on Documents and Transfers on Certain Property Transfers

L.N. 11 of 2022

INCOME TAX ACT

(CAP. 123)

DUTY ON DOCUMENTS AND TRANSFERS ACT

(CAP. 364)

Relief from Income Tax and from Duty

on Documents and Transfers on Certain Property Transfers

(Amendment) Rules, 2022

IN EXERCISE of the powers conferred by articles 12(2) and 96

of the Income Tax Act and article 22A of the Duty on Documents and

Transfers Act, the Minister for Finance and Employment has made the

following rules:-

The title of these rules is the Relief from Income Tax and Citation.

from Duty on Documents and Transfers on Certain Property Transfers

(Amendment) Rules, 2022 and these rules shall be read and construed

as one with the Relief from Income Tax and from Duty on Documents S.L. 123.203.

and Transfers on Certain Property Transfers, Rules, hereinafter S.L. 364.19.

referred to as "the principal rules".

Rule 2 of the principal rules shall be amended as follows

Amends rule 2

of the principal

rules.

(a) immediately after the definition "income tax" there

shall be added the following new definition

" "Planning Authority" means the planning

authority established under the Development Planning

Act;";

(b) in the definition "transfer value", the words "the

consideration for the transfer." shall be substituted by the words

"the consideration for the transfer;" and immediately thereafter

there shall be inserted the following new definition

" "transferable unit" means property having an

identified delineated boundary and includes a defined

airspace or area of subsoil.".

Rule 3 of the principal rules shall be amended as follows

Amends rule 3

of the principal

rules.

(a)

the proviso to sub-rule (1) thereof shall be substituted

by the following new proviso

"Provided that no relief from income tax and

from duty on documents and transfers shall be allowed in

terms of this rule where the transfer is made to a person

who requires a permit by the Minister for the purposes of

the Immovable Property (Acquisition by Non-Residents)

Act or who would have required such permit had the

property acquired not been situated in a special

designated area."; and

(b) in sub-rule (2) thereof, immediately after the words

"The relief mentioned in sub-rule (1) shall be allowed only as

long as" there shall be added the words "all the parties entitled to

it declare that they wish to claim the relief and the notary who

publishes the deed makes a record of that declaration in the deed,

and as long as".

Rule 4 of the principal rules shall be amended as follows

(a)

sub-rule (1) thereof shall be amended as follows

(i) immediately after paragraph (b) thereof there

shall be added the following new paragraph

"(ba) the parties to the deed of the transfer or

any of them produce a Planning Authority site plan of

the property with an indication of the boundaries of

the site as plotted by the Planning Authority and an

indication inserted by an architect of the distance of

the property from the nearest street corner;";

(ii) in paragraph (c) thereof, the words "relating the

date of the completion" shall be substituted by the words

"relating to the date of the completion" and the words "such

further or alternative evidence" shall be substituted by the

words "such further or alternative documents and

evidence"; and

(iii) in paragraph (d) thereof, the words "the reports

and evidence mentioned in sub-paragraph (c)" shall be

substituted by the words "the documents and evidence

mentioned in paragraphs (ba) and (c)"; and

(b) immediately after sub-rule (1) thereof there shall be

added the following new sub-rule

"(2) When there is a transfer to which this rule

applies, and the owner subsequently transfers a divided part

of the property in question, the latter transfer shall not be

treated as a transfer to which this rule applies.".

Rule 5 of the principal rules shall be amended as follows

Amends rule 5

of the principal

rules.

(a)

sub-rule (1) thereof shall be amended as follows

(i) immediately after paragraph (a) thereof there

shall be added the following new paragraph

"(aa) the parties to the deed of the transfer or

any of them produce a Planning Authority site plan of

the property with an indication of the boundaries of

the site as plotted by the Planning Authority and an

indication inserted by an architect of the distance of

the property from the nearest street corner;";

(ii) in paragraph (b) thereof, the words "by the

Planning Authority established under the Development

Planning Act and, or such further or alternative evidence"

shall be substituted by the words "by the Planning

Authority and, or such further or alternative documents and

evidence"; and

(iii) in paragraph (c) thereof, the words "in sub-

paragraph (b)" shall be substituted by the words "in

paragraphs (aa) and (b)"; and

(b) immediately after sub-rule (1) thereof there shall be

added the following new sub-rule

"(2) When there is a transfer to which this rule

applies, and the owner subsequently transfers a divided part

of the property in question, the latter transfer shall not be

treated as a transfer to which this rule applies.".

Rule 6 of the principal rules shall be substituted by the Substitutes rule

6 of the

following new rule

principal rules.

