PAYMENT OF PROVISIONAL TAX (P.T.) RULES

SUBSIDIARY LEGISLATION 372.18

PAYMENT OF PROVISIONAL TAX (P.T.) RULES

21st March, 2000

LEGAL NOTICE 48 of 2000, as amended by Legal Notices 204 and 268

of 2002, 425 of 2007, 426 of 2012, 304 of 2019 and 99 of 2022.

The title of these rules is the Payment of Provisional Tax

(P.T.) Rules.

Amended by

L.N. 425 of 2007;

(Rule 10)

L.N. 426 of 2012.

P.T. REDUCTION FORM

In terms of rule 10 of the Payment of Provisional Tax (PT.) Rules, I opt to reduce

the amount payable as provisional tax for the basis period ending ........................ .

I estimate that the current year liability for the said basis period will be € ......... .

I declare that I am aware of the provisions of the said Rules and I understand that

I shall become liable to additional tax of 1% on any unpaid P.T. for each calendar

month or part thereof during which such provisional tax remains unpaid.

Name of P.T. payer

R e f e r e n c e N o . / L e g a l l y Va l i d

Identification Document Number.

Address

Date

Signature

Permit No.*

*(only in case of persons who, in accordance with the provisions of article 11(2) of the

Income Tax Act have been permitted to make their accounts to a date other than 31

December)

(1)

In these rules, unless the context otherwise requires

"Act" means the Income Tax Management Act;

"basis period" means a period of twelve months ending on the

31st December or, in the case of a provisional tax payer who has

been permitted to make his accounts to any other date in

accordance with the provisions of article 11(2) of the Income Tax

Act, on such other date;

"benchmark year of assessment" with respect to a basis period

means the later of

(a) the year of assessment 1999; and

(b) the last year of assessment in respect of which a tax

return was due to be furnished before the

commencement of the calendar year in which the first

P.T. payment for that basis period falls due;

"provisional tax" means provisional tax paid or payable in

accordance with these rules or with the Payment of Provisional Tax

(P.T.) Rules, 1973;

"provisional tax payer" means and includes, unless the

Commissioner otherwise determines by means of a notice in

writing, any person who during a basis period is

(a) a company;

(b) an individual who was liable to tax in Malta for the

relative benchmark year of assessment but excluding

an individual who was eligible to make an election in

terms of article 12 of the Act in respect of the

benchmark year of assessment;

(c) a person who is not a company or an individual;

"P.T. benchmark" means the amount determined in accordance

with rule 6, 7, 8 or 9 as may be applicable;

"P.T. payment" means a payment of provisional tax required to

be effected in terms of rule 3.

(2) Except as otherwise provided, and unless the context

otherwise requires, words and expressions used in these rules have

the same meaning and the same interpretation as the meanings and

interpretations which they have in terms of the Act and of the

Income Tax Act.

(1) Every provisional tax payer shall effect payments of

provisional tax during every basis period ending on or after the 31st

January, 2000 on account of his liability to tax for the year of

assessment commencing on the 1st January of the year immediately

following that during which the said basis period ends.

(2) P.T. payments shall be made in the amounts and within the

times prescribed in these rules or as otherwise notified by the

Commissioner under the provisions of article 11(4) of the Income

Tax Act.

(3) The amount of any P.T. payment due under these rules shall

be the amount determined in accordance with the applicable

provisions rounded up or down to the nearest euro.

(1) P.T. payments fall due on the 30th April, 31st August

and 21st December of each basis period.

(2) The first P.T. payment for a basis period of a provisional

tax payer is that which falls due on that of the said three dates

which comes first during that basis period and the order of the other

P.T. payments is regulated accordingly.

