
becomes ordinarily resident and domiciled
in Malta.
(iii) Notwithstanding
any
other
provision in the Income Tax Acts, where an
individual not resident in Malta, whether or
not registered for the purpose of article
48(4) or article 48(4A) of the Income Tax
Management Act, receives, directly or
indirectly, the income referred to in article
41 (a)(viii)(2) and (3), and such individual
was at any time within the five year period
preceding the date on which he received,
directly or indirectly the said income,
resident and domiciled in Malta, such
income shall be chargeable to tax under this
Act and the said individual shall be obliged
to declare the said income in a return of
income.
(iv) For the purpose of paragraphs (i)
to (iii) above the reference to "recipient" in
article 42(a)(viii)(2) shall mean any person
or entity."; and
(d) paragraph (e) thereof shall be substituted by the
following
"(e) Where the immediate shareholder of the
company, person or entity referred to in paragraphs (a), (b)
and (c) is not an individual and is not resident in Malta, the
provisions of the said paragraphs shall only be applicable
when the said individual is ordinarily resident and
domiciled in Malta.".
19. Immediately after article 45A of the principal Act there Addition of new
article to the
shall be added the following new article
principal Act.
" Conversion
Notwithstanding anything contained
of a
in this Act, where, in accordance with the
partnership
provisions of the Companies Act, a commercial
into a
company.
partnership en nom collectif or a commercial
partnership en commandite the capital of which
is not divided into shares is converted into a
company, it shall be deemed for all the purposes
of the Income Tax Acts that no transfer or
acquisition of assets has taken place and for the
purpose of determining the chargeable income
or gains on a transfer of the said assets by the
company, the cost and date of acquisition taken
into account shall be the cost and date as
applicable to the commercial partnership that
has been converted.".
20. Article 56 of the principal Act shall be amended as Amendment of
article 56 of the
principal Act.
(a)
for the proviso to subarticle (8) thereof, there shall
be substituted the following
"Provided that with effect from 1 January
2011 and up to 31 December 2014, as regards
dividends paid by a company which was an
international trading company as at 31 December
2010
(i)
the provisions of this subarticle
shall continue to apply after 31 December
2010 with respect to the distribution of
profits earned by such company while it
was an international trading company, and
(ii) the conditions set out in
paragraphs (a) and (b) above shall not
apply in respect of such dividends paid to
any recipient shareholder who is registered
for the purpose of article 48(4) or article
48(4A) of the Income Tax Management
Act.";
(b) in paragraph (b) of subarticle (10) thereof, for the
words "under article 4(1)(a) and (b)" there shall be substituted
the words "under articles 4 or 5";
(c)
in paragraph (a)(ii) of subarticle (11) thereof, for the
words "under article 4(1)(a) and (b)" there shall be substituted
the words "under articles 4 or 5";
(d) for subarticle (13) thereof there shall be substituted
by the following
"(13) (a) The tax upon the chargeable income of
any person referred to as a Contractor in article 23 shall be
levied at the rate of 35 cents (€0.35) on every euro of the
chargeable income in so far as such income is to be
computed in accordance with the provisions of the said
article 23(1) and (2). Other income arising to a Contractor
shall be charged at the appropriate rate or rates.
(b) The rate at which tax shall be withheld by a
Contractor from payments made to a sub-contractor in
accordance with the provisions of article 23(5) shall be at
10 cents (€0.10) of every euro of the payments made as
aforesaid.";
(e)
subarticles (14), (15) and (16) thereof shall be
deleted;
(f)
for subarticle (20) thereof, there shall be substituted
the following
"(20) (a) Where a member of a company
resident in Malta is a resident of a State or
territory with which Malta has made an
arrangement under the provisions of this Act for
the grant of relief from double taxation, and
under that arrangement a dividend, or part
thereof, distributed by such a company is subject
to income tax in Malta at a rate lower than that
chargeable on the income out of which the
dividend is distributed, such company shall be
entitled to require that the gains or profits, or part
thereof, derived by it from its trade or business
for the year of assessment 2001 and for
subsequent years of assessment and which are
distributable by way of dividend subject to tax at
a lower rate as aforesaid shall, notwithstanding
that the dividend, or part thereof has not been
distributed, be taxed at the said reduced rate and
not at the rate properly chargeable under this Act
on the gains or profits of the company
Provided that the provisions of this
paragraph shall only be applicable with respect
to companies which do not sell by retail and a
person shall be deemed not to sell by retail if its
sales of goods or services are made to
(i)
a person who carries on a trade,
business, profession or vocation and the
goods or services so sold to such person are
either resold by such person or are used by
such person for the purpose of his trade,
business, profession or vocation; or
(ii) a person, other than an
individual, who uses those goods for the
purposes of an undertaking carried on by
such person
Provided further that where a company has
opted to be taxed at a reduced rate of income tax
as provided by this paragraph, no person in
receipt of a dividend paid by such company out
of profits which have been subject to tax at such
reduced rate of tax shall be entitled to claim a
refund under the provisions of the Income Tax
Acts in respect of that dividend other than a
refund in terms of article 48(4A) of the Income
Tax Management Act
Provided also that where a company has
opted to be taxed at a reduced rate of income tax
as provided by this paragraph and such company
distributes gains or profits derived by it from its
trade or business which have been subject to tax
at the rate properly chargeable under this Act to
the member resident in the said state or territory,
such member shall not be entitled to claim a
refund under the provisions of the Income Tax
Acts in respect of any dividend paid by such
company out of the said gains or profits
Provided also that where a company has
opted to be taxed at a reduced rate of income tax
as provided by this paragraph and such company
distributes gains or profits derived by it from its
trade or business which have been subject to tax
at such reduced rate of tax to any person not
entitled to a reduced rate of tax under any
arrangement as aforesaid, such gains or profits
shall be taxed at a rate being the difference
between the rate referred to in article 56(6) and
the rate actually applied and such tax shall be tax
payable by the company in the year of
assessment in which such profits are distributed.
(b) Where the provisions of paragraph (a)
have been applied and subsequently there is a
change in the shareholding of the company in
consequence of which the new shareholders will
not be entitled to a reduced rate of tax under any
arrangement as aforesaid or if so entitled the rate
applicable in such arrangement is more than the
rate applicable to the outgoing shareholder, then
any profits which have been subject to tax at
such lower rate as aforesaid and which have not
been distributed at the end of the last financial
year of the company preceding the date of
change in shareholding less any of such profits
distributed to the outgoing shareholder in the
current financial year shall be taxed at a rate
being the difference between the rate of tax
which would be applicable had the new
shareholder held the shares when such profits
were earned, and the rate actually applied, and
such tax shall be a tax payable by the company in
the year of assessment in which such profits are
distributed
Provided that where a member of a
company is also a company incorporated under
Maltese law, the provisions of this article shall
apply to the same extent as if the members of the
latter company had owned the shares directly in
the company.
(c) The provisions of this subarticle shall
apply where a member of a company resident in
Malta is a resident of a State or territory with
which Malta has made an arrangement under the
provisions of this Act for the grant of relief from
double taxation, and under that arrangement the
said company is entitled to require that the gains
or profits, or part thereof, derived by it and which
are distributable by way of dividend, be subject
to tax at a lower rate as aforesaid,
notwithstanding that the dividend, or part thereof
has not been distributed."; and
(g)
subarticle (21) thereof shall be amended as follows
(i) in the first paragraph thereof, the words " who
for the purposes of this subarticle, is not deemed to be
ordinarily resident in Malta" shall be deleted; and
(ii) in sub-paragraph (i) of paragraph (c) of the
proviso thereto, the words "an individual is to be deemed
as being not ordinarily resident in Malta and under which"
shall be deleted.
21. In paragraph (a) of subarticle (1) of article 59 of the
principal Act, the words "and other than a dividend referred to in
article 12(1)(p)" shall be deleted.
22. Subarticle (5) of article 68 of the principal Act shall be
substituted by the following new subarticle
"(5) When any person is registered in
terms of article 48(4A) of the Income Tax
Management Act for the purposes of claiming a
refund of tax chargeable on a company and that
company has any profits allocated to its Maltese
Taxed Account or its foreign income account the
whole or part of which are actually distributed or
deemed to be distributed under any provision of
the Income Tax Acts, such person who is so
registered shall be deemed to have received,
whether upon an actual distribution or deemed
distribution as aforesaid, so much of such profits
from each such account as corresponds to his
percentage entitlement to participate in a
distribution of profits of the said company. Any
provisions in the memorandum and articles of
association of the company or in any agreement
which provide that a shareholder, who is so
registered, shall be entitled to be paid dividends
solely or mainly from the Maltese Taxed
Account or the foreign income account shall be
disregarded for the purpose of the Income Tax
Acts
Provided that where profits have been
subject to tax at a rate pursuant to article 15 of
the Business Promotion Act or article 56(20) of
this Act, the provisions of this subarticle shall
not apply as regards such profits and unless the
shares (including any shares substituting the
original shares resulting from any share
exchange or reorganisation) which gave rise to
the entitlement that such profits be taxed in
accordance with the aforementioned articles are
no longer in existence, such profits shall be
distributable only to the person in respect of
whom the aforementioned articles were
applicable or to any other person who acquired
the shares from such person.".