" Forfeiture of

6. (1) The relief from income tax and from

the relief from

income tax and duty on documents and transfers mentioned in rule 3 shall

from duty on be subject to the condition that, at any date after the

documents and

transfer, but not after the date when the property is

transferred again inter vivos or causa mortis

(a) the property is not demolished; and

(b) the property is not subjected to structural

alterations or additions as a result of which it is

divided into more transferable units than the

number of transferable units that comprised the

property at the time of the transfer; and

(c) no permit is issued by the Planning

Authority, upon an application made by the owner

who benefitted from the said relief, for the

demolition of the property or for works described in

paragraph (b); and

(d) no transfer is made of any divided part

of that property.

(2) If the condition mentioned in sub-rule (1) is in

any way breached, the relief from income tax and from

duty on documents and transfers granted by these rules on

the said transfer shall be forfeited and the total of the

amount of such income tax and duty that was so relieved

shall become payable to the Commissioner forthwith.

(3) The person who acquired the property at the

time that the relief from income tax and from duty on

documents and transfers was allowed shall be liable for

the payment of the amount mentioned in sub-rule (2).".

In rule 7 of the principal rules, the words "payable the

first" shall be substituted by the words "payable on the first".

Rule 11 of the principal rules shall be amended as follows

(a) in sub-rule (1) thereof, the words "approval of the

development:" shall be substituted by the words "approval of the

development, but not after the date when the property is

transferred again inter vivos or causa mortis:";

(b) in the Maltese version of sub-rule (2) thereof, the

words "jekk ikun ksur ta’ xi kondizzjoni imposta mill-awtorità

kompetenti għall-approvazzjoni tal-iżvilupp, il-ħelsien mit-taxxa

fuq dokumenti u trasferimenti fuq l-imsemmi trasferiment

għandu jiintilef" shall be substituted by the words "jekk ikun

hemm ksur ta’ xi kondizzjoni imposta mill-awtorità kompetenti

għall-approvazzjoni tal-iżvilupp, il-ħelsien mit-taxxa fuq

dokumenti u trasferimenti fuq l-imsemmi trasferiment għandu

jintilef"; and

(c) sub-rule (3) thereof shall be substituted by the

following new sub-rule

"(3) The person who is the owner of the property at

the time that the approval of the development is granted

shall be liable for the payment of the amount mentioned in

sub-rule (2).".

In sub-rule (2) of rule 13 of the principal rules, the words Amends rule 13

"mentioned in sub-rule (1)." shall be substituted by the words of

"mentioned in sub-rule (1):" and immediately thereafter there shall be

added the following new proviso

"Provided that the notary publishing any such

subsequent deed of transfer shall not be liable for any tax not so

collected by reason of the said failure or breach on any

subsequent deed and the other party to the deed shall not be

liable for any such breach by the said person and may continue to

benefit from the said exemptions granted under this rule.".

Immediately after rule 13 of the principal rules there shall Adds new rules

be added the following new rules

Notwithstanding the other provisions of these

rules, when a transfer of property to which rule 4, 5 or 8

applies is made to a company, and that company then

transfers the property to another company by means of a

transfer that is relieved from income tax and from duty on

documents and transfers in terms of articles 5(9) and

5A(4)(f) of the Income Tax Act and article 32(6) of the

Duty on Documents and Transfers Act, the condition

mentioned in sub-rule (1) of rule 6 or the conditions

mentioned in sub-rule (1) and (2) of rule 11, as the case

may be, shall continue to apply as if the latter transfer has

not taken place, and in the event of a breach in any way of

any applicable condition, the two companies shall be

jointly and severally liable for the payment of the amount

mentioned in sub-rule (2) of rule 6 or in sub-rule (2) of

rule 11, as the case may be.

(1) The Commissioner shall inform the

Planning Authority of every transfer of property on which

Commissioner

when a permit income tax and, or duty on documents and transfers has

been relieved in accordance with rule 3, and the

competent authority shall inform the Planning Authority

of every approval of a development that it issues in

accordance with rule 9.

(2) The Planning Authority shall inform the

Commissioner whenever it issues a permit for the

demolition of property in respect of which it has received

information as provided in sub-rule (1) or for works that

involve structural alterations or additions as a result of

which that property may be divided into more

transferable units than the number of transferable units

that comprised the property at the time of the transfer or

more than the number of units included in the approved

development, as the case may be.

(1) Any amount that becomes payable to the

becomes due Commissioner on account of a breach of a condition as

in terms of rule

provided in rule 6 or rule 11 shall be deemed as an

amount that was due by the person liable for the payment

thereof in terms of the said rules on the date when the

condition in question was breached and shall be payable

forthwith upon demand of the Commissioner with interest

running from the said date at the rate determined in

accordance with the Income Tax (Rate of Interest) Rules.

(2) Sub-rule (1) shall be without prejudice to any

further liability of any person arising in terms of any

provision of the Income Tax Acts or the Duty on

Documents and Transfers Act in connection with the

transfer of the property in question, sohowever that the

breach of a condition set out in the said rules 6 and 11

shall not, of itself, be treated as giving rise to any such

further liability.".

€0.54