The Value Added Tax (Prores.~lonal Ser vices) Regulalions, 1995 (servizziprofessjonali)

L.N. 4 of 1995

VALUE ADDED TAX ACT, 1994

(ACT NO. XII 010' 1994)

The Value Added Tax (Prores.~lonal Ser vices) Regulalions, 1995

IN exercise of the powers conferred by sec tions 39, 46 and 61 of

the Value Added Tax Act, 1995, hereinafter referred 10 as "the Act",

the Min ister of Finance ha~ made the following rcgulatio ns:-

These regulations may be cited liS the Value Added Tax (Pro-

fessional Services) Regulations, 1995 and shall be deemed to have come

into force on the 1st Janu ary, 1995.

(Regulation 2)

I, Services performed by a person holding a warrant issued under any law in

force in Malta 10 practise a profession acting in an independcnt capacity in the exer-

cise of that profession,

2, Services of a group of persons holding a warrant issued under any law in

force in Malta to practice a profession whether associated in a partnership or not but

excluding a cummercial partnership,

3, Services performed by an arbitrator pursuant to a submission for arbitration

madc in eomformily with subsection ( I) of section 970 of tOe Code of Organisation

and Civil Procedure,

4. Services perfonned by a judicial referee or an expert appoin ted by a court or

by a tribunal set up by law.

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Ippubblik.i mld. o;pon;rn<ni ,.' 1. lnfonnaajoni _ IC.o&tilja - I'MNUIotd ~1 ~ lH ~ • .. M ...

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In these regu lations. unless the context ot herwise re·

quires -

"professional services" means any of lhe services specified

in the Schedule 10 these regulutions;

"fiscal receipt" has the meaning auigned 10 it ill the Value

Added Tax (Fiscal Receipts) Regulations. 1994;

(2)

Other terms have the meaning ass igned \0 them in the

Act.

(I) SUbje<:tto the other prov isions o f these regu la tions, a

s upply of profess ional services shall be treated as laking place at the

earlier of

(a) the date when a tlU invoice or a fiscal receipt. as the

case may be, is issued for the said supply, to the e xt ent r;:overed by

that invoice or receipt; and

(b) the date when a payment is made for that s upply. \0 the

extent covered by that payme nt.

(2) Profess ional serv ice~ performed by a ((L~uble person

before the I st January. 1995, s hall be treated a~ supplied o n the dut..: 011

whi(;h they were perfo rmed.

(3)

Whe n a payment is made before the I SI January, 1995,

for professional services pcrfonned by a taxable person on or after

Ihat date those servi ces shall be trented as supplicd on thei st January,

1995 .

( I) The services of un ad vocate or of a legal procurator in

assisting any party loj udicial proceedings shall be treated as performed-

(a) where the j udicial proceedings havc been inSh'uted

before the I st January, 1995 and the fin al decree or judgement is

delivered on or before the lOth June. 1995. on a date preceding

the IsI January, 1995

(b) in any other case, on the date when a final decree or

judgement in those proceedings is delivered by the cowt in which

the proceedings have been instituted (services relating to pro-

ceedings instituted in different cou rts being treated as supplied

sepamte1y) vr, when the ad vocate or legal procumtor abandons

or is abandoned by his client at an earlier date, on suc h earlier

dale.

(2) The services of a judicial referee or of an expert ap-

poi nted by a court or by a tribunal set up by law shall be treated as

performed-

(a) where the appointment of the referee or expert has been

made before the 1st January, 1995 and the report is filed or made

on or before the 30th June. 1995. on a date preceeding the 1st

January, 1995

(b) in any other case. on the datc on which the report is

fi led in or made to the court or tri bunal or, when the appointment

is tcnninated on an earlier dnte, on suc h earlier date.

The services of un 3rbitrator shall be treated as pe r-

(3)

formed -

(a) where the appointment of the arbi lr.ltor has be(""1I mude

before the 1st Janu ury. 1995 :md the awurd i.~ mude on or before

the 3() h June. 1995, on a date prcceeding the 1st January, 1995

(b) in any other case, on the date of the award or. when

the appointment is terminated on an earlier date, on such earlier

date.

(4) (a) Subject to the provisions of paragraph (b) o f th is

regulation work carried out before the ISI January, 1995 by a

public audi tor for the purpose of making a report on [he accounts

for a financial year commencing before the said dale shall be

treated as constituting a supply of services performed before the

said date

(b) When a payment for any services performed by

a publ ic auditor for the purpose of making 0 report on the IIC-

counts for a financial year ending on or after the 1st January,

1995 is made after the 30lh June, 1995, the said services shall be

treated as having been wholly performed after the 1st January,

1995. S. When no consideration is paid or payable for a su pply of

professional services and where that supply i§ 10 be treated as a taxa-

ble supply made for a consideration pursuant to regulations made for

the purposes of subsection (2) of section 7 of the Act, the dale of the

said supply shall be delcnnined in accordance wilh the provisions of

the Act without any reference to these regUlations,

6_ (I ) A tax invoice or a fi.'>Cal receipt for professional serv-

ices shall be issued not later than thirty-one days from the date on

whic h payment for the said services is made, 10 lhe extenl covered by

that payment.

A tax invoice or a fi scal receipt which include.'\ fees

(2)

for the supply of professional services shalt nOI include fce,'\ for any

OIher supply.