23. Article 76 of the principal Act shall be amended as Amendment of
article 76 of the
principal Act.
(a)
subarticle (1) thereof shall be substituted by the
following
"(1) If the Minister responsible for finance by
order declares that arrangements specified in the order
have been made with the Government of any territory
outside Malta with a view to -
(a) affording relief from double
taxation in relation to income tax and any tax of
a similar character imposed by the laws of that
territory;
(b)
preventing fiscal evasion;
(c)
giving assistance in the collection
of tax;
and that it is expedient that those arrangements should
have effect, the arrangements shall have effect
notwithstanding anything in this or any other enactment.";
and
(b) subarticle (4) thereof shall be substituted by the
following
"(4) The Minister responsible for finance may
make rules for carrying out the provisions of any
arrangements having effect under this article. In particular,
with regard to arrangements for the prevention of fiscal
evasion, rules may be made in relation to -
(a) the
availability
of
applicable
information;
(b) the
access
to
applicable
information;
(c) the mechanism of exchange of
information;
(d) appropriate rights and safeguards;
and enforcement provisions (including
applicable penalties).".
24. For subarticle (7) of article 89 of the principal Act, there
shall be substituted the following
"(7) The provisions of this article shall not apply in the
case of gains or profits referred to in article 23.".
PART III
25. This Part amends the Financial Administration and Audit
Act and it shall be read and construed as one with the Financial
Administration and Audit Act, hereinafter in this Part referred to as
"the principal Act".
26. Article 13 of the principal Act shall be renumbered as
subarticle (1) thereof, and immediately thereafter there shall be added
the following new subarticle
"(2) The Minister may delegate his authority to authorise
an accounting officer to open any public or official account in
any bank in accordance with subarticle (1) to any public officer
not below the rank of Director General.".
PART IV
27. This Part amends the Social Security Act and it shall be
read and construed as one with the Social Security Act, hereinafter in
this Part referred to as "the principal Act ".
28. In article 2 of the principal Act, the definition "Service
Pension" shall be amended as follows
(a)
paragraph (vii) thereof shall be renumbered as
paragraph (viii);
(b) in paragraph (vi) thereof, for the words "another
€200; and" there shall be substituted the words "another two
hundred euro (€200);"; and
(c)
immediately after paragraph (vi) thereof, there shall
be added the following new paragraph
"(vii) with effect from the 1st January 2011, for the
purposes of calculating the rate of a pension under this
Act, a service pension net of another two hundred euro
(€200); and ".
29. Immediately after subarticle (6) of article 17 of the Amendment of
article 17 of the
principal Act, there shall be inserted the following new subarticle
principal Act.
"(7) For the purposes of this article, insofar as
contributions are concerned, any Class Two contributions paid
by an insured part-time female self-occupied person in any
contribution year after the 3rd January 2011 at a rate which is
below the maximum rate for category SA established in Part III
of the Tenth Schedule, shall be multiplied
(a) by the proportion of the actual total value of
pro-rata SA contributions paid by the part-time self-
occupied person during a contribution year, in accordance
with Part III in the Tenth Schedule to this Act, bears to the
full value of contributions that would have been due under
the provisions of this Act during the said contribution year,
had the self-occupied person concerned not opted to pay a
pro-rata contribution according to the Tenth Schedule to
this Act; and
(b) for the purposes of determining entitlement to
any benefit, pension, grant or allowance, by the resulting
number of such weighted contributions for that
contribution year as calculated in terms of paragraph (a) of
this subarticle, and shall be considered as the actual
number of contributions paid by and in respect of the self-
occupied person during the said contribution year for such
benefit, pension, grant or allowance under this Act.".
30. Immediately after article 2 of Part VI of the Second Amendment of
Schedule to the principal Act, there shall be added the following new the
Schedule to the
principal Act.
"3. In calculating the income or privilege
which is, or could be received or enjoyed by any
member of the household as aforesaid in this Part
no account shall be taken of the income or part
thereof of the wife of a head of household from a
gainful activity
Provided that during the period in respect
of which such income is due, the sum to be
ignored shall in no case exceed an amount
equivalent to the difference between the national
minimum wage as is applicable to persons of 18
years of age or over established by a national
standard order issued under the Employment and
Industrial Relations Act and the scale rate as
applicable to a household of two persons, as
determined by Part I of the Sixth Schedule to this
Act.".
PART V
31. (1) This Part of this Act amends the Duty on Documents
and Transfers Act and it shall be read and construed as one with the
Duty on Documents and Transfers Act, hereinafter in this Part
referred as "the principal Act".
(2) The provisions of article 40 shall be deemed to have come
into force on the 1st January, 2011.
32. Article 2 of the principal Act shall be amended as follows
(a)
for the definition "body of persons" there shall be
substituted the following
" "body of persons" includes any company,
partnership, fellowship, society of persons, or other
association of persons, whether corporate or unincorporate,
and whether vested with legal personality or not;"; and
(b) immediately after the definition "Commissioner"
there shall be added the following new definition
" "company" has the same meaning
assigned to it in article 2(1) of the Income Tax
Act;
(c)
immediately after the definition "Minister" there
shall be added the following new definition
" "partnership" means
(a)
any partnership constituted
under the Companies Act or under the
Commercial Partnerships Ordinance, being
either a commercial partnership en nom
collectif or commercial partnership en
commandite the capital of which is not
divided into shares or any other partnership
having a legal personality distinct from that
of its members constituted, incorporated or
registered under any other law in force in
Malta;
(b) any
body
of
persons
constituted, incorporated or registered
outside Malta, and of a nature similar to the
aforesaid partnerships; and"; and
(d) in the definition "transfer" immediately after the
words "in accordance with the provisions of article 42B of this
Act," there shall be added the words "and for the avoidance of
doubt includes any transfer of an asset by a company to its
shareholders, or by a partnership to its members, in the course
of winding up the company or partnership or in the course of a
distribution of assets to its shareholders or members pursuant to
a scheme of distribution,".
33. In subarticle (1) of article 16 of the principal Act, for the Amendment of
words "and the provisions of article 466 of the Code of Organization article
principal Act.
and Civil Procedure" there shall be substituted the words "and the
provisions of article 60A of this Act".
34. Immediately after paragraph (b) of subarticle (6) of article Amendment of
32 of the principal Act, there shall be added the following new article
principal Act.
paragraph
"(c) Notwithstanding the foregoing provisions of this
article, no duty shall be chargeable on a transfer of immovable
property by a company to its shareholder in the course of
winding up or in the course of a distribution of assets pursuant
to a scheme of distribution, where the said shareholder is an
individual or his spouse who owns or own all of the share
capital (disregarding the holding of one share having no
preferential rights) of the said company transferring the
property as aforesaid and the Commissioner issues a certificate
attesting that he is satisfied that the requirements and conditions
under this paragraph are fulfilled
Provided that this paragraph shall only apply and the
Commissioner shall only issue a certificate, where all the
following conditions have been satisfied
(i) the said shareholder held all of the share
capital (disregarding the holding of one share having no
preferential rights) of the company transferring the said
immovable property for a period exceeding five years
immediately preceding the date of the transfer of the
property as aforesaid;
(ii) the said immovable property consists of one
transferable unit, being either a dwelling house, garage,
shop, office, store or warehouse;
(iii) the said immovable property is held as a
capital asset by the company and has been so held for a
period exceeding five years immediately preceding the
date of the transfer of the property as aforesaid.".
35. Article 42 of the principal Act shall be amended as
(a)
paragraph (a) of subarticle (1) thereof shall be
substituted by the following
"(a) on every transfer inter vivos, whether
executed in Malta or outside Malta, of foreign
marketable securities held in a property company
as defined in article 2(1) of the Income Tax Act
made to, or by any person resident in Malta and
on every document whereby any foreign
marketable security is transferred inter vivos to,
or by any person resident in Malta
Provided that where the marketable
securities in question are not held in a property
company as defined in article 2(1) of the Income
Tax Act, no duty shall be chargeable where such
transfer is effected through a local bank or
through a person holding an investment services
licence under the Investment Services Act. For
the purpose of this proviso, the provisos to the
said definition of "property company" in article
2(1) shall not apply;"; and
(b) for the second proviso to paragraph (b) of subarticle
(1) thereof, there shall be substituted the following
"Provided further that where any company
referred to in the immediately preceding proviso
is a "property company", the immediately
preceding proviso shall only apply where the
individual, direct or indirect, beneficial owners
of the companies referred to in the said proviso
are the same and each such individual holds,
directly or indirectly, substantially the same
percentage interest in the nominal share capital
and voting rights in each of the said companies
both before and after the transfer or exchange, as
the case may be. The provisions of article
32(6)(b) shall apply mutatis mutandis for the
purpose of making such determination.
For the purpose of this proviso "property
company" shall have the same meaning assigned
to it in article 2(1) of the Income Tax Act but the
provisos to the said definition shall not apply.".
36. Article 42B of the principal Act shall be amended as Amendment of
article 42B of
follows
the principal
Act.
