HOSTING OF STUDENTS (INCOME TAX) RULES

HOSTING OF STUDENTS (INCOME TAX)

SUBSIDIARY LEGISLATION 123.93

HOSTING OF STUDENTS (INCOME TAX) RULES

1st January 2007

LEGAL NOTICE 142 of 2006, as amended by Legal Notices 409 of 2007,

57 of 2009 and 426 of 2012.

The title of these rules is the Hosting of Students (Income

Tax) Rules.

In these rules, unless the context otherwise requires

"the Act" means the Income Tax Act;

"host family" means any individual who is registered with the

Malta Tourism Authority for the purpose of hosting of students;

"registered school" means any school or entity registered with

the Department of Education to act as a language school;

"residence-sharing deduction" means a deduction of three

thousand and five hundred euro (€3,500) per year granted in respect

of the sharing with students of one’s place of residence.

The provisions of these rules shall only apply if all the

conditions laid out herein are adhered to.

The net profit of a host family in respect of the hosting of

students, chargeable to tax for any year of assessment, shall be

determined according to the following formula

G - (R + S)

where

G means the gross payments received from a

registered school in respect of the hosting of students

R means the residence-sharing deduction

S is a deemed deduction for expenses equivalent to

65% of (G - R).

(1) Every registered school shall at all times maintain an

up-to-date record in respect of each host family to which it makes

any payment for the hosting of students, showing the following

details

(a) full name;

(b) address;

(c) legally valid identification document (or income tax

registration) number;

(d) date of payment;

(e) gross amount paid;

(f)

registration number with the Malta Tourism Authority

Provided that, in the case of a married couple, the details

mentioned in paragraphs (a) and (c) shall be kept for both spouses.

HOSTING OF STUDENTS (INCOME TAX)

(2) Every registered school shall, in respect of each year,

prepare and forward for the purposes of and in the manner set out in

subrule (3) and on the form supplied or approved by the

Commissioner, a complete and correct statement in triplicate which

shall be utilised as follows

(a) two copies relating to the year 2005 shall be given to

the host family by the 31st January of the following

year, one copy to be retained by the host family and

the other copy to be forwarded by the said host family

to the Commissioner together with the return required

to be filed under articles 10 and 11 of the Income Tax

Management Act and similarly for each subsequent

year;

(b) the third copy shall be retained by the registered

school for its own records.

(3) The statement referred to in subrule (2) shall contain the

personal particulars concerning the host family’s identity and other

information required for income tax purposes and shall show the

gross amount of the payments made to the host family in respect of

the hosting of students qualifying under these rules.

(4) Every registered school shall submit to the Commissioner a

statement in electronic format as approved by the Commissioner

showing the details prescribed in subrule (3) by the end of January

of the year following that for which the payments were made.

(5) Where a host family has not been provided by the registered

school with a statement in accordance with subrule (2), the matter

may be brought to the notice of the Commissioner who may take

remedial action accordingly; however, such omission on the part of

the registered school shall not release the host family from the

obligation to forward the return required to be filed under the

provisions of article 10 or 11 of the Income Tax Management Act.

Notwithstanding any other provision of the Act, a

registered school shall only be entitled to a deduction under article

14(1) of the Act in respect of payments made to a host family for

the hosting of students, if the requirements of rule 5 hereof are

satisfied in full.