( I) The tax chargcable on a suppl y of profe.~sionaJ servk-

es shall be an amount over and above Ihe amount resu lting to be charge·

able for lhose services in terms of any tariff of fees eSlablished under

any law in force in Malta.

Nothing in this regulation shall be construed as rc-

(2)

quiring any person required by law to assess or declare Ihe fees p:ly-

able in accordancc with any such tariff 10 declare or assess also the

said tax.

(3) In any action for the enforcement of lhe executive ti-

tle refem:d 10 in sub-se<:lion (c) of .section 253 of the Code ofOrgani.

7.3tion and Civil Procedure, the amount for which payment may be

enforced shall be the amount shown in the taxed bill of costs in ques-

lion inc reased hy any tax c hargeable on lhe s upply of profe~siunal serv-

ices 10 which Ihe taxed bill of costs refers as evidenced by a tax invoice

o r a fiscalrcc.:eipt or a certified copy thereof anached to the said bIll .

(4) The provisions of paragnlph (3) oflhis regulation s hall

be without prejudice to the right of the debtor to request Ihl"" delivery of

the original tax invoice or the fi<;cai receipt in ac.:ordance wi th regu la-

tion 8 of these regulations.

T he provisio ns of thi s regulatio n s hall apply with respect to

any action for the payment of fees for piOfessional services brought

against any person mher than the person to whom the services were

(a) the person against whom Ihe action is brought s hall not

be bound to pay the amoun t relating 10 the tax. if any, chargeable

on the supply of the said services unless the onginal tax invoice

or fiscal receipt for those se rvices complying with the pro visions

of parolgraph (b) of thi s regulation is delivered 10 him, or. where

the action is brought against a number of persons jOintly. to any

one of them

(b) a tax in voice or fiscal receipt delivered as aforesaid

s hall. in addition 10 the info m lation required by the Act. contai n

(i) the following declaration signed by the person to

w hom the said services were re ndered

·'1 declare that no credi t for input tax has o r will be

claimed by me in respect of the professional services

referred to in this tax invoicoiiscal receipt··;

(ii) where the person against whom the action orclaim

is brou ght is a regi s tcred pe rson, or. where the action is

brought against a number of persons jointly. when allY one

of them is a regis tered person, the na me and Value Added

Tax registration number of the said registered person;

(c) whe n a tax invoice or fiscal receipt for fees fo r profes-

sional services complying w ith the prov isions of paragmph lb) of

this regulation is delivered to a taxab le pe rson who is bound at

taw \0 payor rei mburse the said fees it shall for the purposes of

the Act be treated as if it were a tax invoicc for professional serv-

ices supplied to him.

( I) Any person who supplies professional se rvices may re-

I).

quest lne Commis.sioncr 10 authofiu him 10 oct':ounl for the tim.:: of

~u pplies made by him in the lll<lnOCf provided for in the Act wi thout

any re ference: 10 these regulations. and any person who has been so

authorized may requesllhc Commissionerto authorize him 10 acrount

for the (iloe of suppJ ics in accorda nce with Iht:...e regulutions.

(2)

The Commissioner may refuse 10 grant an Huthoriza-

tion requested in OC(;ordaoce with paragraph ( I) of Ihis regulation for

any reason he deems appropriate or without assigning any reason lmd

may grant such an authorization subject [0 such conditions as he may

dee m fillO impose:. including the payment of any amount delennined

by him 10 represent any IV. which. in view of the change in the man-

ner of accounting for the lax, might otherwise remain unaccounted

(~.

(I)

titlob lill-Kummissarju jawlorizzaha li laghli rendikont ghai-imicn

ta' provvisli maghmula minn hn biJ-mod kif provduI ft-A n minghajr

ilia ssir referenza gl'l:Il dawn ir.regoinmenli. u !cull persuna li Ikun hell I lI " .hnI;

aWlorizzutu lishl' litiob lill-Kummissnrju bie,," jawtorizzaha li laghli

rcndilcon t gfuti-i:micn la' provvisli SKond dawn ir-regolamenti.

(2) II-Ku mmissarju jisla' jicliad li jagl1ti awt orizazzjoni

mitlub:t skond iI-paragrafu (I) ta' dan ir-regolament gl1al1(i ragun; Ii

tidhirlu 1( icrqa jcw mingl111jr ilia tingl'lala ebda rJguni u j ista' jagl'lti dik

l-awtorizonjvni taht dawk il-kundizzjonijiet lijisla' jidhirlu 1(ierqa Ii

jagh mc:l. inklui il-hlas ta' ku ll ammoot stabbilit minnu lijirrapreienla

1(i taua 11. minhaDba fiI-bidla fiI-mod ta' rendikont dwar iHU1(a,jista'

b'lti mod jibqa' skopen.

to, Salv b' kull mod ichor pro\'dul fdawn ir- re golamenti, id- ";f~J .c:~,u

dispozizzjooijiella' I-Atl u la' kull regolament magli.mu] bis-sahha ta'

I-All ghand hom ikunu jgl10ddu gl'lall' provvisti ta' scrvizzi professjon-

all.

Sa .... e as otherwise provided in these regulations. the provi-

sions of the Act and of any regulations made under tOe Act shall apply

to supplies of professional services.