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B 469
INCOME TAX ACT (CAP. 123)
INCOME TAX MANAGEMENT ACT (CAP. 372)
Sale of Agricultural Produce Rules, 2005
IN exercise of the powers conferred by articles 14(2) and 96 of the Income Tax Act and articles 23 and 58 of the Income Tax Management
Act, the Prime Minister and Minister of Finance has made the following rules>-
1. The title of these rules is the Sale of Agricultural Produce
Rules, 2005.
2. In these rules, unless the context otherwise requires> “agricultural produce” means any item produced or derived
from farming and other agricultural activities<
“approved marketing centre” means a place where agricultural produce is sold through the services of licensed brokers (pitkali) and recognised as such by the Commissioner for the purposes of these rules<
“guidelines” means guidelines published by the Commissioner under the provisions of article 96(2) of the Income Tax Act<
“non-qualifying sales” means sales of agricultural produce other than qualifying sales<
“payor” means -
(a) in the case of any sale of agricultural produce made on or after 1 January 2004, whether it is a qualifying sale or not, through
the services of a licensed broker (pitkal) in an approved marketing centre, the licensed broker (pitkal) providing those services, and
(b) in the case of any qualifying sale other than a sale made through the services of a licensed broker (pitkal), the person to whom the sale is made>
Citation.
Interpretation.
B 470
Provided that to the extent necessary for the purposes of rule
10 “payor” also includes a representative or a bank to whom that rule applies>
Provided also that a person who is registered as a payor shall continue to be treated as a payor by reason of his registration and
without reference to the other provisions of this definition until his registration is cancelled<
“qualifying sale” means a sale made on or after 1 January
2004 of agricultural produce grown and cultivated in Malta in the course of an agricultural activity carried on by or in the name
of the vendor and which is>
(a) a sale of fresh fruit and#or fresh vegetables made through the services of a broker (pitkal) at an approved marketing centre< or
(b) a sale of fresh fruit and#or fresh vegetables to a hotel operator< or
(c) a sale of tomatoes to a tomato processor for processing in Malta< or
(d) a sale of grapes to a vintner for processing in Malta<
or
(e) a sale of olives to an olive processor for processing in Malta< or
(f) a sale of fresh fruit and#or fresh vegetables to a food processor for processing in Malta< or
(g) a sale designated as a qualifying sale for the purpose of these rules by means of guidelines.
Registration and deregistration of Payors.
3. (1) Every payor shall register with the Commissioner by not later than fifteen days from the date of the first sale in respect
of which he is the payor.
(2) The registration shall be made by the delivery to the Commissioner of the registration form, duly filled in, set out in Schedule
A.
(3) Every payor shall give notice in writing to the Commissioner of any material change in the circumstances shown on the registration
form.
(4) When a person who is registered as a payor under these rules ceases to carry on the activity in respect of which he was so
registered, he shall give notice to the Commissioner within fifteen days on the deregistration form set out in Schedule B and the
Commissioner shall, upon being satisfied that that person is not required to remain registered, cancel his registration.
(5) The Commissioner shall give notice of every registration and deregistration to the person concerned.
(6) The deregistration of a person shall be without prejudice to the obligation of that person to register again in the event that
he is the payor in accordance with these rules in respect of a subsequent sale.
4. (1) A payor shall deduct tax from the price of every qualifying sale in respect of which he is the payor, at a rate of three
cents for every lira of such price.
(2) A deduction of tax as aforesaid shall be made whenever a qualifying sale is made regardless of the time when and the manner
in which the payment is made and regardless of the tax status of the vendor and of any exemption or relief from tax to which he may
be entitled.
(3) For the purposes of these rules a qualifying sale is deemed to be made at the time when the agricultural produce in question
is delivered to the purchaser or to his representative.
5. A payor shall for every sale in respect of which he is the payor furnish the vendor with a document, in these rules referred
to as a purchase note, giving the particulars of the sale including, as a minimum, the tax deducted, if any, in accordance with these
rules and the other particulars specified in Schedule C.
6. (1) The tax deducted or that ought to be deducted from the price for a qualifying sale shall be a debt due by the payor to
the Government and shall be remitted to the Commissioner not later than the last working day of the month following that in which
the sale was made, or any other date approved by the Commissioner, and shall be recoverable as such.