(a)
in paragraph (i) of the proviso thereto, for the words
"or in the proportion in the real value" there shall be substituted
the words "and in the proportion in the real value"; and
(b) in paragraph (v) of the proviso thereto, for the words
"For the purpose of this paragraph "property company" shall
mean a company which owns any immovable property situated
in Malta, or any rights over such property, or a company which
holds, directly or indirectly, shares or interests in a body of
persons which owns any immovable property situated in Malta,
or any rights over such property." there shall be substituted the
words
"For the purpose of this paragraph
"property company" shall have the same
meaning assigned to it in article 2(1) of the
Income Tax Act but the provisos to the said
definition shall not apply.".
37. Immediately after article 42B of the principal Act there Addition of new
article to the
shall be added the following new article
principal Act.
" Duty on
42C. (1) A duty of two euro for every
transfer of an
one hundred euro or part thereof of the amount or
interest in a
value of the consideration or the real value,
partnership.
whichever is the higher, of an interest in a
partnership shall be charged
(a)
on every document whereby an
interest in a partnership, other than in a
foreign partnership, is transferred to or by
any person in Malta;
(b) on a deemed transfer of an
interest in a partnership referred to in
subarticle (3), other than in a foreign
partnership;
(c)
on every notice of the transfer
causa mortis of an interest in a partnership
made in accordance with article 45.
For the purpose of this article a transfer of
an interest in a partnership shall include a
transfer of a full or partial interest and any
alienation of any such full or partial interest in a
partnership and the term "foreign partnership"
shall mean a partnership, which satisfies all of
the following conditions
(i)
it
is
not
a
"property
partnership";
(ii) it does not hold marketable
securities in a company registered in Malta
as defined in article 2 of the Income Tax
Act;
(iii) it
is
not
constituted,
incorporated or registered under the
Companies Act or under the Commercial
Partnerships Ordinance or under any other
law in force in Malta.
For the purpose of this paragraph "property
partnership" shall have the same meaning
assigned to it in article 2(1) of the Income Tax
Act but the provisos to the said definition shall
not apply.
(2) The provisions of article 42(2) shall
apply mutatis mutandis to this article and
references to the term "company", where
applicable, shall be deemed to be references to a
"partnership" and references to "subarticle (1)"
shall be deemed to be references to "subarticle
(1) of article 42C".
(3) Where a person acquires or increases a
partnership share, there shall be a deemed
transfer of an interest in the partnership (to that
partner and from the other partners). "Partnership
share" means the share to which a person is
entitled in the income of the partnership and to
the assets available for distribution on the
winding up of the partnership
Provided that this subarticle shall only
apply where the partnership in question is a
commercial partnership en nom collectif or
commercial partnership en commandite the
capital of which is not divided into shares.
(4) Notwithstanding
the
provisions
contained in this Act, the Minister may make
rules determining the method of calculation of
the amount or value chargeable to duty in
relation to a transfer or deemed transfer of an
interest in a partnership and to prescribe any
matter that may be prescribed in relation to such
transfer.".
38. Article 43 of the principal Act shall be substituted by the Substitution of
article 43 of the
following
principal Act.
" Transfer of
43. (1) Every transfer inter vivos of
marketable
marketable securities or of an interest in a
securities and
partnership executed in Malta shall, under pain
of interests in
partnerships
of nullity, be made in writing.
executed in
Malta or
(2) Where the transfer of any foreign
abroad.
marketable security or of an interest in a
partnership is executed outside Malta upon an
order given directly in Malta by any person, such
person shall give a notice in writing to the
Commissioner of such transfer in such manner
and in such term as may be prescribed
Provided that a notice given as aforesaid
may stipulate that it will apply also to other
transfers of marketable securities and interests in
partnerships executed outside Malta that may be
made in the future by the same person, in which
case that person will not be required to give
notice of such further transfers
Provided further that notice shall not be
given where duty is not chargeable under any of
the provisions of this Act.".
39. Article 45 of the principal Act shall be substituted by the
following
"45. (1) A person to whom an interest in a partnership
registered in Malta or shares in a company registered in Malta,
are transmitted causa mortis (hereinafter in this article referred
to as a "transferee causa mortis") shall not later than such term
after the happening of the transfer causa mortis as may be
prescribed, give notice to the Registrar of Companies.
(2) The notice referred to in subarticle (1) shall contain
such particulars of the person from whom the transfer causa
mortis originates and of the transferee causa mortis, the details
of the shares or interest being the object of the transfer and the
manner in which the shares or interest devolved on the
transferee causa mortis, as may be prescribed.
(3) The Registrar of Companies shall register the notice
referred to in subarticle (1) in a register which shall be open to
public inspection, and which shall be kept and indexed in such
manner as may be prescribed.".
40. Article 47 of the principal Act shall be amended as
follows
(a) in subarticle (9) thereof, for the words "the relevant
conditions and provisions are satisfied." there shall be
substituted the words "the relevant conditions and provisions
are satisfied:" and immediately thereafter there shall be added
the following new proviso
"Provided that any such determination made in
relation to a company which falls under subarticle (3)(c),
shall, in so far as it is valid as at 31st December, 2010, be
considered, as from 1st January, 2011, to be a
determination made in relation to a company which falls
under subarticle (3)(e)."; and
(b) in paragraph (a) of subarticle (10) thereof for the
words "company the assets of which consist wholly or
principally of immovable property situated in Malta" there shall
be substituted the words " "property company" as defined in
article 2(1) of the Income Tax Act".
41. Article 48 of the principal Act shall be substituted by the Substitution of
article 48 of the
following
principal Act.
" Penalty for
Save as otherwise provided in this Act
contravening
any person who fails to comply with any of the
articles 32, 33,
provisions of articles 32, 33, 39, 40, 41, 42, 42B,
39 to 43, 45
and 46.
42C, 43, 45 or 46 shall be liable to a penalty of
not less than twenty-three euro (€23) but not
exceeding one thousand, one hundred and sixty
euro (€1,160) for each omission.".
42. In subarticle (5) of article 52 of the principal Act, for the Amendment of
words "within six years" in the proviso thereto, there shall be article
principal Act.
substituted the words "within four years".
43. In subarticle (3) of article 56 of the principal Act, for the Amendment of
words "as desired by such person." there shall be substituted the article
principal Act.
words "as desired by such person within three years from the date of
receipt of the aforementioned notice of objection.".
44. Immediately after article 60 of the principal Act, there Addition of new
articles to the
shall be added the following new articles
principal Act.
" Executive
(1) An assessment which is final
title.
and conclusive in accordance with article 60 of
this Act shall be an executive title within the
meaning and for the purposes of Title VII of Part
I of Book Second of the Code of Organisation
and Civil Procedure.
(2) If duty and, or additional duty and, or
interest is not paid as prescribed in this Act, the
Commissioner shall serve a demand note upon
the person liable for the payment, and if payment
is not made within fifteen days from the date of
the service of such demand note, the
Commissioner may enforce payment in virtue of
the executive title referred to in subarticle (1),
after two days from the service of an intimation
for payment made by means of a judicial act.
Limitation of
(1) Save as otherwise expressly
action for
provided in this Act, no action for payment of
payment of
duty.
duty and, or additional duty and, or interest may
be taken after the lapse of five years from the
date on which the relative assessment becomes
final and conclusive.
(2) The running period of prescription
specified in this article shall be interrupted by
any judicial act filed before the expiration of
such period by the Commissioner whereby any
payment of duty is claimed.".
45. In subarticle (1) of article 61 of the principal Act, for the
words "last known business or private address." there shall be
substituted the words "last known business or private address:", and
immediately thereafter there shall be added the following new
proviso
"Provided that where such notice is not made because the
taxpayer could not be found or for other reasons attributable to
him and the Commissioner publishes a notice in the Gazette and
in one or more daily newspapers stating that a notice has been
made and inviting the taxpayer to call for it at the Department,
then such notice shall also be deemed to have been duly
notified.".
PART VI
46. (1) This Part of this Act amends the Motor Vehicles
Registration and Licensing Act and it shall be read and construed as
one with the Motor Vehicles Registration and Licensing Act,
hereinafter in this Part referred as "the principal Act".
(2) The provisions of this Part shall be deemed to have come
into force on the 1st January, 2011.
