Deductions (Euro Related Expenditure) Rules, 2007

L.N. 93 of 2007

INCOME TAX ACT

(CAP. 123)

Deductions (Euro Related Expenditure) Rules, 2007

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

the Income Tax Act, the Prime Minister and Minister of Finance has

made the following rules:-

The title of these rules is the Deductions (Euro Related Citation.

Expenditure) Rules, 2007.

In these rules, unless the context otherwise requires

Definitions.

"equipment" means cash registers, point of sale systems and

weighing scales and any other electronic equipment displaying or

storing monetary amounts;

"qualifying person" means a person to whom rule 3 applies.

These rules shall apply to any person who

Scope.

(a)

carries on a trade, business, profession or vocation

and is registered under the Value Added Tax Act where the Cap. 406.

economic activity in which he is engaged is an activity in

respect of which he is required to be so registered; and

(b) incurs expenditure in purchasing, installing,

modifying or enhancing any equipment between the 1 st January,

2006 and the 31 st December, 2007 to enable the proper

discharge of the business in euro currency as from the date when

the euro becomes legal tender.

(1) Where a qualifying person incurs expenditure in Deduction.

accordance with the provisions of rule 3, a deduction equivalent to

two hundred per cent (200%) of the cost, excluding VAT, shall be

allowed against the said person’s income chargeable to tax for the

year of assessment 2008

Provided that, in the case of a company, where the cost

referred to in this rule is incurred during the year preceding the year

of assessment 2009, the said deduction shall be allowed against the

income chargeable to tax for the year of assessment 2009.

(2) Where a deduction is claimed under these rules, no

deduction in respect of wear and tear may be claimed in respect of the

same equipment and the deduction referred to in sub-rule (1) shall be

reduced by any deductions for wear and tear claimed prior to the year

of assessment 2008 on the said equipment

Provided that, in the case of companies to which the

proviso to sub-rule (1) applies, the deduction allowed under these

rules shall be reduced by any deductions for wear and tear claimed

prior to the year of assessment 2009.

(3) The deduction claimed under these rules as aforesaid in

respect of each qualifying person shall not exceed one thousand liri.

(1) Where expenditure referred to in rule 3(b) is made in

respect of the purchase of a new cash register, notification of such

purchase shall be made to the Commissioner of VAT on an

application form as the said Commissioner of VAT may require.

(2) The deduction provided for in rule 4 shall only be allowed

where the notification referred to in sub-rule (1) has been made in the

manner stipulated in the said sub-rule.

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