B 471
Withholding tax.
Purchase note.
Monthly return and payment of tax to the Commissioner.
B 472
Annual statement to be furnished to vendors.
Annual reconciliation of transactions and remittances.
(2) Every payor shall make a monthly return of all sales of agricultural produce in respect of which he is the payor and of tax
deducted in accordance with these rules.
(3) The monthly return shall be prepared on the form set out in Schedule D and contain the particulars required by that form and
such form shall be delivered by not later than the last working day of the month following that to which it refers, or any other
date approved by the Commissioner.
(4) The obligation to furnish the monthly return shall arise even when a payor has not made any deductions of tax or has no relevant
transactions to report.
(5) A person whose registration as a payor is cancelled shall furnish a monthly return for the month during which he was still registered
as a payor even though he is no longer registered as a payor on the date on which the return is due to be filed.
7. (1) Every payor shall furnish to the vendors of sales of agricultural produce in respect of which he was the payor an annual
statement showing the tax deducted in accordance with these rules and the other particulars specified in Schedule E.
(2) The annual statements shall be delivered to the vendors by not later than the last working day of January of the year immediately
following that to which it refers.
(3) A person whose registration as a payor is cancelled shall prepare an annual statement as aforesaid for the year during which
he was still registered as a payor and shall furnish that statement to the respective vendors by not later than the date set out
in paragraph (2) or, where his registration is cancelled before the end of the year to which the statement refers, by not later than
the last working day of the month following that in which his registration is cancelled.
8. (1) Every payor shall prepare an annual transaction reconciliation giving the details of the sales made during each year
in respect of which he was the payor and the other particulars specified in Schedule F. The annual transaction reconciliation shall,
unless the Commissioner otherwise approves in any particular case, be drawn up in such electronic format as would enable such detailed
analysis as may be specified in guidelines, including an analysis of the price of sales and of the tax withheld on sales by reference
to the vendor, the payor and the type of produce. The annual transaction reconciliation required
to be furnished by a payor who is a licensed broker (pitkal) shall contain such further details and breakdowns as may be required
by guidelines.
(2) Every payor shall also prepare an annual reconciliation of remittances giving the details of the deductions and remittances
of tax made in respect of those sales and the other particulars specified in Schedule G.
(3) The annual transaction reconciliation and the annual reconciliation of remittances shall be furnished to the Commissioner by
not later than the last working day of January of the year following that to which they refer.
(4) The obligation to furnish the annual transaction reconciliation and the annual reconciliation of remittances shall arise even
when a payor has not made any deductions of tax or has no relevant transactions to report.
(5) A person whose registration as a payor is cancelled shall furnish an annual transaction reconciliation and an annual reconciliation
of remittances as aforesaid covering the period of the respective calendar year up to the month during which he issued the last purchase
note as a payor.
9. Where a purchase note has been issued in accordance with rule 5 it shall be presumed, in so far as the tax liability of the
vendor is concerned, that that any amount of tax shown in the note as having been deducted from a qualifying sale has been duly deducted
and remitted in accordance with rules 4 and 6.
10. (1) A payor who is a licensed broker (pitkal) may make arrangements with a representative under which the representative will assume the obligation to prepare and furnish the
documents referred to in rules 5, 6, 7 and 8 and any other documents and information requested by the Commissioner.
(2) A payor who is a licensed broker (pitkal) may make arrangements with a bank under which the bank will assume obligation for the payments to vendors for sales effected through
his services and for the remittance of the tax deducted from the said payments to the Commissioner.
(3) When arrangements to which paragraphs (1) or (2) apply have been approved in writing by the Commissioner and accepted by
the representative or the bank, as the case may be, they shall bind the said representative or bank to assume in lieu of the licensed
broker
B 473
Presumption of deduction and payment.
Appointment of representative.
B 474
Tax deducted to be final.
Tax return and records.
Allocation of income to the Maltese taxed account.
(pitkal) those obligations of the payor to which the arrangements refer and the liability to the relative additional tax imposed under these
rules for a default.
(4) The obligations to register and to apply for deregistration as provided in rule 3 shall not apply to any such representative
or bank but shall continue to apply to the licensed broker (pitkal) who makes the said arrangements.
