Payment of Provisional Tax (p.T.) Rules, 2000

L.N. 48 of 2000

INCOME TAX MANAGEMENT ACT, 1994

(CAP. 372)

Payment of Provisional Tax (p.T.) Rules, 2000

IN exercise of the powers conferred by section 57 and by subsection

(2) of section 42 of the Income Tax Management Act, 1994, hereinafter

referred to as "the Act", the Minister of Finance has made the following

The title of these Rules is the Payment of Provisional Tax Citation.

(P.T.) Rules, 2000.

In these Rules, unless the context otherwise requires

(1)

"basis period" means a period of twelve months ending on

the 31st December or, in the case of a provisional tax payer who

has been permitted to make his accounts to any other date in

accordance with the provisions of subsection (2) of section 11 of

the Income Tax Act, on such other date;

"benchmark year of assessment" with respect to a basis period

means the later of

(a)

the year of assessment 1999; and

(b) the last year of assessment in respect of which

a tax return was due to be furnished before the commencement

of the calendar year in which the first P.T. payment for that

basis period falls due;

"provisional tax" means provisional tax paid or payable in

accordance with these Rules or with the Payment of Provisional L.N.I0ofI973.

Tax (P.T.) Rules 1973;

"provisional tax payer" means and includes, unless the

Commissioner otherwise determines by means of a notice in

writing, any person who during a basis period is

(a)

a company;

(b) an individual who was liable to tax in Malta for

the relative benchmark year of assessment but excluding an

individual who was eligible to make an election in terms of

section 12 of the Act in respect of the benchmark year of

assessment;

(c)

a person who is not a company or an individual;

"P. T. benchmark" means the amount determined in accordance

with rule 6, 7, 8 or 9 of these Rules as may be applicable;

"P.T. payment" means a payment of provisional tax required

to be effected in terms of rule 3 of these Rules.

(2) Except as otherwise provided, and unless the context

otherwise requires, words and expressions used in these Rules have the

same meaning and the same interpretation as the meanings and

interpretations which they have in terms of the Act and of the Income

Tax Act.

(1) Every provisional tax payer shall effect payments of

provisional tax during every basis period ending on or after the 31st

January, 2000 on account of his liability to tax for the year of assessment

commencing on the 1st January ofthe year immediately following that

during which the said basis period ends.

(2) P.T. payments shall be made in the amounts and within

the times prescribed in these Rules.

(3) The amount of any P.T. payment due under these rules

shall be the amount determined in accordance with the applicable

provisions rounded up or down to the nearest lira.

(1) P.T. payments fall due on the 30th April, 31 st August

and 21 st December of each basis period.

(2)

The first P.T. payment for a basis period of a

provisional tax payer is that which falls due on that of the said three

dates which comes first during that basis period and the order of the

other P.T. payments is regulated accordingly.

Save as otherwise provided in these Rules the total of the P.T.

payments during a basis period shall not be less than the P.T. benchmark

and shall be paid as follows -

(a) at least twenty percent of the P.T. benchmark shall be

paid by the date on which the first P.T. payment falls due;

(b) at least a further thirty percent of the P.T. benchmark

shall be paid by the date on which the second P.T. payment falls

due;

(c) at least a further fifty percent of the P.T. benchmark

shall be paid by the date on which the third P.T. payment falls due.

(1) Save as otherwise provided in these Rules the P.T. P.T. benchmark.

benchmark of a provisional tax payer for a basis period is determined

by taking the amount of tax payable, if any, for the benchmark year of

assessment as shown in the self assessment of that provisional tax payer

for that year and computed in accordance with the provisions of

subsection (2) of section 10 of the Act and adding back provisional tax

taken into account in the said self assessment.

(2) For the purpose of this rule no account shall be taken of

any further return submitted in accordance with section 13 of the Act

after the commencement of the month immediately preceding that in

which the first P.T. payment for the basis period in question falls due.

