AUDIT REPORT WAIVER AND DEDUCTION RULES *

AUDIT REPORT WAIVER AND DEDUCTION RULES

SUBSIDIARY LEGISLATION 372.29

AUDIT REPORT WAIVER AND DEDUCTION RULES *

3rd November, 2017

LEGAL NOTICE 306 of 2017.

(1)

The title of these rules is the Audit Report

Waiver and Deduction Rules.

(2) These rules shall come into force as from the year of

assessment 2018.

For the purposes of these rules and of the second proviso

to article 19(4)(a) of the Income Tax Management Act -

"company" refers to a company as defined in the Income tax

Act whose annual turnover does not exceed eighty thousand euro

(€80,000) or a pro rata amount if the relevant accounting period is

other than twelve months;

"educational qualifications" refers to the successful completion

of a course of study at MQF level 3, or higher, as recognized by the

Malta Qualifications Recognition Information Centre.

(1)

Where a company does not avail itself of the

audit report waiver provided for in the second proviso to article

19(4)(a) of the Income Tax Management Act, it may claim a

deduction against its income of 120% of the audit fees incurred.

(2) The deduction under sub-rule (1) shall apply for the first

two accounting periods of a newly registered company whose sole

shareholders are individuals in possession of educational qualifications

as aforementioned and who have set up the new company within three

years of obtaining the said qualifications.

(3) The deduction claimed under this rule may not exceed

seven hundred euro (€700) in each accounting period.

The audit report waiver provided for in the second

proviso to article 19(4)(a) of the Income Tax Management Act and the

deduction provided for in rule 3 shall cease to apply with immediate

effect if there is a change in the shareholding of the company as a result

of which the shareholders will not all be individuals who have attained

the educational qualifications as aforementioned.

*These regulations have been repealed by Legal Notice 139 of 2025.