Personal Retirement Scheme Rules, 2014

L.N. 468 of 2014

INCOME TAX ACT

(CAP. 123)

Personal Retirement Scheme Rules, 2014

IN exercise of the powers conferred by articles 57 and 96 of the

Income Tax Act, the Minister for Finance has made the following

rules:-

(1) The title of these rules is the Personal Retirement

Scheme Rules, 2014.

(2) These rules shall come into force with effect from the year

of assessment 2015.

For the purposes of these rules

"the Act" means the Income Tax Act;

"the Commissioner" means the Commissioner for Revenue;

"European right" means the entitlement of an insurance

undertaking to establish a branch, or provide services, in a Member

State or an EEA State other than that in which it has its head office -

(a)

in accordance with the Treaty as applied in a

Member State or an EEA State; and

(b) subject to the requirements of the Single Market

Directive and subject to any regulations made under the Act, or

insurance rules issued by the competent authority pursuant to

the Act, implementing such requirements;

"licence holder" means a company registered, licensed or

authorised to administer retirement schemes under the Special Funds

(Regulation) Act, or any other law substituting the said Act, or to

carry on long term business under the Insurance Business Act or a

European Insurance Undertaking carrying on long term business of

insurance in Malta in exercise of a European right;

"long term business" means business of insurance of any of the

classes specified in the Second Schedule to the Insurance Business

Act;

"notice" means notice in writing and "notify" shall be construed

accordingly;

"personal retirement scheme" means a retirement scheme which

is not an occupational retirement scheme and to which contributions

are made for the benefit of an individual;

"qualifying contribution" means a contribution made to a

qualifying scheme in respect of which a credit against the income tax

chargeable in Malta may be claimed in terms of the Act;

"qualifying individual" means an individual who fulfils the

requirements of rule 4(1);

"qualifying scheme" means a personal retirement scheme or a

long term contract of insurance that fulfils the requirements of these

rules and which is approved by the Commissioner;

"year" means the year immediately preceding a year of

assessment unless the context otherwise requires;

unless otherwise defined, terms and expressions used in these rules

shall have the meaning assigned to them in the Act, the Insurance Cap. 403.

Business Act, or the Special Funds (Regulation) Act or any other law Cap. 450.

or laws substituting it or them, as the case may be.

These rules provide for the criteria to be satisfied by Introductory.

qualifying schemes and also lays down the criteria for individuals to

make qualifying contributions to qualifying schemes.

(1) An individual contributing or making payments to a General

qualifying scheme may only claim the tax credit referred to in article conditions

qualifying

57 of the Act if the individual

individuals.

(a)

is eighteen years of age or over at the time when a

contribution or payment to a qualifying scheme is made; and

(b) is domiciled and, or resident for tax purposes in

Malta; and

(c)

is in possession of a certificate issued by the licence

holder administering the qualifying scheme where the

administrator confirms that

(i) all the details required under sub-rule (3)

have been provided by the individual, and

(ii) the qualifying scheme satisfies all the

requirements referred to in rule 5; and

(d)

is included in the statement referred to in rule 7(2).

(2) When a qualifying individual intends to make any claim

for a credit against the income tax chargeable in Malta in a particular

year in relation to contributions or payments to a qualifying scheme,

such individual must lodge an application with a licence holder who

administers a qualifying scheme, which application need only be

made in the year in which the qualifying individual first subscribes to

that qualifying scheme.

(3) Such

an

application

shall

include

the

following

information

(a)

the first year of assessment to which the application

relates,

(b) a declaration that all contributions or payments to be

made to the qualifying scheme shall be from the applicant’s own

assets or those of applicant’s spouse, and not of any other

person,

(c)

a declaration that the individual is ordinarily

resident for tax purposes in Malta, and that the applicant will

inform the licence holder if he ceases to be so ordinarily

resident,

(d)

the applicant’s full name,

(e)

the applicant’s residential address,

(f)

the applicant’s tax registration number or the tax

registration number of the applicant’s spouse,

(g)

the applicant’s identity card or passport number, and

(h)

the applicant’s date of birth.

A qualifying scheme shall be one which satisfies the

following conditions

(a)

in the case of a personal retirement scheme, a

scheme that is registered under the Special Funds (Regulation)

Act or any other law substituting the said Act; or

(b)

in the case of a long term contract of insurance -

(i) it provides for the commencement of payment

of benefits to a qualifying individual at an age not earlier

than fifty or not later than the date when the individual

attains the age of seventy or any other age specified in

pension rules applicable to personal retirement schemes in

terms of the Special Funds (Regulation) Act or any other Cap. 450.

law substituting the said Act, except in those cases where

the long term contract of insurance provides that the

payment is made by reason of the permanent invalidity or

death of the beneficiary;

(ii) is not in conflict with the retirement

directives and, or pension rules applicable to personal

retirement schemes issued by the Malta Financial Services

Authority in terms of the Special Funds (Regulation) Act Cap. 450.

or any law substituting the said Act;

(c)

all payments received by qualifying individuals

from the long term contracts of insurance mentioned in this sub-

rule, other than any capital sum received by way of

commutation of a pension which may be exempt from taxation

in accordance with the provisions of article 12(1)(h) of the Act,

constitute pension income for the purposes of article 4(1)(d) of

the Act.

(1) Each licence holder who wishes to receive Notification to

contributions or payments from a qualifying individual into a the

Commissioner.

qualifying scheme shall notify the Commissioner in writing prior to

accepting such contributions or payments.

(2) Where the qualifying scheme is a long term contract of

insurance, the notification referred to in sub-rule (1) shall include

(a)

a declaration by the licence holder that the long term

contract of insurance satisfies the conditions referred to in rule

5(b), and

(b) an undertaking by the licence holder that he shall

inform the Commissioner within fourteen days of any

subsequent change which would result in the long term contract

of insurance no longer satisfying any of the conditions referred

to in rule 5(b).

(3) A licence holder who shall cease to be a licence holder in

terms of the Special Funds (Regulation) Act or the Insurance Cap. 450.

Business Act, or ceases to carry on long term business in Malta in

exercise of a European right, shall notify the Commissioner promptly,

and in any case not later than fourteen days from the date when the

licence holder ceases to hold a licence in terms of the Special Funds

(Regulation) Act or the Insurance Business Act or from when it

ceases to exercise such European right.

(4) A license holder shall at all times keep sufficient records in

respect of qualifying individuals to enable the requirements of these

rules to be satisfied, including full name, address, and legally valid

identification document (or income tax registration) number of each

individual, and details of both spouses in the case of a married couple.

(1) The Commissioner may, after giving due notice,

require any person who is or who at any time has been a license

holder who administers or who administered a qualifying scheme, or

a qualifying individual, to furnish him within such time (not being

less than fourteen days) as may be provided by the notice, such

information about any qualifying scheme (including copies of or

extracts from any books or other records) as the Commissioner may

reasonably require for the purposes of these rules or to make available

for inspection, at a place within Malta, all relevant documents which

are in the possession or under the control of a licence holder, a

qualifying scheme, or a qualifying individual.

(2) Every licence holder shall, by the end of January of the

year following that in which the contributions or payments were

made, submit to the Commissioner a statement in electronic format as

approved by the Commissioner showing the personal particulars

concerning the qualifying individual’s identity and other information

required for income tax purposes, and the amount contributed or paid

by the qualifying individual to the qualifying scheme.

€0.45