47. Article 2 of the principal Act shall be amended as follows
(a)
for the definition "brought into Malta" there shall be
substituted the following
" "brought into Malta" means the entry into Malta
of a motor vehicle coming from -
(a)
a Member State,
(b)
the Channel Islands (Guernsey and
Jersey),
(c)
the Isle of Man,
(d)
Monaco,
(e)
Andorra, or
(f)
San Marino
and which was put into free circulation in such Member
State, or in the Channel Islands, or in the Isle of Man, or in
Monaco, or in Andorra, or in San Marino, as the case may
be, prior to entry into Malta;";
(b) immediately after the definition "circulation licence
fee" there shall be added the following new definition
" "circulation permit" means the permit issued
annually by the Authority in terms of the provisions of the
provisos to item 6 of the Fourth Schedule;";
(c)
immediately after the definition "Council
Regulation (EEC) No 684/92" there shall be added the
following new definition
" "depreciation" means, for the purpose of this Act,
the reduction in value of a motor vehicle resulting from use
and obsolescence. Depreciation is calculated from the
vehicle’s date of first registration and allows for the
original value of the vehicle to be modified for the
purposes of tax deduction;";
(d) for the definition "Euro 2", "Euro 3", "Euro 4 and
over", "Euro II", "Euro III", and "Euro IV and over" there shall
be substituted the following
" "Euro 2", "Euro 3", "Euro 4", "Euro 5", "Euro 6",
"Euro II", "Euro III", "Euro IV", "Euro V" and "Euro VI"
mean the emission standards set for all motor vehicles
under Directive 70/220/EEC, Directive 88/77/EEC,
Directive 1999/96/ EC, Directive 2005/55/EC, Regulation
(EC) No 715/2007 and Regulation 595/ 2009;";
(e)
immediately after the definition "invoice" there shall
be added the following new definition
" "Latest Euro Standard" means and corresponds to
the dates set out in the current EU Directives and
Regulations establishing emission limits for the
registration of new motor vehicles;";
(f)
immediately after the definition "registration tax"
there shall be added the following new definition
" "Regulation (EC) No 715/2007" means
Regulation (EC) No 715/2007 of the European Parliament
and of the Council on type approval of motor vehicles with
respect to emissions from light passenger and commercial
vehicles (Euro 5 and Euro 6) and on access to vehicle
repair and maintenance information;"; and
(g) in the definition "special purpose vehicle", for the
words "and comprising those listed in the First Schedule" there
shall be substituted the words "and classified under the First
Schedule".
48. In the Maltese version of subarticle (2) of article 9 of the
principal Act, for the words "Il-valur ta’ reāistrazzjoni ta’ vettura bil-
mutur fil-kategorija M1 ādida, motor cycle, quad bike," there shall be
substituted the words "Il-valur ta’ reāistrazzjoni ta’ vettura bil-mutur
uŜata fil-kategorija M1, motor cycle, quad bike;".
49. Article 19 of the principal Act shall be amended as
(a)
immediately after paragraph (c) of subarticle (2)
thereof, there shall be added the following new paragraph
"(d) The Minister responsible for finance may
delegate his authority to any person to put into effect the
exemption under subarticle (2)(a)."; and
(b) for the proviso to subarticle (3)(i) thereof, there shall
be substituted the following
"Provided that the vehicle has been registered in
the name of that person or in the name of his or her spouse
for at least twenty-four consecutive months at the time of
transfer of residence to Malta and that person has been
residing outside Malta for a continuous period of at least
twenty-four months at the time of transfer of residence to
Malta
Provided further that where a motor vehicle is
brought or imported into Malta not more than six months
before the time of transfer of residence by the person
transferring his residence, that vehicle shall qualify for the
exemption if both the said vehicle and the person
transferring his residence meet the conditions prescribed in
regulations made under this Act
Provided further that that person shall not have
been granted an exemption from registration tax in respect
of another motor vehicle in the previous eight years;".
50. Article 24 of the principal Act shall be amended as Amendment of
article 24 of the
principal Act.
(a) in the marginal note thereto for the words "in 2008
and in 2009" there shall be substituted the words "in 2010";
(b)
subarticles (1), (2) and (3) thereof shall be deleted;
and
(c) subarticle (4) thereof shall be renumbered as the
whole article and shall be amended as follows
(i) in sub-paragraph (ii) of paragraph (a) thereof,
for the words "December 2011:" there shall be substituted
the words "December, 2011." and the proviso thereto shall
be deleted;
(ii) paragraphs (b) to (f) thereof shall be
renumbered as paragraphs (c) to (g);
(iii) immediately after paragraph (a) thereof, there
shall be inserted the following new paragraph
"(b) An authorised motor vehicle importer
or motor dealer who by the 25th October, 2010, has
had in stock or had ordered motor vehicles other
than M1 vehicles or motor cycles, and who had
delivered a list of the said vehicles to the Authority
before the 24th January, 2011 -
(i) shall be deemed to have
registered the said vehicles prior to the 1st
January, 2011, unless the authorised motor
vehicle importer or dealer decides otherwise;
and
(ii) shall pay the registration tax
thereof by the 31st December, 2011
Provided that where it results to the
Authority that a motor vehicle which is on the list
notified to it by an authorised motor vehicle
importer or motor vehicle dealer, in terms of the
provisions of this paragraph and of paragraph (a) of
this article, was not so ordered or was not in stock,
the Authority shall consider the said motor vehicle
not registered in terms of this article.";
(iv) in paragraph (c) thereof, as renumbered, for
the words "1st January, 2010" there shall be substituted the
words "1st January, 2011";
(v) in paragraph (d) thereof, as renumbered, for
the words "9th November" there shall be substituted the
words "25th October, 2010", and for the words "31st
December, 2009", wherever they appear, there shall be
substituted the words "31st December, 2010"; and
(vi) in paragraph (g) thereof, as renumbered, for
the words "9th November, 2009" there shall be inserted the
words "25th October, 2010", for the words "1st January,
2010", wherever they appear, there shall be substituted the
words "1st January, 2011", and for the words "31st
October, 2010" there shall be substituted the words "24th
January, 2011".
51. For Category A of the First Schedule to the principal Act,
there shall be substituted the following
"Category A: N1, N2 and N3 vehicles, special purpose vehicles,
tractor units and light weight three-wheeled vehicles having the
characteristic of a motor vehicle
N1 vehicles, special purpose vehicles, tractor units and light
weight three-wheeled vehicles having the characteristic of a motor
Latest Euro standard
vehicles with a maximum authorised mass of up
to 1,305 kg
Kg x 0.40 + cc x 0.45 x €1
v eh icl es wi t h a m axi m um au th or i sed m as s
exceeding 1,305 kg up to 1,760 kg
Kg x 0.45 + cc x 0.50 x €1
v eh icl es wi t h a m axi m um au th or i sed m as s
exceeding 1,760 kg up to 3,500 kg
Kg x 0.50 + cc x 0.55 x €1
Latest Euro standard -1
vehicles with a maximum authorised mass of up
to 1,305 kg
Kg x 1.00 + cc x 1.10 x €1
v eh ic le s w it h a m ax im u m au t ho ri sed ma ss
exceeding 1,305 kg up to 1,760 kg
Kg x 1.10 + cc x 1.20 x €1
v eh ic le s w it h a m ax im u m au t ho ri sed ma ss
exceeding 1,760 kg up to 3,500 kg
Kg x 1.20 + cc x 1.30 x €1
Latest Euro standard -2
vehicles with a maximum authorised mass of up
to 1,305 kg
Kg x 6.00 + cc x 6.00 x €1
v ehi cle s wi th a m axi mu m au tho r ised m ass
exceeding 1,305 kg up to 1,760 kg
Kg x 7.00 + cc x 7.00 x €1
v eh ic le s w it h a m ax im u m au t ho ri sed ma ss
exceeding 1,760 kg up to 3,500 kg
Kg x 8.00 + cc x 8.00 x €1
Latest Euro standard -3 and older
vehicles with a maximum authorised mass of up
to 1,305 kg
Kg x 25.00 + cc x 25.00 x €1
v ehi cle s wi th a m axi mu m au tho r ised m ass
exceeding 1,305 kg up to 1,760 kg
Kg x 27.00 + cc x 27.00 x €1
v eh ic le s w it h a m ax im u m au t ho ri sed ma ss
exceeding 1,760 kg up to 3,500 kg
Kg x 30.00 + cc x 30.00 x €1
N2 vehicles, special purpose vehicles and tractor units
Latest Euro standard and Latest Euro standard -1
vehicles with a maximum authorised mass
exceeding 3,500 kg up to 12,000 kg
Latest Euro standard -2
vehicles with a maximum authorised mass
exceeding 3,500 kg up to 12,000 kg
Kg x 5.00 + cc x 7.00 x €1
Latest Euro standard -3 and older
vehicles with a maximum authorised mass
exceeding 3,500 kg up to 12,000 kg
Kg x 12.00 + cc x 15.00 x €1
N3 vehicles, special purpose vehicles and tractor units
Latest Euro standard and Latest Euro standard -1
vehicles with a maximum authorised mass
exceeding 12,000
Latest Euro standard -2
vehicles with a maximum authorised mass
exceeding 12,000 kg up to 25,000 kg
Kg x 2.10 + cc x 2.50 x €1
vehicles with a maximum authorised mass
exceeding 25,000 kg
Kg x 2.70 + cc x 3.50 x €1
Latest Euro standard -3 and older
vehicles with a maximum authorised mass
exceeding 12,000 kg up to 25,000 kg
Kg x 9.00 + cc x 12.00 x €1
vehicles with a maximum authorised mass
exceeding 25,000 kg
Kg x 10.00 + cc x 13.00 x €1
Tax rate formula
Following the application of the relevant tables under the
heading, the total amount of the registration tax shall be equal to the
sum total of the maximum authorised mass (kg) of a motor vehicle
multiplied by the factor indicated plus the cubic capacity (cc) of the
engine of a motor vehicle multiplied by the factor indicated multiplied
by €1 and, in respect of used vehicles, this sum shall be multiplied by
the difference between 100% and the aggregate percentage consisting
of the percentage of the total annual depreciation as specified in the
table hereunder plus 0.5% for each 10,000 kms showing on a vehicle’s
odometer
{[(kg x Y) + (cc x Y)] x €1} x {100% - [Y% of total annual
depreciation + 0.5% for each 10,000 kms]}
Provided that the maximum depreciated value of a motor
vehicle in this category shall not exceed 95%, and once this value is
reached there shall be no further reductions.