11. When tax has been deducted in accordance with these rules from the price of a qualifying sale and where a purchase note has
been issued in accordance with these rules in respect of that sale, the deduction of the tax shall be deemed to be in final settlement
of the tax due by the vendor on the income derived from that sale and no further tax shall be due by the vendor on the said income.
The tax deducted as aforesaid shall not be available as a credit against the vendor’s tax liability and shall not be available
for a refund to the vendor or, where the vendor is a company, to any shareholder thereof, or to any other person.
12. (1) A person whose income consists of, or includes income from qualifying sales, shall deliver together with his income tax
return for any year of assessment the annual statement or annual statements furnished to him by a payor or by payors as required
by rule 7 and, when so requested, the purchase notes referred to in rule 5. He shall also deliver with his income tax return such
attachments as may be prescribed by rules with respect to returns filed by vendors of agricultural produce.
(2) Save as provided in this rule and subject to the provisions of rules 15 and 16, a vendor of qualifying sales other than a company
shall not be required to produce to the Commissioner any other records or documents relating to qualifying sales.
(3) Nothing in these rules shall be construed as exempting any person from the obligation to keep records and other documents and
to furnish information, including records and information relating to qualifying sales, that may be required in terms any provision
of the Income Tax Acts for the purpose of determining and ascertaining the total income from sources of income other than from qualifying
sales, including the determination of the deductions in accordance with rule
14(3)(b).
13. The amount that is deemed, in accordance with rule 14(1), to be the total income derived by a company (including a co-operative
society) from qualifying sales, net of the tax deducted therefrom in accordance with these rules, shall be allocated to its Maltese
taxed
account and shall be treated for all purposes of the Income Tax Acts as income that has been taxed at 5%.
14. (1) The total income derived by a person from qualifying sales for any year of assessment shall be deemed to amount to sixty
per cent of the total price of those sales for that year before deductions and shall be reported in the relative tax return accordingly.
(2) In the calculation of the total income in accordance with paragraph (1) all deductions otherwise available for that year of
assessment with respect to income from qualifying sales, including any unabsorbed capital allowances and#or losses relating to that
income that may have been brought forward from any previous year, shall be deemed to have been set off and absorbed, and no deduction
shall be allowed against that income except as provided in paragraph (1).
(3) Where the person who derives income from qualifying sales also derives income from other sources>
(a) for the purpose of calculating the tax due on the income derived from such other sources, and without prejudice to rule 11,
the income from qualifying sales, determined in accordance with these rules, shall be deemed to constitute the first part of the
total income from all sources<
(b) if the income from those other sources consists of or includes income from non-qualifying sales the deductions that that person
may claim and that are allowable for the purpose of ascertaining the total income derived from non-qualifying sales shall be the
lower of>
(i) D x NQS # S
where>
- D is the amount that would be allowable as deductions for the year of assessment in question, had this rule not been applicable
to that year of assessment, in determining the total income derived from qualifying and non-qualifying sales
- NQS is the total receipts before deductions derived from non-qualifying sales
- S is the total receipts before deductions derived from non-qualifying sales and from qualifying sales gross of tax deductible in
accordance with these rules
B 475
Deemed amount of total income.
B 476
Option.
Provisions applicable when option is exercised.
and
(ii) the amount allowable in accordance with the other relevant provisions of the Income Tax Acts without reference to this rule.
15. (1) Subject to the other provisions of this rule and to rule
16, a vendor may, by means of an irrevocable notice in writing, opt to have his tax liability for a year of assessment determined
without reference to rule 14.
(2) An option for the purpose of paragraph (1) shall be made in writing on the applicable form prescribed for the tax return for
each year of assessment in respect of which it is exercised, and shall not be valid unless the said form is delivered to the Commissioner
by the relative tax return date
(3) An option under this rule shall apply to income from all qualifying sales for the relative year of assessment and any restriction,
exclusion or reservation shall be disregarded.
