ACT No. XXXVII of 2014 AN ACT to amend the Income Tax Act, Cap. 123, and to provide for matters ancillary or connected therewith.

I assent.

M ARIE L OUISE

(L.S.)

C OLEIRO P RECA

President

31st October, 2014

ACT No. XXXVII of 2014

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

for matters ancillary or connected therewith.

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 Income Tax (Amendment)

Act, 2014, and this Act shall be read and construed as one with the

Income Tax Act, hereinafter referred to as "the principal Act".

Immediately after paragraph (w) of sub-article (1) of

article 12 of the principal Act there shall be added the following new

paragraph

"(x)

interest payable to an individual in his own name by

(i) a person carrying on the business of banking

in accordance with the laws of any European Union

Member State in respect of a sum of money deposited into

a special individual saving account recognised as such by

the Commissioner, and

(ii) interest payable to an individual in his own

name by the Government of a European Union Member

State or by any agency thereof, by a corporation or

authority established by law, or in respect of a public issue

by a company, entity or other legal person howsoever

constituted and whether resident in Malta or otherwise,

where the relevant interest-bearing securities are credited

for the benefit of the individual to a special individual

saving account recognised as such by the Commissioner

Provided that the aggregate amount of the deposits into

such account and the value of the interest-bearing securities

credited for the benefit of the individual into such account do

not together exceed one thousand euro (€1,000) in any year or

such other amount as may be prescribed by the Minister from

time to time.".

Immediately after sub-article (6) of article 31D of the Amendment of

article 31D of

principal Act, there shall be added the following new sub-article

the principal

Act.

''(6A) Where an individual has failed to declare rental

income derived from a tenement leased as a residence or garage

during the relevant period in any return and such individual opts

to declare such rental income in the relevant form referred to in

article 42(4)(c) of the Income Tax Management Act, which is

required to be submitted by not later than the 30th June 2015,

and pays the tax referred to in sub-article (2) of this article on

such rental income, it shall be deemed for the purpose of the

Income Tax Acts that such rental income was received during

basis year 2014. The individual exercising the said option shall

pay to the Commissioner the tax in such manner as may be

prescribed in accordance with the provisions of article 42 of the

Income Tax Management Act

Provided that where an individual exercises the said

option and declares rental income for more than one year, the

total amount subject to the tax referred to in sub-article (2) of

this article shall not exceed an amount determined as follows

Y = (a / b) x 2

Where –

(a)

"Y" represents the amount to be determined;

(b) "a" is the total rental income declared in the

said relevant form;

(c) "b" is the number of years comprised in the

relevant period in respect of which rental income is

declared

Provided also that where following an

enquiry there is evidence that an individual who exercises

the option referred to in this sub-article has overstated the

amount of rental income declared in the relevant form for

the purpose of obtaining a tax advantage, the preceding

proviso shall not apply and the total amount of rental

income declared in the said form shall be subject to tax at

the rate of 15%.

For the purpose of this sub-article "relevant period"

means the period of eight years preceding basis year 2013.".

Immediately after article 56 of the principal Act there shall

be added the following new article

" Personal

57. (1) An amount which is equal to

retirement

the lower of

schemes.

(a)

fifteen per centum (15%) of

the aggregate of any contributions made

or premiums paid by a person during the

year immediately preceding a year of

assessment in respect of membership in

any personal retirement schemes as

defined

in

the Special Funds

(Regulation) Act or any Act substituting

the said Act, or a policy of insurance

held with a company authorised to carry

on long term business under the

Insurance Business Act; and

(b) one hundred and fifty euro

(€150) or such other amount as may be

prescribed by the Minister from time to

time,

is to be allowed as a credit against the income

tax chargeable in Malta to any person who is a

member of, and makes contributions to, any

one or more personal retirement schemes or

pays a premium in relation to a policy of

insurance in the year immediately preceding

the year of assessment, and the amount of the

income tax so chargeable shall be reduced by

the amount of the credit

Provided that the credit shall only be

allowed in respect of qualifying schemes or

policies of insurance as may be prescribed by

the Commissioner and if the details of such

person and amounts contributed by him to the

personal retirement scheme/s or the premiums

paid by him in relation to the policy of

insurance in the relevant year are confirmed

by a certificate issued by a licence holder in

such format and content as determined by the

Commissioner.

(2) In the case of a married couple

resident in Malta, and irrespective of whether

or not the responsible spouse has opted for a

separate computation in terms of article 50,

each of the spouses may claim the credit

referred to in this article.

(3) The credit referred to in this article

shall only be available in respect of the

income tax chargeable for the year during

which the contribution was made by a person

to personal retirement scheme/s or the

premiums paid by him in relation to the policy

of insurance, and such credit may not be

carried forward to subsequent years if it is not

so utilised.

(4) The income in respect of which a

credit is granted under this article shall be

deemed to constitute the first part of that

person’s total income for the relative year of

assessment.

(5) No refund of tax may be claimed

by a person for an amount which is equal to

the credit allowed under this article where

such refund would have been otherwise due

as a result of the person having availed

himself of the credit in terms of this article.

(6) For the purposes of this article, a

licence holder shall mean any person, whether

a natural person or otherwise, who holds a

licence under the Special Funds (Regulation)

Act or any Act substituting the said Act, or to

carry on long term business under the

Insurance Business Act, and is recognised by

the Commissioner for the purpose of issuing

certificates in terms of this article.".

Sub-article (4) of article 42 of the Income Tax

Management Act shall be amended as follows

(a) in paragraph (c) thereof, for the words "gross rental

income is received." there shall be substituted the words "gross

rental income is received:"; and

(b) immediately after paragraph (c) thereof, there shall

be added the following new proviso

"Provided that in the case of an individual

who exercises the option referred to in article 31D(6A) of

the Income Tax Act, payment of tax shall be made by not

later than the 30th June 2015.".

Passed by the House of Representatives at Sitting No. 190 of the

22nd October, 2014.

A NĠLU F ARRUGIA

Speaker

R AYMOND S CICLUNA

Clerk of the House of Representatives