Depreciation according to year of first registration of vehicle
Year
Annual Depreciation
Total Depreciation
12%
12%
14%
26%
19%
45%
5%
50%
4 onwards
5%
55%
5%
60%
5%
65%
5%
70%
5%
75%
5%
80%
5%
85%
5%
90%
5%
95%
13 onward
N/A
95%
For the purpose of registration tax, where a vehicle used for the
transport of goods (N1, N2 and N3), or a special purpose vehicle or a
tractor unit, whose year of manufacture falls under any of the following
years of manufacture, is not accompanied by a certificate showing the
emission levels equivalent to Euro standards, the registration tax rates
to be paid thereon shall be equivalent to those under the different Euro
standards
Up to and including
Euro 3 / III Euro 4 / IV Euro 5 / V
Euro 6 / VI
Category
Euro 2 / II
Up to and including
2001 to
2006 to
2011 to
from 2015
year 2000
Up to and including
2001 to
2006 to
2009 to
from 2014
year 2000
Up to and including
2001 to
2006 to
2009 to
from 2014
year 2000
Where an importer or dealer or owner of a motor vehicle provides
a certificate as approved by an accredited technical service established
within a Member State, that the engine of that particular vehicle meets
lower emissions despite the vehicle’s year of manufacture, that vehicle
shall on registration be taxed the rate pertaining to its equivalent Euro
standard.".
52. The Second Schedule to the principal Act shall be amended Amendment of
the Second
as follows
Schedule to the
principal Act.
(a) in the heading thereof, for the words "quadricycles
and motor cycles (including electric and hybrid electric motor
vehicles)" there shall be substituted the words "quadricycles,
motor cycles and quad bikes (including electric and hybrid
electric motor vehicles)";
(b) for the words "Category A: M1 motor vehicles
(including vehicles to be registered to be used as taxicars, self-
drive vehicles and chauffeur driven vehicles), motor cycles,
quadricycles and quad bikes, whether new or used:" there shall
be substituted the words "Category A: M1 motor vehicles
(including vehicles to be registered to be used as taxicars, self-
drive vehicles and chauffeur driven vehicles), whether new or
used:";
(c)
in paragraph (5) under the heading "Tax Rate
Formula" thereof, for the words "20%" there shall be substituted
the words "30%"; and
(d)
for item 2 of Category F thereof, there shall be
substituted the following
"2. M2 and M3 motor vehicles, including trackless trains and
amphibious motor vehicles
Latest Euro standard -3
Latest Euro
Latest Euro
and older
standard -2
standard and
Latest Euro
standard -1
Kg x 12.00 + cc x
Kg x 1.50 + cc x
15.00 x €1
2.40 x €1
Kg x 10.00 + cc x
Kg x 2.20 + cc x
12.00 x €1
2.60 x €1
In respect of used vehicles, the total amounts of registration tax
reached using any of the above formulas shall be multiplied by the
difference between 100% and the aggregate percentage consisting of
the percentage of the total annual depreciation as specified in the table
titled "Depreciation according to age of vehicle" in Category A of the
First Schedule hereof, plus 0.5% for each 10,000 kms showing on a
vehicle’s odometer.
For the purpose of registration tax, where an M2 or M3 vehicle,
whose year of manufacture falls under any of the following years of
manufacture, is not accompanied by a certificate showing the emission
levels equivalent to Euro standards, the registration tax rates to be paid
thereon shall be equivalent to those under the following different Euro
standards
Up to and including Euro II
Euro III
Euro IV and over
Up to and including year 2000
2001 to 2005
2006 onwards
Up to and including year 2000
2001 to 2005
2006 onwards
Where an importer or dealer or owner of a motor vehicle provides
a certificate as approved by an accredited technical service established
within a Member State, that the engine of that particular vehicle meets
lower emissions despite the vehicle’s year of manufacture, that vehicle
shall on registration be taxed the rate pertaining to its equivalent Euro
standard.";
(e)
for Category G thereof there shall be substituted the
following
"Category G: other motor vehicles
Rate of Tax
Percentage of RV
0%
1. Ambulances, whether new or used .....
0%
2. Motor vehicles, go-karts, quad bikes
and motor cycles not to be used on the
road other than in authorised races
only, whether new or used ..................
0%
3. Caravans, and motor homes, whether
new or used ........................................
50%
4. Motor hearses (new only) ...................
30%"; and
(f)
in category H thereof, for the words "M1 vehicles",
wherever they appear, there shall be substituted the words "M
vehicles".
53. The Fourth Schedule to the principal Act shall be amended Amendment of
the Fourth
as follows
Schedule to the
principal Act.
(a)
in item 6 thereof, for the words "M1 motor vehicles"
there shall be substituted the words "category M motor
vehicles", for the words "(vi) more than 2000cc
..................................... 204" there shall be substituted the
words "(vi) more than 2000cc ..................................... 204:" and
immediately thereafter there shall be added the following
provisos
"Provided that a person who has more than one
such vehicle registered in his name, may opt to have those
vehicles covered by one or more circulation permits. The
fee for a permit covering a joint number of vehicles shall
be equivalent to the highest annual circulation licence
payable on each of those vehicles covered by that permit.
Each such group of vehicles may additionally be covered
by a subsequent permit or permits the fee of which shall be
equivalent to the next highest annual circulation licence
payable for those vehicles. An administrative fee of €8
shall be payable to the Authority for each of the other
vehicles covered by the permit
Provided further that no person may at any one
time use on the road more vehicles than what is permitted
by the circulation permit.";
(b) item 7 thereof shall be renumbered as sub-item (a)
and immediately thereafter there shall be added the following
new sub-item
"(b) the provisions of the provisos to item 6 shall
mutatis mutandis apply to motor vehicles classified under
this item.";
(c)
item 8 thereof shall be renumbered as sub-item (a)
and immediately thereafter there shall be inserted the following
new sub-item
"(b) the provisions of the provisos to item 6 shall
mutatis mutandis apply to motor vehicles classified under
this item."; and
(d) in item 16 thereof, for the figure "€0" there shall be
substituted the figure "€10".
PART VII
54. (1) This Part of this Act amends the Income Tax
Management Act and it shall be read and construed as one with the
Income Tax Management Act, hereinafter in this Part referred as "the
principal Act".
(2) The provisions of article 63 shall be deemed to have come
into force on the 1st January, 2011.
55. In subarticle (3) of article 5 of the principal Act, for the
words "Trusts and Trustees Act, or is licensed under" there shall be
substituted the words "Trusts and Trustees Act, a central securities
depository authorised under article 24 of the Financial Markets Act or
is licensed under".
56. In subarticle (4) of article 10 of the principal Act, for the
words "company resident in Malta" there shall be substituted the
words "company registered in Malta".
57. Article 14 of the principal Act shall be amended as
follows
(a)
the present provisions thereof shall be renumbered
as subarticle (1); and
(b) immediately after subarticle (1) as renumbered,
there shall be added the following new subarticles
"(2) Notwithstanding any provision of the
Income Tax Acts or any other law the
Commissioner may, for the purpose of obtaining
full information in respect of any person’s
income, give notice in writing to such person
requiring him to furnish the Commissioner
within the time indicated in such notice, not
being less than thirty days from the date of
service of such notice, a statement containing
particulars of -
(a)
all property held in his own
name or in the name of his spouse, minor
children or dependents, or in any other
name, in which he is or has been interested
or has or has had a beneficial interest, or in
respect of which he has or has had the
power to operate or dispose, jointly or
solely, in his own economic interest and
which property is in existence or which has
existed at any time during the period stated
in the notice;
(b) all income derived from the
property referred to in paragraph (a);
(c)
all other property wherever
situated not referred to in paragraph (a) and
the income derived therefrom;
(d) any property transferred or
delivered by him to, or which is currently
held by, any person, including a designated
person referred to in subarticle (3), during
the period or periods specified in such
notice; and
(e)
all facts bearing upon his
liability to income tax which he is, or has
been, liable to.
(3) (a)
Where, subsequent to a request
for information made in accordance with the
provisions of subarticles (1) and (2), the
Commissioner has reasonable grounds to suspect
that tax has been, is, or may be evaded by any
person, he may request, by notice in writing to a
designated person, that the designated person
provide the Commissioner, within the time
indicated in such notice not being less than thirty
days from the date of service of such notice, with
all such information and documentation which
the designated person may have relating to
property of any kind or description, transferred
or delivered to him by that person and owned,
possessed, or held by the designated person
under any title on behalf of or for the benefit of
any such person on the date of the said notice or
during the period specified in such notice not
commencing earlier than five years from the date
of such notice; provided that the designated
person shall not be bound to provide information
to the Commissioner in respect of any
beneficiaries for whose benefit the property may
be held or the terms and conditions under which
it is so held.
(b) Any designated person who receives
such notice shall provide the Commissioner with
the information requested in the notice and this
notwithstanding anything to the contrary in the
Income Tax Acts, any provision of the
Professional Secrecy Act, any obligation of
secrecy or confidentiality, or to any other
restriction relating to the disclosure of
information whether arising from a provision of
law or any agreement or other arrangement.