Save as otherwise provided in these rules the total of the

P.T. payments during a basis period shall not be less than the P.T.

benchmark applicable at the time the third P.T. payment falls due

and shall be paid as follows

(a) at least twenty percent of the P.T. benchmark shall be

paid by the date on which the first P T. payment falls

due;

(b) at least a further thirty percent of the P.T. benchmark

shall be paid by the date on which the second P.T.

payment falls due

Provided that where the P.T. benchmark resulting

from the operation of rule 6(3) or rule 6(4) is higher

than that which had been determined in accordance

with rule 6(1) or rule 7, then the amount of provisional

tax which shall be paid by the date on which the

second P.T. payment falls due shall be at least fifty

percent of the P.T. benchmark as determined by rule

6(3) or 6(4) but subtracting therefrom any P.T.

payments already made for the basis period;

(c) at least a further fifty percent of the P.T. benchmark

shall be paid by the date on which the third P.T.

payment falls due

Provided that where the P.T. benchmark resulting

from the operation of rule 6(3) or rule 6(4) is higher

than that which had been determined in accordance

with rule 6(1) or rule 7, then the amount of provisional

tax which shall be paid by the date on which the third

P.T. payment falls due shall be the full P.T. benchmark

as determined by rule 6(3) or 6(4) but subtracting

therefrom any P.T. payments already made for the

basis period.

(1) Save as otherwise provided in these rules the P.T.

be nc h m ar k o f a p r ov i si on a l t ax pa y er f or a b asi s p er i o d i s

determined by taking the amount of tax payable, if any, for the

benchmark year of assessment as shown in the self assessment of

that provisional tax payer for that year and computed in accordance

with the provisions of article 10(2) of the Act and adding back

provisional tax taken into account in the said self assessment.

(2) For the purpose of sub-rule (1) no account shall be taken of

any further return submitted in accordance with article 13 of the

Act after the commencement of the month immediately preceding

that in which the first P.T. payment for the basis period in question

falls due.

(3) Where the Commissioner has made an assessment of the

chargeable income of a provisional tax payer in terms of article

31(5) of the Act for any benchmark year of assessment and has

given notice of that assessment to that provisional tax payer before

the commencement of the month in which a P.T. payment falls due,

the P.T. benchmark shall be arrived at by taking the amount of tax

shown as payable in that assessment and adding back any

provisional tax taken into account in the said assessment.

(4) Notwithstanding any other provision of these rules, where it

a p p e a r s t o t h e C o m m i s s i o n e r t h a t t h e P. T. b en ch m a r k o f a

provisional tax payer as resulting from rule 6(1) or rule 7 is

substantially lower than the amount which in his opinion should be

payable for the period by the said provisional tax payer, he may at

any time establish an applicable benchmark and inform the

provisional tax payer accordingly by a notice in writing and where

such notice is given before the commencement of the month in

which a P.T. payment falls due, the P.T. benchmark shall be

equivalent to the amount shown in the said notice

Provided that where the notice referred to in this sub-rule is

given during the month in which a P.T. payment falls due or during

any subsequent month in the same basis period, the P.T. benchmark

as established by the Commissioner under this sub-rule shall still

a p p l y a n d t h e P. T. p a y m e n t o r p a y m e n t s b a s e d o n t h e s a i d

benchmark shall, notwithstanding the provisions of rule 4 but

without prejudice to the provisions of rule 10, become payable by

the last day of the month in which the notice has been given or by

such later date within the same basis period as may be determined

by the Commissioner.

(1) When a provisional tax payer has not, before the

commencement of the month immediately preceding that in which

a P.T. payment falls due, furnished a self assessment for the

relative benchmark year of assessment the P.T. benchmark with

respect to that particular payment shall be determined as follows

(a) if the Commissioner has made a determination with

respect to the tax payable by that provisional tax payer

for the said year of assessment in terms of article 31(3)

of the Act and has given notice of that determination to

that provisional tax payer before the commencement

of the month in which the said P.T. payment falls due

the P.T. benchmark shall be arrived at by taking the

amount of tax shown as payable in that determination

and adding back the provisional tax, if any, taken into

account therein;

(b) if the provisions of paragraph (a) do not apply the P.T.

benchmark shall be an amount determined in the

manner specified in rule 6 except that the reference

therein to the benchmark year of assessment shall be

construed as a reference to the last year of assessment

in respect of which a self assessment has been

furnished being a self-assessment furnished before the

commencement of the month immediately preceding

that in which the P.T. payment in question falls due

and relating to a year of assessment preceding the

benchmark year of assessment;