16. Notwithstanding the other provisions of these rules, when the option referred to in rule 15(1) has been validly exercised for
a year of assessment>
(a) the total income of that person for that year shall be computed without reference to rule 14> provided that where any amount
of losses or capital allowances has been deemed as set off and absorbed in accordance with rule 14(2) in a particular year of assessment
for which the option was not exercised, it shall not be treated as unabsorbed and carried forward to a subsequent year, even though
an option as aforesaid is exercised for that subsequent year<
(b) the amount of tax withheld in accordance with these rules, as evidenced by the delivery of the annual statement and, if so
requested, the relative purchase notes, shall be available against the taxpayer’s tax liability and where any tax so withheld is
in excess of such liability, the difference shall be refunded<
(c) rule 12(2) shall not apply to records and documents relating to qualifying sales made for that year<
(d) where the taxpayer is a co-operative society, the income from its qualifying sales for that year shall be allocated to its
untaxed account.
17. The failure by any person to comply with any obligation imposed by these rules shall constitute a default against these rules
and shall render that person liable to additional tax as prescribed in Schedule H.
18. (1) Without prejudice to rule 12 and subject to the provisions of article 20 of the Income Tax Management Act, the Commissioner
may require any person to allow him access to any place where an agricultural activity is carried on or where agricultural produce
is sold and to give such information about such activity or sale as he may consider relevant for the proper application of the Income
Tax Acts in general and of these rules in particular to income from the sale of agricultural produce.
(2) When, as a direct or indirect result of any disposition, any sale of agricultural produce is reported for the purpose of these
rules as a sale made by a person other than the person who would be the vendor were it not for that disposition, and if that disposition
was made for the sole or main purpose of avoiding, reducing or postponing liability to tax or of obtaining any refund or set-off
of tax, the Commissioner may, by order in writing, determine the person who should or should not be treated as the vendor in that
sale and the rules shall apply to that sale according to that order.
(3) In paragraph (2) “disposition” includes any agreement, deed, arrangement, renunciation or declaration.
(4) An order made under paragraph (2) shall be subject to objection and appeal in accordance with the provisions of the Income
Tax Acts.
19. Notwithstanding the other provisions of these rules, where a person derives income from a qualifying sale but also qualifies,
in respect of such income, under the provisions of the Part-time Work Rules, 1996, the tax liability in respect of such income shall
be determined without reference to rules 12(1) and 14 hereof, and such person may, by means of a notice in writing on the form as
may be prescribed under the said rules, opt to -
(a) have the tax withheld under the provisions of rule 4 of these rules to be considered as final< or
(b) declare the said income on the form prescribed under the Part-time Work Rules, 1996, in which case the provisions of the said
rules shall apply thereto, with the tax withheld under the provisions of rule 4 of these rules being credited against the tax so
B 477
Defaults and additional tax.
Powers of the
Commissioner.
Qualifying Sales under the Part-time Work Rules, 1996.
B 478
charged, and any excess shall be available as a credit against the individual’s tax liability as resulting from the tax return submitted
in accordance with article 10 of the Income Tax Management Act, and where any tax so paid is in excess of such liability, it shall
be refunded.
B 479
SCHEDULE A
(Rule 3)
Inland Revenue Department - MaltaAS 1Sale of Agricultural Produce Scheme
Payor Registration FormDetails of Payor Please indicate the category of person registered for income tax purposes | Individual Partnership Company (tick as appropriate) |
Identified as Payor acting in the capacity of: | Broker (Pitkal) Hotel Operator Tomato Processor Vintner Olive Processor Food Processor Other (tick as appropriate) |
Name of Business Establishment
Name of Payor
Mailing Address
Income Tax Registration Number PE Number
Company (ROC) Number
Name of Contact Person
VAT Number
Telephone Number(s) Fax Number
e-mail address
Signature
ID Number
Name in full
Designation
DATE:
B 480
(Rule 3)
SCHEDULE B
Inland Revenue Department - MaltaAS 2Sale of Agricultural Produce Scheme
Payor Deregistration FormDetails of Payor Please indicate the category of person registered for income tax purposes | Individual Partnership Company (tick as appropriate) |
Identified as Payor acting in the capacity of: | Broker (pitikal) Hotel Operator Tomato Processor Vintner Olive Processor Food Processor Other (tick as appropriate) |
Name of Business Establishment
Name of Payor
Mailing Address
Income Tax Registration Number PE Number
Company (ROC) Number
Name of Contact Person
VAT Number
Telephone Number(s) Fax Number
e-mail address
Deregistration
I on my own behalf / on behalf of do hereby give notice in terms of regulation 3 (4) that I ceased to be a payor as from
Please cancel my registration as payor.
