GROUP DEDUCTIONS (INCOME TAX) RULES

GROUP DEDUCTIONS (INCOME TAX)

SUBSIDIARY LEGISLATION 123.205

GROUP DEDUCTIONS (INCOME TAX) RULES

1 st January 2022

LEGAL NOTICE 205 of 2022, as amended by Legal Notice 40 of

2023.

(1)

The title of these rules is the Group Deductions

(Income Tax) Rules.

(2)

These rules shall be deemed to have come into force as

from the year of assessment 2022.

In these rules, unless the context otherwise requires

"Act" means the Income Tax Act;

"allowable deductions" means capital allowances allowable as a

deduction under article 14(1)(f) and (j) of the Act to the extent that

such deduction cannot be given effect to in full because there are no

profits or gains chargeable for the year of assessment 2022 from the

source of income in respect of which they are allowable or because the

profits or gains chargeable from that source are less than the

deduction

Provided that unabsorbed capital allowances carried

forward from the year of assessment 2020 shall not be considered to be

allowable deductions for the purposes of these rules

Provided further that a balancing allowance in terms of

article 24 of the Act resulting in respect of the years of assessment

2021 and 2022 shall be treated in the same manner as capital

allowances for the purposes of these rules;

"beneficiary" means a company which has been granted a

benefit under the COVID-19 Fiscal Assistance - Postponement of

Payment of Certain Taxes Tax Deferral Scheme;

"total income" shall have the same meaning as assigned to it by

article 2(1) of the Act but shall be computed before any deduction is

made in terms of these rules.

Allowable deductions may be surrendered by a company,

hereinafter referred to as "the surrendering company", and, on the

making of a claim by another company, hereinafter referred to as "the

claimant company", be allowed to the claimant company as a

deduction against its total income

Provided that the total allowable deductions that may be

claimed shall not exceed one million euro (€1,000,000) per group of

companies and the total amounts surrendered in each year of

assessment shall be equal to the amounts so claimed in each year of

GROUP DEDUCTIONS (INCOME TAX)

assessment

Provided further that the total allowable deductions that

may be claimed by a claimant company in the year of assessment 2022

and in the year of assessment 2023 shall not exceed the claimant

company’s total income for the years of assessment 2022 and 2023

respectively

Provided further that the surrendering of allowable

deductions shall only be allowed if either the surrendering company or

the claimant company is a beneficiary.

Unless otherwise provided for under these rules, the

group relief provisions as defined in article 16 of the Act, except for

the provisions of article 18(1)(b), (c) and (d) as well as article 22 of the

Act, shall apply mutatis mutandis in relation to allowable deductions

according to these rules.