The Commissioner shall keep confidential
any information provided to him by the
designated person and shall not disclose such
information to any other person except where the
Commissioner is bound at law to effect such
disclosure or where he requires to use such
information in the context of proceedings under
this Act; provided that the Commissioner may
report any act or failure by the designated person
to the relevant regulatory authority which issued
a licence or authorization to such designated
person.
Any information obtained by the
Commissioner shall be used by him solely for the
purpose of the investigation being carried out by
the Commissioner as to whether tax has been, is,
or may be evaded by the relevant person being
investigated and, or any related proceedings
under this Act.
(c) The Commissioner shall specify in a
notice issued under this article what information
he requires and whether with reference to the
property held on the date of the notice and, or at
any point during a period of time (not
commencing earlier than five years from the date
of such notice), and the designated person
receiving the notice shall supply the following
information
(i)
details of any such property
owned, possessed or otherwise held under
any title and which had been transferred or
delivered (whether directly or indirectly
through a transaction or a number of
transactions which the designated person is
aware of) to the designated person or
vested in such designated person by or on
the instructions of the person in respect of
whom notice has been given by the
Commissioner to the designated person in
terms of paragraph (a) of this subarticle;
and
(ii) details of the person or persons
who transferred or delivered or made
arrangements for the designated person to
receive the property or on whose behalf the
property was so transferred delivered or
vested in the designated persons
Provided that this paragraph (c) shall also
apply to any property transferred or delivered to
the designated person and is no longer held by
the designated person or has been converted into
a different form of property or has increased or
decreased in value or extent or has been
transferred to another designated person, but
shall not apply where the property has been held
temporarily for the purpose of a transaction and
has been returned to the person who is being
investigated.
(d) If the designated person in receipt of a
notice -
(i)
has not held any property which
was transferred or delivered (whether
directly or indirectly through a transaction
or a number of transactions which the
designated person is aware of) to the
designated person or vested in such
designated person by the person in respect
of whom notice has been given by the
Commissioner to the designated person in
terms of paragraph (a) of this subarticle; or
(ii) holds or has held the aforesaid
property on a temporary basis or as a
simple administrator; or
(iii) has returned the aforesaid
property to the person in respect of whom
notice has been given by the Commissioner
to the designated person in terms of
paragraph (a) of this subarticle,
he shall inform the Commissioner accordingly
and shall have no further obligations in this
regard unless the Commissioner seeks further
information specifically on such circumstances
in which case the provisions of this article shall
apply mutatis mutandis.
(e) Where a notice has been given by the
Commissioner to a designated person in terms of
paragraph (a) of this subarticle, the
Commissioner shall, within fifteen days of issue
of such notice, inform by a further notice in
writing the person in respect of whom such
notice was given, that he has issued a notice
under this article, and any designated person in
receipt of any such notice may inform his
customer, principal or other person who may
have delivered, settled, donated or otherwise
transferred property to the designated person of
the receipt of such notice and his response
thereto.
Such further notice in writing may be
served on a person either personally or by being
sent by post to his last known business or private
address, and shall in the latter case be deemed to
have been served within three working days from
the date it is sent by post.
(f) For the purposes of this article
(i) "property"
means
property of any kind or description,
whether movable or immovable,
personal or real, and wherever
situated, and in relation to rights and
interests whether vested, contingent,
voidable or future, and including any
money, investments, and amounts in
savings, loan and other bank accounts
(whether fixed, overdraft, current,
deposit, or otherwise, and whether
business or private accounts);
(ii) a designated person is
any person who may be acting as
mandatory, nominee, trustee, agent,
depository, custodian, under a contract
of work or otherwise, and includes
without limitation any of the
following
(A) a person who is in
possession of a valid licence
issued in terms of the Banking
Act; or
(B) a person who is
licensed in terms of the
Investment Services Act; or
(C) a person who is
authorized in terms of the
Insurance Business Act or
enrolled in the Brokers List
under
the
Insurance
Intermediaries Act; or
(D) a person who is
authorised under the Trusts and
Trustees Act to act as a trustee
or as an administrator of any
private foundation; or
(E) advocates,
notaries,
legal procurators, accountants,
auditors and other persons
holding warrants to exercise a
profession,
and irrespective of whether such
person is in actual possession of
authorisations or is exempt from
requiring such authorisations under
any law or is acting in breach of law
when holding such property without
authorisation required to do so by
applicable law;
(iii) owning, possessing and
holding property includes owning,
possessing and holding with others or
through others and, or enjoying a
power to operate or dispose of such
property in such manner as renders
secret the ownership rights or interests
of the person being investigated and
does not include circumstances where
such person remains registered as the
owner of the property in a public
register in Malta or where the
designated person is owning, holding
or possessing the property temporarily
for the purposes of a transaction
relating to or involving such property
or is otherwise a simple administrator
of such property;
(iv) reasonable grounds on
the part of the Commissioner to
suspect that tax has been, is or may be
evaded by any person shall include but
not be limited to the following
(A) a refusal by that
person
to
provide
the
Commissioner
with
any
documentation or information
as may have been requested
from him by the Commissioner
in relation to any property
which he owns, possesses, or
holds at that time through
another
person
including
designated persons, or any
property previously owned,
possessed
or
held
and
subsequently disposed of under
any title whatsoever by such
person at an earlier date;
(B) where a notice in
terms of article 29 is not made
as the taxpayer could not be
found or for other reasons
attributable to the taxpayer, and
in accordance with the said
article 29, the Commissioner
publishes a notice in the
Gazette and in one or more
daily newspapers stating that a
notice has been made and
inviting the taxpayer to call for
it at the Department;
(C) where, after being
requested by the Commissioner
by means of a notice in writing,
such person fails to produce
without any reasonable excuse
any books, records, documents,
accounts, electronic data and a
correct statement referred to in
subarticle (2) within thirty days
from the date of service of such
notice;
(D) such person gives
any false answer, whether
verbally or in writing, to any
question or request for
information asked or made in
accordance with the provisions
of the Income Tax Acts;
(E) such person prepares
or maintains any false books of
account or other records or
falsifies any books of account
or records.
(g) Where a designated person gives any
false, misleading or incorrect information in
relation to a notice issued under this subarticle he
shall be guilty of an offence and shall, on
conviction, be liable to a fine (multa) of not less
than ten thousand euro (€10,000) and not
exceeding
twenty-three
thousand
euro
(€23,000).".
58. In article 17 of the principal Act, for the words "and
subject to article 10A, no request for information shall be made" there
shall be substituted the words "and subject to articles 10A and 14(3),
no request for information shall be made".
59. In subarticle (1) of article 20 of the principal Act, for the
words "to inspect any books, documents, accounts and returns" there
shall be substituted the words "to inspect any books, documents,
accounts, returns and electronic data", and for the words "determining
the said value but shall not have any power under this article to seize
any item or remove it from the premises:" there shall be substituted
the words "determining the said value:".
60. In subarticle (5) of article 23 of the principal Act, for the
words "four hundred and sixty-five euro (€465) for every such
default" there shall be substituted the words "one thousand euro
(€1000) for every such default".
In paragraph (f) of subarticle (1) of article 40 of the
principal Act, for the words "article 46(3):" there shall be substituted
the words "article 46(3);" and immediately thereafter there shall be
added the following new paragraph
"(g)
the notice referred to in article 47A(2):".
Immediately after article 47 of the principal Act, there
shall be added the following new article
" Assistance in
47A. (1) The Commissioner shall lend
the collection
assistance to foreign tax authorities in the
of taxes.
collection of revenue claims in accordance with
the provisions of applicable arrangements
referred to in article 76 of the Income Tax Act
where these exist.
(2) For the purposes of subarticle (1), a
notice by the Commissioner to any person
showing the amount of a revenue claim by a
foreign tax authority to which he is liable for
having failed to pay the said amount shall be
sufficient evidence that the amount shown in the
said notice is the amount due to be paid to the
foreign tax authority by the said person.
(3) For the purposes of this article, the
arrangements in relation to the collection of
taxes shall determine the meaning of "taxes" and
"revenue claims".".
Article 48 of the principal Act shall be amended as Amendment of
article 48 of the
principal Act.