(Rule 5)
SCHEDULE C
B 481
Inland Revenue Department - MaltaSale of Agricultural Produce Scheme
Purchase NoteBusiness Name
Purchase Note No
SAP No
Date
Vendor Details
Vendor's Name
I T Reg No FRC No Vat No
Type of produce (to be completed only if Payor is a Broker)
Description Code Quantity
Value of products purchased
Value of qualifying sale Value of non-qualifying sale Total value of purchased sale
Withholding tax of 3% on qualifying sale
Net amount paid / payable to vendor
B 482
(Rule 6)
SCHEDULE D
Inland Revenue Department - Malta
AS 5 Sale of Agricultural Produce Scheme
Monthly Return and Payment Advice
Payor Information SAP No
Person's Name
(Individual / Body of Persons)
Statement for the quarter ending
Income Tax Registration No
d d m m y y y y
Business Name
Business Address
Total number of vendors included in this statement
Vendors Details
Surname | Name | FRC No | IT Reg No | Value of Qualifying Sale (Lm) | Value of non Qualifying Sale (Lm) | Tax @ 3% withheld at source (Lm) |
Totals | ||||||
(Rule 7)
SCHEDULE E
B 483
Inland Revenue Department - MaltaPayor's Details
Year ended 31st December
Person's Name
(individual / corporate)
Income Tax Reg No SAP No
Establishment Name
Business Address
Vendor's Details
Person's Name
(individual / corporate)
Income Tax Reg No
FRC No Vat No
Value of qualifying sales
Tax @ 3 % withheld at source
Value of qualifying sales after withholding tax
Value of non-qualifying sales sold to establishment during the year
Net payment to vendor during the year
B 484
(Rule 8)
SCHEDULE F
Inland Revenue Department - Malta
Payor Detail
Person's Name
(Individual / Corporate)
Year ended 31st December
SAP No
Income Tax Registration No
Business Name
Business Address
Total number of vendors included in this statement
Vendors Details
Surname | Name | FRC No | IT Reg No | Value of non Qualifying Sale (Lm) | Value of non Qualifying Sale (Lm) | Tax @ 3% withheld at source (Lm) |
Totals | ||||||
B 485
(Rule 8)
SCHEDULE G
Inland Revenue Department - Malta
Year ended 31st December
Payor Detail SAP No
Person's Name
(Individual / Corporate)
Income Tax Registration No
Business Name
Business Address
Total number of vendors included in this statement
Total tax withheld for the year remitted to IRD
Payment Reconciliation
Receipt No Amount (Lm)
January February March April
May
June July August September October November
December
Name of person completing this return
Designation Signature Date
B 486
(Rule 17)
SCHEDULE H
Additional Tax
Default | Imposition of Additional Tax [subject to a maximum of Lm200 for each default per regulation] | |
1 | Payor Registration AS 1 | |
1 | Payor fails to register or re-register under these regulations. | Lm50 for default in registering or re- registering as a Payor, as the case may be |
2 | Certificate of deduction | |
2 | Payor fails to issue a certificate of deduction to vendor or fails to deduct tax | Lm10 for every transaction that is not supported by a certificate of deduction |
3 | Montly statement AS 5 | |
3 | Payor fails to submit to the Commissioner, form AS 5 | Lm10 for every month, or part thereof, during which form AS 5 has not been forwarded to the Commissioner |
4 | Monthly payment | |
4 | Payor fails to remit to the Comissioner the monthly total amount of withholding tax deducted | 1% per month, or part thereof, during which the default continues calculated on the tax due when the payment is effected OR Lm20 whichever is the greater. |
5 | Annual statement to vendor AS 3 | |
5 | Payor fails to furnish the vendor with the annual statement AS 3 | Lm20 for every statement not furnished by Payor |
6 | Annual Reconciliation statements AS 6 and AS 7 | |
6 | Payor fails to submit to the Commissioner forms AS 6 and AS7 | 1% per month, or part thereof, during which the default continues calculated on the tax deducted for the year OR Lm50 whichever is the greater. |
Ippubblikat mid-Dipartiment ta’ l-Informazzjoni (doi.gov.mt) — Valletta — Published by the Department of Information (doi.gov.mt) — Valletta
Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press
Prezz 72ç – Price 72c
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