Regulations, 2004

L.N. 220 of 2004

VALUE ADDED TAX ACT

(CAP. 406)

Value Added Tax (Refund of Value Added Tax to taxable

persons not established in the territory of the Community as

well as taxable persons not established in Malta but

established in the territory of the Community and who realise

in Malta operations not allowed for refund under regulation 2

(a) and (b) of Legal Notice No. 219)

Regulations, 2004

IN exercise of the powers conferred by articles 25 and 75 of the

Value Added Tax Act, hereinafter referred to as “the Act”, the Prime

Minister and Minister of Finance has made the following

regulations>-

(1) The title of these regulations is the Value Added Tax Citation and

(Refund of Value Added Tax to taxable persons not established in commencement.

the territory of the Community as well as taxable persons not

established in Malta but established in the territory of the Community

and who realise in Malta operations not allowed for refund under

regulation 2 (a) and (b) of Legal Notice 219) Regulations, 2004.

(2) These regulations shall come into force on 1st May,

2004, and shall apply solely to input tax that becomes chargeable on

or after that date.

For the purposes of these regulations, unless the context Interpretation.

otherwise requires>

(1) “A taxable person not established within the territory

of the Community” shall mean a taxable person who during the time

of supply in question, does not have his business nor a fixed

establishment from which business transactions are effected, or, if

no such business or fixed establishment exists, his permanent address

or usual place of residence in the territory of the Community, and

who, during the same period, has supplied no goods or services

deemed to have been supplied in Malta, with the exception of>

(a) transport services and services ancillary thereto

exempted pursuant, insofar as these form part of the taxable

value, in accordance with item 12 of the Seventh Schedule to

the Act, and items 1, 2, 4(2), 4(3), 5, 6, 7 and 8(1) of Part One

of the Fifth Schedule to the Act<

(b) services provided in cases where tax is paid solely

by the persons to whom they are supplied, pursuant to items 7,

9, 10, 11 (1) and 12 of the Third Schedule to the Act, where the

services are supplied and carried out by a taxable person resident

abroad.

(2) “Territory of the Community” shall mean the

territories defined in the Sixteenth Schedule to the Act<

(3) “A taxable person not established in Malta” shall

mean a taxable person who during the time of supply in question,

does not have his place of his economic activity nor a fixed

establishment from which business transactions are effected, or, if

no such place of his economic activity or fixed establishment exists,

his domicile or his normal place of residence in Malta.

(1) Without prejudice to regulations 4 and 5 of these

regulations, the Commissioner of VAT shall refund to any taxable

person not established within the territory of the Community, subject

to the conditions set out below, any value added tax charged in

respect of services rendered or movable property supplied to him in

Malta by other taxable persons or charged in respect of the

importation of goods into Malta, in so far as such goods and services

are used for the purposes of the provision of services referred to in

regulation 2 (1) (a) and (b) of these regulations.

(2) Without prejudice to regulations 4 and 5 of these

regulations, the Commissioner of VAT shall refund to any taxable

person not established in Malta but in the territory of the Community,

subject to the conditions set out below, any value added tax charged

in respect of services rendered or movable property supplied to him

in Malta by other taxable persons or charged in respect of the

importation of goods into Malta, in so far as such goods and services

are used for the purposes of the supplies referred to in Article 22(4)(c)

of the Act or for the purposes of other supplies than those mentioned

in Value Added Tax (Refund of Value Added Tax to taxable persons

not established in Malta but established in the territory of the

Community and who realise only in Malta operations allowed by

these regulations), Regulations, 2004 for which they should not

register in Malta under article 10 of the Act.

(3) Refunds to taxable persons not established in the

territory of the Community shall be made conditional upon the

granting by third states of comparable advantages regarding turnover

taxes, with the exception of refunds of input VAT related to

electronically supplied services provided by taxable persons

registered in the territory of the Community under the special scheme

referred to in Part Seven of the Fourteenth Schedule to the Act.

(4) The Commissioner may, by means of a notice in

writing, require the appointment of a tax representative, with the

exception of taxable persons established in the territory of the

Community and taxable persons providing electronically supplied

services referred to in paragraph (3) of this regulation.