(c) if the Commissioner has not made a determination to

which paragraph (a) applies and the provisional tax

payer has not furnished a self assessment to which

paragraph (b) applies the P.T. benchmark shall be nil;

(d) if, after having made a determination in terms of

article 31(3) of the Act with respect to the tax payable

for the year of assessment in question, the

Commissioner has made an assessment in terms of

article 31(5) of the Act and has given notice of that

assessment to that provisional tax payer, the P.T.

benchmark shall be determined in the manner

specified in rule 6(3).

(2) When the P.T. benchmark with respect to a P.T. payment

that fell due during a basis period has been determined in

accordance with any of the provisions of sub-rule (1) and as a result

o f t he su b m is s i o n of a s e l f asse ssment that sub-rule is not

applicable to a subsequent P.T. payment that falls due during the

same period, the P.T. benchmark for that period shall be re-

calculated by reference to that self assessment as provided in rule

6. The re-calculated P.T. benchmark shall apply and shall be

deemed to have applied for all the purposes of these rules, but

saving the provisions of rule 10, with respect to all the P.T.

payments for that basis period.

(3) The foregoing provisions of this rule are without prejudice

to the Commissioner’s powers to take action for the collection of

a ny pr o v is io n a l t a x d ue i n a n a m ou n t ca lc ul a te d u nd e r t he

provisions of sub-rule (1) before a re-calculation falls to be made in

accordance with sub-rule (2).

(1) The P.T. benchmark with respect to provisional tax

payable on account of the first year of assessment of a provisional

tax payer who is not an individual is nil.

(2) The P.T. benchmark with respect to provisional tax payable

on account of the second year of assessment of a provisional tax

payer who is not an individual shall be determined in the manner

specified in rule 6 except that

(a) the reference to the benchmark year of assessment

shall be construed as a reference to that provisional tax

payer’s first year of assessment; and

(b) the references to a self assessment shall be construed

as references to a computation made by that

provisional tax payer on the basis of his records in the

same manner as a self assessment.

(1) Where it appears to the Commissioner that as a result

of a merger of companies or a division of a company the total of the

P.T. benchmarks for one or more basis periods of the companies

involved in the merger or the division computed in accordance with

the other provisions of these rules is or will be less than the amount

that would result if such merger or division did or does not take

place he may by order in writing determine the P.T. benchmark for

any or all of the said companies for the basis period or periods in

question in amounts which in his opinion compensate for the said

shortfall.

(2) Notwithstanding anything contained in these rules, but

without prejudice to the provisions of rule 10, the P.T. benchmark

determined in accordance with sub-rule (1) shall apply during the

basis period or periods in question as from the date of the service of

that order on the respective company.

(1) Where it appears to a provisional tax payer that the tax

payable for a year of assessment (hereinafter in these rules referred

to as "the current year liability") is less than the P.T. benchmark for

the corresponding basis period, he has an option to limit the amount

payable as provisional tax during that basis period to an amount

that is not less than the current year liability.

(2) The option referred to in sub-rule (1) shall be exercised by

means of the delivery to the Commissioner of the form prescribed

in the Schedule and may be exercised more than once during the

same basis period.

(3) The amount of any P.T. payment that falls due during a

basis period after an option has been exercised as aforesaid with

respect to that period shall be the lower of

(a) the amount due in accordance with rule 5; and

(b) the excess, if any, of the current year liability over the

total provisional tax already paid for the basis period

in question.

For the purpose of rule 10 and subject to the provisions of

rule 12 the current year liability shall be deemed provisionally to be

an amount determined in the manner specified in rule 6 except that

(a) the reference to the benchmark year of assessment

shall be construed as a reference to the year of

assessment on account of which the provisional tax

payment in question is payable;

(b) the references to a self assessment shall be construed

as references to a computation based on amounts

estimated by the provisional tax payer at the time that

the option is exercised.