(1) When a provisional tax payer has not, before the P.T. benchmark in

commencement of the month immediately preceding that in which a ~::e:~

P.T. payment falls due, furnished a self assessment for the relative been furnished.

benchmark year of assessment the P.T. benchmark with respect to that

particular payment shall be determined as follows: -

(a) if the Commissioner has made a determination with

respect to the tax payable by that provisional tax payer for the said

year of assessment in terms of subsection (3) of section 31 of the

Act and has given notice of that determination to that provisional

tax payer before the commencement of the month in which the

said P.T. payment falls due the P.T. benchmark shall be arrived at

by taking the amount of tax shown as payable in that determination

and adding back the provisional tax, if any, taken into account

therein;

(b) if the provisions of paragraph (a) hereof do not apply

the P.T. benchmark shall be an amount determined in the manner

specified in rule 6 of these Rules except that the reference therein

to the benchmark year of assessment shall be construed as a

reference to the last year of assessment in respect of which a self

assessment has been furnished being a self-assessment furnished

before the commencement of the month immediately preceding

that in which the P.T. payment in question falls due and relating to

a year of assessment preceding the benchmark year of assessment;

(c) if the Commissioner has not made a determination to

which paragraph (a) hereof applies and the provisional tax payer

has not furnished a self assessment to which paragraph (b) hereof

applies the P.T. benchmark shall be nil.

(2) When the P.T. benchmark with respect to a P.T. payment

that fell due during a basis period has been determined in accordance

with any of the provisions of paragraph (1) of this rule and as a result of

the submission of a self assessment that paragraph is not applicable to a

subsequent P.T. payment that falls due during the same period, the P.T.

benchmark for that period shall be recalculated by reference to that self

assessment as provided in rule 6 of these Rules. The recalculated P.T.

benchmark shall apply and shall be deemed to have applied for all the

purposes of these Rules, but saving the provisions ofrule 10, with respect

to all the P.T. payments for that basis period.

(3) The foregoing provisions of this rule are without

prejudice to the Commissioner's powers to take action for the collection

of any provisional tax due in an amount calculated under the provisions

of paragraph (1) before a recalculation falls to be made in accordance

with paragraph (2).

(1) The P.T. benchmark with respect to provisional tax

payable on account of the first year of assessment of a provisional tax

payer who is not an individual is nil.

(2) The P.T. benchmark with respect to provisional tax

payable on account of the second year of assessment of a provisional

tax payer who is not an individual shall be determined in the manner

specified in rule 6 of these Rules except that

(a) the reference to the benchmark year of assessment shall

be construed as a reference to that provisional tax payer's first

year of assessment; and

(b) the references to a self assessment shall be construed as

references to a computation made by that provisional tax payer on

the basis of his records in the same manner as a self assessment.

(1) Where it appears to the Commissioner that as a result of

a merger of companies or a division of a company the total of the P.T.

benchmarks for one or more basis periods of the companies involved in

case of mergers and

the merger or the division computed in accordance with the other

provisions of these Rules is or will be less than the amount that would

result if such merger or division did or does not take place he may by

order in writing determine the P.T. benchmark for any or all of the said

companies for the basis period or periods in question in amounts which

in his opinion compensate for the said shortfall.

(2) Notwithstanding anything contained in these Rules, but

without prejudice to the provisions of rule 10 of these Rules, the P.T.

benchmark determined in accordance with paragraph (1) of this rule

shall apply during the basis period or periods in question as from the

date of the service of that order on the respective company.

(1) Where it appears to a provisional tax payer that the tax Reduction in P.T.

payable for a year of assessment (hereinafter in these Rules referred to payment.

as "the current year liability") is less than the P.T. benchmark for the

corresponding basis period, he has an option to limit the amount payable

as provisional tax during that basis period to an amount that is not less

than the current year liability.

(2) The option referred to in paragraph (1) shall be exercised

by means of the delivery to the Commissioner of the form prescribed in

the Schedule to these Rules and may be exercised more than once during

the same basis period.

(3) The amount of any P.T. payment that falls due during a

basis period after an option has been exercised as aforesaid with respect

to that period shall be the lower of

(a)

the amount due in accordance with rule 5 of these Rules;

and

(b) the excess, if any, of the current year liability over the

total provisional tax already paid for the basis period in question.

For the purpose of rule 10 and subject to the provisions of Provisional tax

rule 12 of these Rules the current year liability shall be deemed ~~·::=r:.

provisionally to be an amount determined in the manner specified in

rule 6 of these Rules except that

(a) the reference to the benchmark year of assessment shall

be construed as a reference to the year of assessment on account

of which the provisional tax payment in question is payable;

(b) the references to a self assessment shall be construed as

references to a computation based on amounts estimated by the

provisional tax payer at the time that the option is exercised.

