Final Settlement System (FSS) (Amendment) Rules, 2020

L.N. 246 of 2020

INCOME TAX MANAGEMENT ACT

(CAP. 372)

Final Settlement System (FSS) (Amendment) Rules, 2020

IN EXERCISE of the powers conferred by articles 23 and 58 of

the Income Tax Management Act, the Minister for Finance and

Financial Services has made the following rules:-

(1) The title of these rules is the Final Settlement System Citation and

(FSS) (Amendment) Rules, 2020 and these rules shall be read and commencement.

construed as one with the Final Settlement System (FSS) Rules, S.L. 372. 14.

hereinafter referred to as "the principal rules".

(2) These rules shall be deemed to have come into force on 1

January 2020.

In rule 2 of the principal rules, immediately after the Amends rule 2

definition "payer" there shall be added the following new definition

" "qualifying overtime income" shall have the

meaning as assigned to it in the Tax on Overtime Rules;".

Immediately after paragraph (b) of rule 6 of the principal Amends rule 6

rules there shall be added the following new paragraph

"(bb) the FSS Overtime Tax Deduction Method, in the

manner provided under rule 7A;".

Immediately after rule 7 of the principal rules there shall be Adds new rule

added the following new rule

(1) When a payer pays emoluments that

"Application

of the FSS

represent qualifying overtime income he shall deduct

Overtime Tax

Deduction

from them tax at the rate of fifteen cents (€0.15) of every

Method.

one euro (€1).

(2) Saving the other provisions of this rule -

(a) qualifying overtime income from which

tax has been so deducted shall not form part of the

payee’s chargeable income and shall not be

declared by that individual in any return filed in

accordance with article 10 of the Act;

(b) the tax deducted in accordance with this

rule shall be final and shall not be available as a

credit or set off against the tax liability of any

person or as a refund.

(3) A payee may, at any time, give instructions to

the payer not to apply the FSS Overtime Tax Deduction

Method to his overtime income and may, at any time,

revoke such instructions. A notice for the purpose of this

sub-rule shall be given in writing on such form as may be

approved by the Commissioner.

(4) Instructions given to a payer in accordance

with this rule shall have effect as from the date when the

notice giving such instructions is delivered to the payer

and shall cease to have effect as from the date on which

the notice of revocation is delivered to the payer.

(5) Any income derived for overtime that a payee

performs while instructions given as aforesaid have

effect shall not be treated as qualifying overtime income

and the provisions these rules shall apply in respect of

such income without reference to sub-rules (1) and (2)

and without reference to article 90B of the Income Tax

S.L. 123. 200. Act and to the Tax on Overtime Rules.

(6) A payee may, if he so elects, declare

qualifying employment income from which tax has been

deducted in accordance with sub-rule (1) in a return filed

in accordance with article 10 of the Act together with his

other income for the year of assessment in question, and

in that case that income shall be treated as part of the

payee’s chargeable income and subject to tax at the rates

applicable to that payee in accordance with article 56 of

the Income Tax Act without reference to article 90B of

that Act. Any tax deducted from the qualifying overtime

income in such a case shall be available for set-off in

accordance with rule 26.

(7) When an individual to whom article 12A of

the Act applies derives qualifying overtime income, and

it results to the Commissioner that an election mentioned

in sub-rule (6) produces a benefit to that individual, sub-

rule (6) shall apply as if that individual has made that

election and declared that qualifying overtime income in

a return filed in accordance with article 10 of the Act.".

5. Rule 20 of the principal rules shall be amended as follows

Amends rule 20

of the principal

rules.

(a) immediately after paragraph (b) thereof there shall be

added the following new paragraph

"(bb) the gross amount of emoluments paid to the

payees that represents qualifying overtime income;" ; and

(b) immediately after paragraph (d) thereof there shall be

added the following new paragraph

"(dd) the total amount of tax deducted in respect of

the income referred to under paragraph (bb);".

6. Sub-rule (2) of rule 21 of the principal rules shall be Amends rule 21

of the principal

amended as follows

rules.

(a) immediately after paragraph (a) thereof there shall be

added the following new paragraph

"(aa) the gross amount of emoluments paid to the

payee that represents qualifying overtime income and the

total number of hours of overtime in respect of which that

income was paid;"; and

(b) immediately after paragraph (c) thereof there shall be

added the following new paragraph

"(cc) the tax deducted in respect of the income

referred to under paragraph (aa);".

7. Sub-rule (2) of rule 22 of the principal rules shall be Amends rule 22

of the principal

amended as follows

rules.

(a) immediately after paragraph (b) thereof there shall be

added the following new paragraph

"(bb) the gross amount of emoluments paid to the

payees that represents qualifying overtime income;"; and

(b) immediately after paragraph (d) thereof there shall be

added the following new paragraph

"(dd) the total amount of tax deducted in respect of

income referred to under paragraph (bb);".

In the proviso of rule 26 of the principal rules, the words Amends rule 26

"shall be refunded." shall be substituted by the words "shall be of

rules.

refunded:"; and immediately thereafter there shall be added the

following new proviso

"Provided further that tax deducted under the FSS

Overtime Tax Deduction Method shall only be available for set-

off in the circumstances mentioned in rule 7A(6) and (7).".

€0.36