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Budget Measures Implementation Act (Cap. 457) Consolidated

CHAPTER 457

BUDGET MEASURES IMPLEMENTATION ACT

To implement various budget measures and other administrative measures.

1st January, 2003

ACT II of 2003, as amended by Legal Notice 427 of 2007 and Act I of

2010.

1. The short title of this Act is the Budget Measures

Implementation Act.

Short title.

PART I

2. The provisions of this Part shall be deemed to have come into force on the 1st January, 2003.

3. For the purpose of this Part, "revenue" has the same meaning as is assigned to it in article 2 of the Financia l Administration and Audit Act, but does not include proceeds from local loans.

4. (1) Subject to the provisions of this Act, the Government of Malta may raise in Malta, by way of loan, a sum of money not exceeding two hundred and thirty-two million and nine hundred and thirty-seven thousand and three hundred and thirty-nine euro and eighty-six cents (232,937,339.86).

(2) For the purpose of raising the aforesaid loan the Minister responsible for finance is hereby authorised to issue stock in Malta und er t he p rov isio ns of t he Local Loans (Registered St ock and Securities) Ordinance on su ch term s and cond ition s as th e said Minister may approve.

Coming into force of this Part.

Interpretation. Cap. 174.

Authority to raise loan.

Amended by:

L.N. 427 of 2007.

Cap. 161.

5. Any money borrowed under the authority of this Part shall be appropria ted and applied for the purpose of meeting excess expenditure over revenue incurred in the Consolidated Fund during the years 2001 and 2002, and that projected to be incurred during the year 2003:

Provided that any amount borrowed under this Part in excess of the amount actually required for the said purposes and remaining as a balance in the Consolidated Fund at the end of 2003 shall be used to meet excess ex pendi ture over revenue in the Consolidated Fund during the first subsequent year in which such excess is incurred.
PART II
6. (1) This Part amends the Income Tax Act and shall be read and construed as one with the Income Tax Act, hereinafter in this Part referred to as "the principal Act".
(2) (a) The provisions of paragraph (c) of article 22 and paragraph (a) to (d) of article 25 shall be deemed to have come into

Purpose.

Amendment of the Income Tax Act. Cap. 123.

force on the 1st January, 2001 and shall apply with respect to any year of assessment commencing on or after 1st January 2002.
(b) The provisions of articles 9, paragraph (b) of article 10 and articles 12, 18, paragraph (c) of article 19 and article 23 shall be deemed to have come into force on the 1st January, 2002 and
shall apply with respect to any year of assessment commencing on or after 1st January 2003.
(c) The provisions of paragraph (a) of article 10 and paragraph (a) and (b) of article 22 shall come into force on the 1st Jan u ary 2 003 and sh al l app l y wit h respect to any year of
assessment commencing on or after 1st January 2004.

Addition of article

27A to the

principal Act.

(d) The provisions of article 13 shall come into force on such date as the Minister responsible for finance may by notice in the Gazette appoint.
13. Immediately after article 27 of the principal Act, there shall be inserted the following new article: (this amendment is not yet in force)

''Tax treatment of mergers, divisions of companies etc.

27A. Notwithstanding the provisions contained in the Income Ta x Acts, the Minister may make rules regulating the tax treatme nt of co mpanies and their mem b ers and other simil ar bod ies or persons concerning mergers and divisions of companies, transfer of assets between