(a)
in subarticle (2F) thereof, for the words "or the first
proviso to subarticle (7)" there shall be substituted the words "or
the provisos to subarticle (7)(a)";
(b)
subarticle (4) thereof shall be amended as follows
(i) in paragraph (c) thereof, the words "and
subarticle (7)" shall be deleted;
(ii) in the proviso to paragraph (c) thereof, for the
words "the expression "Malta tax paid" shall mean" there
shall be substituted the words "the expression "Malta tax
paid" shall, for the purpose of determining the amount of
the refund, mean";
(iii) immediately after the proviso to paragraph (c)
thereof, as amended, there shall be added the following
new proviso
"Provided further that, notwithstanding the
previous proviso, a tax refund payable in terms of
this subarticle shall in no case exceed the amount of
tax actually paid by the company to the
Commissioner on the profits distributed out of the
foreign income account or on any profits derived and
distributed by a company while it was an
international trading company, as the case may be.";
(c)
in sub-paragraph (ii) of paragraph (a) of subarticle
(4A) thereof, for the words "this subarticle." there shall be
substituted the words "this subarticle;" and immediately
thereafter there shall be added the following new sub-
"(iii) which have been subject to tax at a rate
(hereinafter referred to as “the reduced rate”)
lower than that referred to in article 56(6) of the
Income Tax Act the rate of refund shall be
determined in accordance with the following
formula
Y = (R - 5%) / R
Where -
(a)
"Y" represents the rate to be
determined; and
(b) "R" represents the reduced rate:";
(d) in paragraph (a) of subarticle (4A) thereof,
immediately after the proviso thereto, as amended, there shall
be added the following new proviso
"Provided further that, notwithstanding the
provisions of article 42B(2), a tax refund payable in terms
of this subarticle shall in no case exceed the amount of tax
actually paid by the company to the Commissioner on the
profits distributed out of the Maltese taxed account or
foreign income account."; and
(e)
subarticle (7) thereof shall be substituted by the
"(7) (a)
Where a claim for refund has
been made under the provisions of subarticle (4) or
subarticle (4A) in respect of Malta tax paid on
distributed profits as properly shown in the
relevant dividend certificate, no person shall be
entitled to a further refund under those subarticles
or to a refund under any other provisions of the
Income Tax Acts in relation to the Malta tax paid
on such distributed profits
Provided that a person entitled to such refund
as set out under subarticle (4) in respect of profits
distributed by an international trading company
shall also be entitled to a refund of the difference
between the Malta tax paid by the international
trading company and the tax chargeable on such
person on such income in accordance with the
provisions of this Act
Provided further that the provisions of the
immediately preceding proviso shall during the
period 1 January 2011 to 31 December 2014 also
apply in the case of any profits distributed by a
company which was an international trading
company as at 31 December 2010 where such
profits were earned by such company while it was
an international trading company.
(b) Where a claim for refund has been made
under the provisions of subarticle (4) or subarticle
(4A) in respect of Malta tax paid on distributed
profits as properly shown in the relevant dividend
certificate, notwithstanding the provisions of
article 60 of the Income Tax Act, such Malta tax
paid which a company had deducted or is entitled
to deduct under article 59 from such dividend,
shall, when such dividend is included in the
chargeable income of any person, including a
company receiving the said dividend or a person
holding directly or indirectly shares in such
company which receives a dividend out of such
profits, be set off, for the purposes of collection,
only against the tax charged on that dividend.
(c) Where a claim for refund of the Malta
tax paid has been made under subarticle (1) in
respect of Malta tax paid on distributed profits as
properly shown in the relevant dividend certificate,
no person shall be entitled to a further refund under
the provisions of subarticle (4) or subarticle (4A) in
relation to the Malta tax paid on such distributed
profits.".
Subarticle (1) of article 52 of the principal Act shall be Amendment of
amended as follows
(a)
in paragraph (e) thereof, for the words "art or
contrivance,", there shall be substituted the words "art or
contrivance; or";
(b) immediately after paragraph (e) thereof there shall
be added the following new paragraphs
"(f) has in his possession or under his control any
article for use in the course of or in connection with
altering, destroying, erasing or concealing any
information, records or evidence which he knows or is
reasonably expected to know to be relevant for any
purpose of this Act; or
(g) makes, adapts, supplies or offers to supply
any article knowing that it is designed or adapted for use in
the course of or in connection with altering, destroying,
erasing or concealing any information, records or evidence
which he knows or is reasonably expected to know to be
relevant for any purpose of this Act, or intending it to be
used to commit, or assist in the commission of fraud; or
(h) alters, destroys, conceals, covers up, falsifies,
or makes a false entry in any record, document, electronic
data or tangible object,"; and
(c)
immediately after paragraph (h), as added by this
article, for the words "shall be guilty of an offence, and shall for
each such offence be liable on conviction before a Court of
Magistrates sitting as a court of criminal judicature to a fine
(multa) of not less than one hundred and sixteen euro (116) and
not exceeding four hundred and sixty-five euro (465) and, in
addition, to treble the amount of tax to which the person whose
tax liability it was intended to evade or to assist in evading is
liable under the Income Tax Acts for the year of assessment in
respect of or during which the offence was committed, or to
imprisonment for any term not exceeding six months, or to both
such fine and imprisonment.", there shall be substituted the
words
"shall be guilty of an offence, and shall be liable on
conviction before a Court of Magistrates sitting as a court of
criminal judicature -
(i) to a fine (multa) not less than seven hundred
euro (€700) and not exceeding three thousand five hundred
euro (€3,500) in the case of any offence committed under
paragraphs (a) to (d); and
(ii) to a fine (multa) of not less than six thousand
euro (€6,000) and not exceeding ten thousand euro
(€10,000) for an offence committed under paragraphs (e)
to (h),
and, in addition, for each offence as above referred to in
paragraphs (a) to (h), to treble the amount of tax to which the
person whose tax liability it was intended to evade, or to assist
in evading, is liable under the Income Tax Acts for the year of
assessment in respect of or during which the offence was
committed, or to imprisonment for any term not exceeding six
months, or to both such fine and imprisonment.
For the purposes of paragraphs (f) and (g) the term
"article" includes any program or data held in electronic form.".
Article 58 of the principal Act shall be amended as Amendment of
article 58 of the
follows
principal Act.
(a)
paragraph (c) thereof shall be renumbered as
paragraph (d); and
(b) in paragraph (b) thereof, for the words "the said Acts
and regulations; and" there shall be substituted the words "the
said Acts and regulations;", and immediately thereafter there
shall be added the following new paragraph
"(c) for fees to be levied in relation to the
issue of certificates, the processing of
registrations and applications for rulings in
terms of article 52 of the Income Tax Act; and".
PART VIII
(1) This Part of this Act amends the Excise Duty Act Amendment of
and it shall be read and construed as one with the Excise Duty Act, the
Act.
hereinafter in this Part referred as "the principal Act".
(2) The provisions of this Part shall be deemed to have come
into force on the 26th October, 2010, except for article 70(e), which
shall be deemed to have come into force on 1st January, 2011.
The First Schedule to the principal Act shall be amended Amendment of
the First
as follows
Schedule to the
principal Act.
(a) immediately beneath the item "Mobile Telephony
Services" in the "First Column - List of Excise Goods" Column
there shall be added the item "Cement"; and
(b)
immediately beneath the item "Fifth Schedule" in
the "Second Column - Relevant Schedule" column there shall be
added the item "Schedule Five A".
The Second Schedule to the principal Act shall be
amended as follows
(a) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Beer", there shall be substituted
the following
"€1.50 per hectolitre per degree Plato";
(b) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Beer if produced by small and
independent breweries with an annual production not exceeding
200,000 litres", there shall be substituted the following
"€0.75 per hectolitre per degree Plato"; and
(c) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Products containing a mixture of
beer with non-alcoholic drinks", there shall be substituted the
following
"€0.25 per hectolitre per degree Plato".
The Third Schedule to the principal Act shall be amended
as follows
(a) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Cigarettes", there shall be
substituted the following
"47.0% of the retail price plus €28.00 per 1000
cigarettes but not less than €120.50 per 1000 cigarettes";
(b) for the words in paragraph 1.b. in the "Description
of Excise Goods" Column under the heading "Cigarettes", there
shall be substituted the following
"A roll of tobacco referred to in paragraph 1.a.i.
shall, for excise duty purposes, be considered as two
cigarettes where, excluding filter or mouthpiece, it is
longer than 8 cm but not longer than 11 cm, as three
cigarettes where, excluding filter or mouthpiece, it is
longer than 11 cm but not longer than 14 cm, and so on.
Products consisting in whole or in part of
substances other than tobacco but otherwise conforming to
the criteria set out in sub-paragraph a.i. to iii. above shall
be treated as cigarettes and the provisions of this sub-
paragraph shall apply thereto.";
(c) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Cigars and Cigarillos", there shall
be substituted the following
"€16.90 per 1000 units";
(d) for the words from "The following shall be deemed
to be cigars or cigarillos" to the words "- a wrapper of
reconstituted tobacco." under the heading "Cigars and
Cigarillos" in the "Description of Excise Goods" Column there
shall be substituted the following
"The following shall be deemed to be cigars or
cigarillos if they can be and, given their properties and
normal consumer expectations, are exclusively intended to
be smoked as they are
i. rolls of tobacco with an outer wrapper of
natural tobacco;
ii. rolls of tobacco with a threshed blend
filler and with an outer wrapper of the normal
colour of a cigar, of reconstituted tobacco,
covering the product in full, including, where
appropriate, the filter but not, in the case of tipped
cigars, the tip, where the unit weight, not including
filter or mouthpiece, is not less than 2,3 g and not
more than 10 g, and the circumference over at
least one third of the length is not less than 34 mm.
