Hosting of Students (Income Tax) Rules, 2006

L.N. 142 of 2006

INCOME TAX ACT

(CAP. 123)

Hosting of Students (Income Tax) Rules, 2006

IN exercise of the powers conferred by articles 14(2) and 96 of the

Income Tax Act, hereinafter referred to as “the Act”, the Prime Minister

and Minister of Finance has made the following rules>-

(1) The title of these rules is the Hosting of Students (Income

Tax) Rules, 2006.

(2) These rules shall be applicable as from the year of

assessment 2006.

In these rules, unless the context otherwise requires>

“host family” means any individual who is registered with

the Malta Tourism Authority for the purpose of hosting of students<

“registered school” means any school or entity registered with

the Department of Education to act as a language school<

“residence-sharing deduction” means a deduction of one

thousand Maltese liri per year granted in respect of the sharing

with students of one’s place of residence.

The provisions of these rules shall only apply if all the

conditions laid out herein are adhered to.

The net profit of a host family in respect of the hosting of

students, chargeable to tax for any year of assessment, shall be

determined according to the following formula>

G – (R + S)

where>

G means the gross payments received from a registered

school in respect of the hosting of students

R means the residence-sharing deduction

S is a deemed deduction for expenses equivalent to

65% of (G - R)

(1) Every registered school shall at all times maintain an Statement

submitted by

up-to-date record in respect of each host family to which it makes any registered schools.

payment for the hosting of students, showing the following details>

(a)

full name<

(b) address<

(c)

identity card (or income tax registration) number<

(d) date of payment<

(e)

gross amount paid<

(f)

registration number with the Malta Tourism Authority>

Provided that, in the case of a married couple, the details

mentioned in items (a) and (c) hereof shall be kept for both spouses.

(2) Every registered school shall, in respect of each year,

prepare and forward for the purposes of and in the manner set out in

paragraph (3) hereof and on the form supplied or approved by the

Commissioner, a complete and correct statement in triplicate which

shall be utilised as follows>

(a) two copies relating to the year 2005 shall be given to

the host family by the 31 st January of the following year, one copy

to be retained by the host family and the other copy to be forwarded

by the said host family to the Commissioner together with the return

required to be filed under articles 10 and 11 of the Income Tax

Management Act and similarly for each subsequent year<

(b) the third copy shall be retained by the registered school

for its own records.

(3) The statement referred to in paragraph (2) hereof shall

contain the personal particulars concerning the host family’s identity

and other information required for income tax purposes and shall show

the gross amount of the payments made to the host family in respect of

the hosting of students qualifying under these rules.

(4) Every registered school shall submit to the

Commissioner a statement in electronic format as approved by the

Commissioner showing the details prescribed in subrule (3) by the end

of January of the year following that for which the payments were made.

(5) Where a host family has not been provided by the

registered school with a statement in accordance with subrule (2), the

matter may be brought to the notice of the Commissioner who may

take remedial action accordingly> however, such omission on the part

of the registered school shall not release the host family from the

obligation to forward the return required to be filed under the provisions

of article 10 or 11 of the Income Tax Management Act.

Notwithstanding any other provision of the Act, a registered

school shall only be entitled to a deduction under article 14(1) of the

Act in respect of payments made to a host family for the hosting of

students, if the requirements of rule 5 hereof are satisfied in full.