PERSONAL RETIREMENT SCHEME RULES

SUBSIDIARY LEGISLATION 123.163

PERSONAL RETIREMENT SCHEME RULES

16th December, 2014

LEGAL NOTICE 468 of 2014, as amended by Legal Notices 117 and 241

of 2015, 113 of 2019 and 2 of 2021.

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

Scheme Rules.

(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 Retirement

Pensions 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;

"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

Business Act, or the Retirement Pensions Act or any other law or

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

These rules provide for the criteria to be satisfied by

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

qualifying scheme may only claim the tax credit referred to in

article 57 of the Act if the individual

(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 an retirement pension scheme, it is a

scheme that is registered under the Retirement

Pensions Act or any other law substituting that Act

and, in the case of a long term contract of insurance

issued by a licence holder, it provides for programmed

withdrawal of arrangements as provided for in pension

rules issued under the said Act or other law; and

(b) it provides for the commencement of payment benefits

to a qualifying individual on a date that is not earlier

than the date on which the individual attains the age of

sixty-one (61) and not later than the date when the

individual attains the age of seventy (70), except in

those cases where the scheme provides that the

payment is made by reason of the permanent disability

or death of the beneficiary; and

(c) it satisfies such further conditions as the

Commissioner may deem appropriate to impose.

(1) Each licence holder who wishes to receive

contributions or payments from a qualifying individual into a

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, 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.

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

terms of the the Retirement Pensions Act or the Insurance 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

c o n c e r n i n g t h e q u a l i f y i n g i n d i v i d u a l ’s i d e n t i t y a n d o t h e r

information required for income tax purposes, and the amount

contributed or paid by the qualifying individual to the qualifying

scheme.

The tax credit to which a qualifying individual is entitled in

terms of article 57 of the Act is twenty-five percent (25%) of the

aggregate amount of the qualifying contributions that he makes in

the year immediately preceding the year of assessment

Provided that the tax credit for any year of assessment may

not exceed seven hundred and fifty euro (€750).