Products which consist in part of substances other
than tobacco but otherwise fulfil the criteria set out above
shall be treated as cigars and cigarillos.";
(e) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Hand-Rolling Tobacco", there
shall be substituted the following
"€75.40 per kg.";
(f)
for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Other Smoking Tobacco", there
shall be substituted the following
"€75.40 per kg.";
(g) for the words from "The following shall be deemed
to be smoking tobacco" to the words "set out in indents (i) and
(ii) above shall be treated as smoking tobacco." under the
heading "Other Smoking Tobacco" in the "Description of Excise
Goods" Column there shall be substituted the following
"The following shall be deemed to be smoking
tobacco
i. tobacco which has been cut or otherwise
split, twisted or pressed into blocks and is capable
of being smoked without further industrial
processing;
ii. tobacco refuse put up for retail sale
which does not fall under the definition of cigars
and cigarillos or cigarettes and which can be
smoked. For the purpose of this paragraph,
"tobacco refuse" shall be deemed to be remnants
of tobacco leaves and by-products obtained from
tobacco processing or the manufacture of tobacco
products.
Smoking tobacco as defined above in which more
than 25% by weight of the tobacco particles have a cut
width of less than 1.5 mm shall be deemed to be fine-cut
tobacco for the rolling of cigarettes.
Smoking tobacco in which more than 25% by
weight of the tobacco particles have a cut width of 1.5 mm
or more and which was sold or intended to be sold for the
rolling of cigarettes may also be deemed to be fine-cut
tobacco for the rolling of cigarettes.
Products consisting in whole or in part of
substances other than tobacco but otherwise conforming to
the criteria set out in sub-paragraphs i. and ii. above shall
be treated as smoking tobacco.";
(h) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Pipe Tobacco", there shall be
substituted the following
"€23.96 per kg."; and
(i)
for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Chewing Tobacco and Snuff",
there shall be substituted the following
"€32.82 per kg.".
The Fourth Schedule to the principal Act shall be amended Amendment of
the Fourth
as follows
Schedule to the
principal Act.
(a)
for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Leaded Petrol", there shall be
substituted the following
"€588.18 per 1,000 litres";
(b) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Unleaded Petrol", there shall be
substituted the following
"€469.38 per 1,000 litres";
(c) for the words in the "Description of Excise Goods"
column "Gas Oil falling within CN Codes 2710.19.41 to
2710.19.49 excluding Gas Oil falling within 2710.19.49 if used
for heating purposes" there shall be substituted the words "Gas
Oil falling within CN Codes 2710.19.41 to 2710.19.49 and
blends of the foregoing with Biodiesel, excluding Gas Oil or
Gas Oil blended with Biodiesel, with a sulphur content not
exceeding 0.1% sulphur by weight if used for heating
purposes"; and for the words "€352.40 per 1000 litres" in the
relative "Rate of Excise Duty" column thereof there shall be
substituted the words "€382.40 per 1000 litres";
(d) for the words in the "Description of Excise Goods"
column "Gas Oil falling within CN 2710.19.49 if used for
heating purposes" there shall be substituted the words "Gas Oil
or Gas Oil blended with Biodiesel, with a sulphur content not
exceeding 0.1% sulphur by weight if used for heating
purposes"; and for the words "€96.79 per 1000 litres" in the
relative "Rate of Excise Duty" column thereof there shall be
substituted the words "€142.09 per 1000 litres";
(e)
for the words in the "Description of Excise Goods"
column "Biodiesel (a mixture of biomass and gas oil)" there
shall be substituted the words "Biodiesel, a diesel quality liquid
fuel produced from biomass or waste cooking oil, with an ester
content of not less than 96.5% by weight and a sulphur content
not exceeding 0.005%, whether in blend or not"; and for the
words "€352.40 per 1000 litres" in the relative "Rate of Excise
Duty" column thereof there shall be substituted the words
"€382.40 per 1000 litres";
(f)
for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Heavy Fuel Oil", there shall be
substituted the following
"€30.00 per 1000 Kgs.";
(g) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Kerosene", there shall be
substituted the following
"€382.40 per 1000 litres";
(h) for the words in the "Rates of Excise Duty" column
thereof in respect of the item "Electricity", there shall be
substituted the following
"€1.50 per MWh"; and
(i)
the following words in the "Description of Excise
Goods" column under the title "EXEMPTIONS" shall be
deleted
"The biomass content (i.e. the percentage element)
in Biodiesel is exempted from the payment of excise duty
under fiscal control where such energy products are made
up of, or contain, one or more of the following products
-
products falling within CN Codes 1507
to 1518;
-
products falling within CN Codes
3824.90.55 and 3824.90.80 to 3824.90.99 for their
components produced from biomass;
-
products falling within CN Codes
2207.20.00 and 29 05 11 00 which are not of
synthetic origin;
-
products produced from biomass,
including products falling within CN Codes 4401
and 4402;
-
products which contain water (CN Codes
2201 and 2851.00.10).
"Biomass" shall mean the biodegradable fraction of
products, waste and residues from agriculture (including
vegetal and animal substances), forestry and related
industries, as well as the biodegradable fraction of
industrial and municipal waste.".
Immediately after the Fifth Schedule of the principal Act Addition of new
Schedule to the
there shall be added the following new Schedule
principal Act.
"SCHEDULE FIVE A
Description of excise goods
Rate of Excise Duty
€9.00 per 1000 Kgs ".
Portland Cement excluding white cement
PART IX
(1) This Part of this Act amends the Value Added Tax Amendment of
Act and it shall be read and construed as one with the Value Added the
Tax Act.
Tax Act, hereinafter in this Part referred as "the principal Act".
(2) The provisions of this Part shall come into force as
follows
(a) article 73 shall be deemed to have come into force
on the 1st January, 2011; and
(b) the remaining provisions of this Part shall come into
force on such a date as the Minister of Finance may by notice in
the Gazette establish, and different dates may be so established
for different provisions or different purposes of this Part.
In paragraph (a) of article 4 of the principal Act, for the Amendment of
words "by a person registered under article 11", there shall be article
principal Act.
substituted the words "by a person registered under article 11 or by a
person who is exempted from registration under article 11, as the
Minister may by regulations prescribe".
Immediately after subarticle (4) of article 32 of the Amendment of
article 32 of the
principal Act, there shall be inserted the following new subarticle
principal Act.
"(5) The Commissioner may, for the purposes of this Act,
cancel any provisional assessment raised by him, and issue a
fresh provisional assessment, and such cancellation shall be
without prejudice to the raising of a fresh provisional
assessment required to be raised under this Act in replacement
of the provisional assessment so cancelled which shall be
deemed not to have been raised.
Such fresh provisional assessment has to be raised within
the time limit specified in subarticle (1).".
In subarticle (1) of article 50 of the principal Act, for the Amendment of
words "within thirty-one days from the earlier of:", there shall be article
principal Act.
substituted the words "within thirty days from the earlier of:".
Article 77 of the principal Act shall be amended as
follows
(a)
in paragraph (d) thereof, for the words "documents
or accounts;", there shall be substituted the words "documents
or accounts, or is in possession of or supplies to another person
any software application that would erase, destroy, damage or
conceal any stored information or any such records, documents
or accounts;";
(b) in paragraph (e) thereof, for the words "which is
incorrect or misleading in any material respect", there shall be
substituted the words "which is incorrect or misleading in any
material respect or fails to provide to the Commissioner,
without any valid reason, all copies of any used or unused
manual fiscal receipts where required by the Commissioner"
and
(c)
for the words "shall be guilty of an offence and
shall, on conviction, be liable to a fine (multa) of not less than
seven hundred euro (€700) and not exceeding three thousand
five hundred euro (€3,500) and, except for paragraph (p), 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" there shall be substituted the words
"shall be guilty of an offence and shall, on conviction, be
liable -
(i) to a fine (multa) of not less than six thousand
euro (€6,000) and not exceeding ten thousand euro
(€10,000) for an offence committed under paragraphs (c)
and (d); and
(ii) to a fine (multa) of not less than seven
hundred euro (€700) and not exceeding three thousand five
hundred euro (€3,500) for an offence under the other
paragraphs,
and, in addition, for any offence as above referred to in all
paragraphs, except for paragraph (p), 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.".
Article 86 of the principal Act shall be amended as
follows
(a)
subarticle (2) thereof shall be substituted by the
following new subarticle
"(2) Where in the execution of a contract made
before the date of coming into force of any change made in
the rate of tax in terms of article 19, any goods or services
are supplied on or after the date of coming into force of
such change, and the supply is a taxable supply, that
contract shall, for all the purposes of any law, be
interpreted as if the parties to that contract had agreed to a
change in the consideration stipulated therein to reflect the
difference between the rate of tax applicable before the
change and the rate of tax applicable after the change.";
and
(b) in paragraph (b) of subarticle (4) thereof, for the
words "or the 1st January 2004," there shall be substituted the
words "or the date of coming into force of any change referred
to in subarticle (2),".
PART X
(1) This Part amends the Eco-Contribution Act and it Amendment of
shall be read and construed as one with the Eco-Contribution Act, the
Contribution
hereinafter in this Part referred to as "the principal Act".
Act.
(2) The provisions of this Part shall be deemed to have come
into force on 1 January 2011.
In subarticle (1) of article 23 of the principal Act, for the Amendment of
words "from the date of the decision of the Appeals Board.", there article
principal Act.
shall be substituted the words "from the date when the decision of the
Appeals Board is notified to that party.".
Passed by the House of Representatives at Sitting No. 328 of the
16th March, 2011.
M ICHAEL F RENDO
Speaker
P AULINE A BELA
Clerk to the House of Representatives