c o mpani e s and exc h a nge o f sha r es conce r ni ng com p ani e s and for the
purposes of this article:
(a) "merger" shall mean an operation whereby:
- one or more companies, on being dissolved without going into liquidation, transfer all their assets and liabilities to another existing company in exchange for the issue to their shareholders of securities representing the capital of that other company, and, if applicable, a cash payment not exceeding such percentage as may be prescribed of the nominal value, or, in the absence of a nominal value, of the accounting par value of those securities,
- two or more companies, on being dissolved without going into liquidation, transfer all their assets and liabilities to a company that they form, in exchange for the issue to their shareholders of securities representing the capital of that new company, and, if applicable, a cash payment not exceeding such percentage as may be prescribed of the nominal value, or in the absence of a nominal value, of the accounting par value of those securities,
- a company, on being dissolved without going into liquidation, transfers all its assets and liabilities to the company holding all the securities representing its capital;
(b) "division" shall mean an operation whereby a company, on being dissolved without going into liquidation, transfers all its assets and liabilities to two or more existing or new companies, in exchange for the pro rata issue to its shareholders of securities representing the capital of the companies receiving the assets and liabilities and, if applicable, a cash payment not exceeding such percentage as may be prescribed of the nominal value or, in the absence of a nominal value, of the accounting par value of those securities;
(c) "transfer of assets" shall mean an operation whereby a company transfers without being dissolved all or one or more branches of its activity to another company in exchange for the transfer of securities representing the capital of the company receiving the transfer;
(d) "exchange of shares" shall mean an operation whereby a company acquires a holding in the capital of another company such that it obtains a majority of the voting rights in that company in exchange for the issue to the shareholders of the latter company, in exchange for their securities, of securities representing the capital of the former company, and, if applicable, a cash payment not exceeding such percentage as may be prescribed of the nominal value or, in the absence of a nominal value, of the accounting par value of the securities issued in exchange;
(e) "transferring company" shall mean the company transferring its assets and liabilities or transferring all or one or more branches of its activity;
(f) "receiving company" shall mean the company receiving the assets and liabilities or all or one or more branches of the activity of the transferring company;
(g) "acquired company" shall mean the company in which a holding is acquired by another company by means of an exchange of securities;
(h) "acquiring company" shall mean the company which acquires a holding by means of an exchange of securities;
(i) "branch of activity" shall mean all the assets and liabilities of a division of a company which from an organisational point of view constitute an independent business, that is to say an entity capable of functioning by its own means.".

Amendment of the Accountancy Profession Act. Cap. 281.

Amendment of the Import Duties Act. Cap 337.

Amendment of the Duty on Documents and Transfers Act.

Cap. 364.

Amendment of the Motor Vehicle Registration Tax Act.

Cap. 368.

Amendment of the Income Tax Management Act. Cap. 372.

Amendment of article 4 of the principal Act.

PART III

All amendments are in force and have been inserted in the Act accordingly.

PART IV

All amendments are in force and have been inserted in the Act accordingly.

PART V

All amendments are in force and have been inserted in the Act accordingly.

PART VI

All amendments are in force and have been inserted in the Act accordingly.

PART VII
40. (1) This Part amends the Income Tax Management Act, and s h a l l be re ad a n d construe d as one with the Income Ta x Managem e n t Act, hereinaft e r in t h is Part refer r ed to as "the principal Act".
(2) (a) The provisions of article 48 shall come into force on the
1 st January, 2002 and shal l apply with respect to any year of assessment commencing on or after 1st January, 2003.
(b) The provisions of paragraph (a) of article 41, of article 42 and of paragraph (c) of article 44 shall come into force on such date as the Minister responsible for finance may by notice in the Gazette appoint.
41. Article 4 of the principal Act shall be amended as follows: (a) subarticle (3) thereof shall be substituted by the
following new subarticle:
"(3) Nothing contained in this article shall prevent the disclosure to any authorised representative of any other Government of such information as is required to be disclosed in terms of -
(a) any arrangement made under article 76 of the Income Tax Act including the disclosure of such facts as may be necessary to enable proper relief to be given in Malta or elsewhere under any such arrangement or
under article 89 of the Income Tax Act;
(b) any other arrangement between Malta and other States or their tax authorities providing for the reciprocal exchange of information for tax purposes."; and
(b) Amendment is in force and has been inserted in the Act accordingly.

42. Immediately after article 10 of the principal Act there shall be inserted the following new article:

Addition of new article 10A to the principal Act.

''Commissioner may request information.

10A. The Commissioner may, when and as often as he deems necessary, give notice in writing to any person to furnish him, within a reasonable time stated in such not ice, n o t bei ng less than thirty days, su ch i n formation as may be necessary in order to provide information

to foreign tax author ities where arrangement s between Malta and the
respective S t ate or its tax authorities ex ist for th e rec i proca l exc h an ge of
information for tax purposes and where
the infor m ation is such th at the
Com missioner co uld col l ect for the
purposes of the Income Tax Acts.".

Amendments made by paragraphs (a) and (b) are in force and have been inserted in the Act accordingly; amendment made by paragraph (c) never came into force, and was repealed by Act I.

2010.72

PART VIII

All amendments are in force and have been inserted in the Act accordingly.

Amendment of article 23 of the principal Act. Amended by:

L.N. 427 of 2007.

Excise Duty Act. Cap. 382.