(1) An amount that is provisionally deemed as the current

year liability in accordance with rule 11 shall be revised as

provided in sub-rule (2) when -

(a) a self assessment for the year of assessment in

question is furnished to the Commissioner; or

(b) the Commissioner makes a determination in terms of

article 31(3) of the Act with respect to the tax payable

for the year of assessment in question and serves a

notice of that determination on the provisional tax

payer.

(2) When a revision falls to be made in terms of sub-rule (1)

the current year liability for the purposes of rule 10 shall be deemed

to be and to have always been the amount resulting to be payable in

terms of the self assessment or the determination, as the case may

be, and the provisions of rule 14 shall be construed accordingly.

(3) The foregoing provisions of this rule are without prejudice

to the Commissioner’s powers to take action for the collection of

a ny pr o v is io n a l t a x d ue i n a n a m ou n t ca lc ul a te d u nd e r t he

provisions of rules 10 and 11 before a revision falls to be made in

accordance with rule 12.

(1) Provisional tax paid for a basis period shall be applied

towards the discharge of any provisional tax for that period that has

fallen due and any excess shall be appropriated to provisional tax

for that period that has not yet fallen due.

(2) Provisional tax paid by a provisional tax payer on account

of his tax liability for a year of assessment shall be set off for the

purpose of collection against the tax chargeable in respect of the

said year of assessment and if there is an excess after the aforesaid

set off has been made such excess shall be refunded in accordance

with the provisions of article 48 of the Act.

(1) When any provisional tax payable in accordance with

these rules is not paid by the date when it falls due additional tax

shall be charged as provided in article 44 of the Act in an amount

equal to one percent of the unpaid provisional tax for each calendar

month or part thereof during which such tax remains unpaid

Provided that in respect of any period or part thereof

commencing on or after 1 January 2020, the said additional tax shall

be charged in an amount equal to zero point three three per cent

(0.33%) for each calendar month or part thereof

Provided further that in respect of any period or part thereof

commencing on or after 1 June 2022, the said additional tax shall be

charged in an amount equal to zero point six per cent (0.6%) for each

calendar month or part thereof

Provided further that where the tax for the basis period which

will result from a provisional tax payer’s self-assessment is less

than that resulting from the P.T. benchmark, the additional tax

chargeable on this difference shall be reduced by ninety percent.

(2) No further additional tax shall be chargeable on unpaid

provisional tax for any month commencing after the tax settlement

date relative to the year of assessment on account of which that

provisional tax was due.

(3) Notwithstanding the provisions of rule 13 the amount of

provisional tax that would otherwise be available for set off in

accordance with sub-rule (2) of that rule against the tax chargeable

in respect of a year of assessment shall first be applied towards the

discharge of additional tax, if any, due on and up to the tax

settlement date corresponding to that year of assessment and the

amount available for set off shall be reduced accordingly.

(4) Any additional tax on provisional tax that has not been

discharged as provided in sub-rule (3) shall be deemed to be tax

due for the year of assessment on account of which the said

provisional tax was due and the provisions of the Income Tax Acts

relating to the collection and recovery of tax shall apply to the

collection and recovery of such additional tax.

(5) The foregoing provisions of this rule are without prejudice

to the Commissioner’s powers to take action for the collection of

any additional tax before the tax settlement date referred to in sub-

rule (2).

Nothing in these rules shall be construed as in any way

limiting the powers granted to the Commissioner under article

11(4) of the Income Tax Act.

When, in terms of the other provisions of these rules, the

date on which any P.T. payment for a basis period that ends during

2000 falls due is a date that falls during 1999 any such payment

shall be deemed, to the extent that it has not been paid, to fall due

on the 30th April, 2000 in addition to any other payment that falls

due on that date.

The Payment of Provisional Tax (P.T.) Rules, revoked by

these Rules, shall remain fully applicable with respect to any

provisional tax payment that was made or that was due to be made

on account of tax chargeable for any year of assessment preceding

the year of assessment 2001.

PAYMENT OF PROVISIONAL TAX (P.T.)