Tax on Property Transfers (Amendment) Rules, 2017

L.N. 68 of 2017

INCOME TAX ACT

(CAP. 123)

Tax on Property Transfers (Amendment) Rules, 2017

IN exercise of the powers conferred by articles 5A and 96 of the

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

The title of these rules is the Tax on Property Transfers

(Amendment) Rules, 2017, and these rules shall be read and

construed as one with the Tax on Property Transfers Rules,

hereinafter referred to as "the principal rules".

In sub-rule (1) of rule 5 of the principal rules, for the words

"is less than the value" there shall be substituted the words "is higher

Rule 7 of the principal rules shall be amended as follows

(a) for sub-rule (1) thereof, there shall be substituted the

"(1) The transfer value of an emphyteutical

concession and of a concession of any other right over

property shall be the higher of (i) the premium or any other

capital sum payable for the concession and (ii) the sum

determined as follows

(a)

in the case of a concession of perpetual

emphyteusis, the market value that the property in

question would have if it was not subject to

emphyteusis reduced by a sum equal to twenty

times the annual ground rent, disregarding any

adjustments to which the said ground may be

subject to in terms of the relative deed;

(b)

in any other case, the premium or any

other capital sum that would be payable if the

concession were granted on the open market, after

taking into account the ground rent or other

periodical payment and all the other terms of the

actual concession.";

(b) for sub-rule (3) thereof, there shall be substituted the

following

"(3) For the purposes of article 5A of the Act, the

acquisition value of an emphyteutical concession for a

period that does not exceed fifty years and the acquisition

value of a concession of any other right over property shall

be deemed to be zero.";

(c)

in sub-rule (5) thereof, for the words "at the time of

the redemption" there shall be substituted the words "at the time

immediately preceding the redemption";

(d) for sub-rule (6) thereof, there shall be substituted the

following

"(6) For the purposes of article 5A of the Act, and

except as provided in sub-rule (5), the cost of acquisition

of property in the case where there is a redemption of the

ground rent or of any other right over that property shall be

deemed to be zero.";

(e)

immediately after sub-rule (6) thereof there shall be

added the following new sub-rules

"(6A) When a person who had acquired property

under a title of perpetual emphyteusis or an emphyteusis

that had been granted for a period exceeding fifty years

("the original acquisition") acquires also the directum

dominium perpetuum ("the second acquisition"), and he

subsequently transfers that property, the date of the second

acquisition shall be disregarded and that person shall be

deemed to have acquired the transferred property on the

date of the original acquisition.

(6B) When a person who had acquired property

under a title of emphyteusis that had been granted for a

period of fifty years or less ("the original acquisition")

acquires also the directum dominium for the remaining

period as well as the full ownership ("the second

acquisition"), and he subsequently transfers that property,

the date of the original acquisition shall be disregarded and

that person shall be deemed to have acquired the

transferred property on the date of the second

acquisition.";

(f)

in sub-rule (7) thereof, for the words "equivalent to

12%" there shall be substituted the words "equivalent to 10%";

and

(g) immediately after sub-rule (13) thereof there shall

be added the following new sub-rule

"(14) Notwithstanding the provisions of articles

5(5)(g) and 5A(4)(i) of the Act, an assignment of property

on emphyteusis for a period of fifty years or less shall not

be exempt from the tax chargeable under article 5A of the

Act.".

Paragraph (b) of rule 12 of the principal rules shall be

substituted by the following

"(b) any onerous acquisitions inter vivos shall be deemed

to have taken place before 1 January 2004: provided that this

paragraph shall not apply if all the acquisitions were onerous

acquisitions inter vivos that took place on or after 1 January

2004.".

Sub-rule (3) of rule 20 of the principal rules shall be

amended as follows

(a) in paragraph (d) thereof, for the words "the

accounting costs" there shall be substituted the words "the

development, administrative and other costs"; and

(b)

in paragraph (e) thereof -

(i) for the words "a portion of the general

development costs that cannot be allocated" there shall be

substituted the words "a portion of the costs referred to in

paragraph (d) to the extent that they cannot be allocated";

and

(ii) for the words "the said general development

costs" there shall be substituted the words "the said costs".

Rule 21 of the principal rules there shall be amended as

(a)

for sub-rule (2) thereof, there shall be substituted the

following

"(2) Subject to sub-rule (4), when the tax in

respect of a transfer of property is chargeable under article

5A of the Act, the profits that a company is required to

allocate to the final tax account shall be equal to the

consideration for that transfer after deducting

(a) the acquisition value and brokerage

fees, if any, determined in accordance with these

rules;

(b) the development, administrative and

other costs determined in accordance with rule 20;

and

(c) the tax chargeable on the property

transfer in terms of article 5A of the Act."; and

(b) immediately after sub-rule (2) thereof, there shall be

added the following new sub-rules

"(3) Subject to sub-rule (4), in the case of a

transfer of property which gives rise to profits on which

tax is chargeable in terms of article 27G of the Act, the

amount that a company is required to allocate to the final

tax account shall be equal to the profit on that transfer as

determined in accordance with sub-article (2) of the said

article after deducting the tax chargeable on that profit.

(4) The amount to be allocated to the final tax

account in terms of sub-rules (2) or (3) shall in no case be

less than zero.".

Rule 22 of the principal rules shall be amended as follows: Amends rule 22

of the principal

rules.

(a)

sub-rules (1), (2), (3), (4), (6), (7), (8) and (10)

thereof shall be deleted;

(b)

sub-rule (5) thereof shall be renumbered as sub-rule

(1);

(c)

sub-rule (9) thereof shall be renumbered as sub-rule

(2); and

(d) immediately after sub-rule (2) thereof, as

renumbered, there shall be added the following new sub-rule

"(3) Without prejudice to the generality of the

provisions of article 5A(12)(a) of the Act, the facts that the

parties to a transfer are obliged to declare to the notary

publishing the deed of transfer in terms of that article shall

include all the information that the notary is required to

provide on the form referred to in sub-rule (2).".

Immediately after rule 24 of the principal rules, there shall

be added the following new rule

" Applicability

The provisions of rule 10 of the

of rule 10 of

Capital Gains Rules (Transfer of property by

the Capital

persons about to leave Malta) shall apply to

Gains Rules.

transfers of property to which article 5A of the

Act applies.".

9. In Schedule H to the principal rules, for the words

"Amount remitted with this Notice (12% of the amount deposited)"

there shall be substituted the words "Amount remitted with this

Notice (10% of the amount deposited)".

10. Schedules A, B, C, D and F to the principal rules shall be

deleted.

€0.45