(I) An amount that is provisionally deemed as the current Re~sio.n of

year liability in accordance with rule 11 of these Rules shall be revised estllnatlon.

as provided in paragraph (2) of this rule when -

(a) a self assessment for the year of assessment in question

is furnished to the Commissioner; or

(b) the Commissioner makes a determination in terms of

subsection (3) of section 31 of the Act with respect to the tax

payable for the year of assessment in question and serves a notice

of that determination on the provisional tax payer.

(2) When a revision falls to be made in terms of paragraph

(1) of this rule the current year liability for the purposes of rule 10 of

these Rules shall be deemed to be and to have always been the amount

resulting to be payable in terms of the self assessment or the

determination, as the case may be, and the provisions of rule 14 of

these Rules shall be construed accordingly.

(3) The foregoing provisions of this rule are without

prejudice to the Commissioner's powers to take action for the collection

of any provisional tax due in an amount calculated under the provisions

of rules 10 and 11 before a revision falls to be made in accordance with

rule 12 of these Rules.

(1) Provisional tax paid for a basis period shall be applied

towards the discharge of any provisional tax for that period that has

fallen due and any excess shall be appropriated to provisional tax for

that period that has not yet fallen due.

(2) Provisional tax paid by a provisional tax payer on

account of his tax liability for a year of assessment shall be set off for

the purpose of collection against the tax chargeable in respect of the

said year of assessment and if there is an excess after the aforesaid set

off has been made such excess shall be refunded in accordance with the

provisions of section 48 of the Act.

(1) When any provisional tax payable in accordance with

these Rules is not paid by the date when it falls due additional tax shall

be charged as provided in section 44 of the Act in an amount equal to

one percent of the unpaid provisional tax for each calendar month or

part thereof during which such tax remains unpaid.

(2) No further additional tax shall be chargeable on unpaid

provisional tax for any month commencing after the tax settlement date

relative to the year of assessment on account of which that provisional

tax was due.

(3) Notwithstanding the provisions of rule 13 of these Rules

the amount of provisional tax that would otherwise be available for set

off in accordance with paragraph (2) of that rule against the tax

chargeable in respect of a year of assessment shall first be applied

towards the discharge of additional tax, if any, due on and up to the tax

settlement date corresponding to that year of assessment and the amount

available for set off shall be reduced accordingly.

(4) Any additional tax on provisional tax that has not been

discharged as provided in paragraph (3) of this rule shall be deemed to

be tax due for the year of assessment on account of which the said

provisional tax was due and the provisions of the Income Tax Acts

relating to the collection and recovery of tax shall apply to the collection

and recovery of such additional tax.

(5) The foregoing provisions of this rule are without

prejudice to the Commissioner's powers to take action for the collection

of any additional tax before the tax settlement date referred to in

paragraph (2) of this rule.

Nothing in these Rules shall be construed as in any way Pow~o~the

1 lIIutmg t h e powers grante d to t h e C onurusslOner

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section

a change in the

of section 11 of the Income Tax Act.

accounting date.

When, in terms of the other provisions of these Rules, the Transitory

date on which any P.T. payment for a basis period that ends during provision.

2000 falls due is a date that falls during 1999 any such payment shall be

deemed, to the extent that it has not been paid, to fall due on the 30th

April, 2000 in addition to any other payment that falls due on that date.

The Payment of Provisional Tax (P.T.) Rules, 1973 are hereby Repeal and saving.

repealed without prejudice to anything done or omitted to be done

thereunder: provided that the said Rules shall remain fully applicable

with respect to any provisional tax payment that was made or that was L.N. 10 of 1973.

due to be made on account of tax chargeable for any year of assessment

preceding the year of assessment 200 1.

Schedule

(Rule 10)

P.T. REDUCTION FORM

In terms of rule 10 of the Payment of Provisional Tax (P.T.) Rules, 2000, I opt to

reduce the amount payable as provisional tax for the basis period ending

I estimate that the current year liability for the said basis period will be

Lm

_

I declare that I am aware of the provisions of the said Rules and I understand that

I shall become liable to additional tax of 1% on any unpaid P.T. for each calendar

month or part thereof during which such provisional tax remains unpaid.

Narne of P.T. payer

Reference No.1 Identity Card No.

Address

Date

Signature

Permit No.*

*(only in case ofpersons who, in accordance with the provisions of subsection (2)

ofsection 11 ofthe Income Tax Act have been permitted to make their accounts to a

date other than 31 December)