(1) The refunds referred to in paragraph (1) of regulation Manner of

application.

3 shall be granted upon application by the taxable person on the

form prescribed in the First Schedule to these regulations. Such

application shall be completed either in the Maltese language or in

the English language and shall be submitted to the Commissioner of

VAT, Centrepoint Building, Ta’ Paris Road, Birkirkara, CMR 02,

Malta, within six months from the end of the calendar year in which

the tax became chargeable.

If the application relates to a period of less than one calendar

year but not less than three months, the amount for which the

application is made may not be less than eighty liri (Lm80)< if the

application relates to a period of one calendar year or the remainder

of a calendar year, the amount may not be less than ten liri (LM10).

The Commissioner may round up or down, by up to 10 percent,

the figures resulting from this conversion into national currency.

(2) The application shall contain the following

information and, or documentation>

(a) an official certificate drawn up on the form prescribed

in the Second Schedule to these regulations completed either

in the Maltese language or in the English language, and endorsed

by the competent authority of the country where that taxable

person is registered for VAT or where he exercises his economic

activity<

(b) the original valid invoices and, or valid importation

documents<

(c) an attest of reciprocity for taxable persons not

established within the Community except for taxable persons

providing electronically supplied services referred to in

paragraph (3) of regulation 3 of these regulations.

(3)

Refund may not be granted>

(a) With respect to refunds to taxable persons not

established in the territory of the Community, under conditions

which are more favourable than those applied to Community

taxable persons<

(b) on supplies made by that taxable person where his

business would, by its nature, be treated as exempt without credit

if such business had been carried on in Malta.

(1) Decisions concerning applications for refund shall be

given within six months from the date when the applications,

accompanied by all the necessary documents required under these

regulations for the examination of the application, are received by

the Commissioner. Refunds shall be made before the end of this

period, at the applicant’s request, either in Malta or in the country

where he is established. In the latter case, the bank charges for the

transfer shall be payable by the applicant.

(2) The Commissioner shall state the ground for refusal

of an application. Appeals against such refusal may be made to the

Value Added Tax Appeals Board in Malta, subject to the same

conditions as to form and time limits as those governing claims for

refund made by taxable persons established in Malta.

Where a refund has been obtained in a fraudulent or in any

other irregular manner, the Commissioner shall proceed directly to

recover the amounts wrongly paid and any penalties and interest

imposed by regulation 7 of these regulations, without prejudice to

the provisions relating to mutual assistance in the recovery of value

added tax.

In the case of fraudulent applications which cannot be made

the subject of an administrative penalty, the Commissioner shall

refuse for a maximum period of two years from the date on which

the fraudulent application was made any further refund to the taxable

person concerned. Where an administrative penalty had been

imposed and interest has become due, but has not been paid, the

Commissioner shall suspend any further refund to the taxable person

concerned until it has been paid. Furthermore the Commissioner shall

have the right to deduct such administrative penalty and interest from

any future refunds claimed by that taxable person.

Where a refund has been obtained in a fraudulent or any Administrative

penalty and

other irregular manner, as outlined in regulation 6 of these interest.

regulations, an administrative penalty equivalent to twenty per cent

of the amount unduly received shall become due, together with

interest at the rate of one per cent per month or part thereof, which

interest shall start to run from the date of payment of the amount

unduly received to the date when such amount together with the

administrative penalty and interest is paid back to the Commissioner>

Provided that the amount of such administrative penalty and

interest taken together shall not exceed the amount obtained in a

fraudulent or any other irregular manner.

The payment of the refund shall be made in euro or in Method of

payment.

national currency, according to the choice of the taxable person, by

bank draft posted to the address shown on the application.

(1) For the purposes of these regulations, eligibility for Eligibility.

refunds shall be determined in accordance with the provisions of

articles 22 and 23 of the Act.

(2) These regulations shall not apply to supplies of goods,

which are or may be exempted under item 1(2) of Part One of the

Fifth Schedule to the Act.

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press