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Income Tax Act (Cap. 123) Reduction Of Additional Tax (Omissions) Rates, 2003 (L.N. No. 126 Of 2003 )

addizzjonali b’50%.

B 1460

Applikabilità ta’ tnaqqis f’taxxa addizzjonali.

L-og[la taxxa addizzjonali li tit[allas.

Poteri li g[andu l- Kummissarju.

(i) it-talba e//essiva ta’ tnaqqis kontra income li fuqu tit[allas it-taxxa ta[t l-artikolu 4(1)(b) ta’ l-Att<
(ii) it-talba g[al tnaqqis ta’ [lasijiet g[al manteniment meta ma jkun je]isti ebda dritt g[al tnaqqis b[al dak<
(iii) in-nuqqas li ji;u dikjarati [lasijiet ta’ manteniment li jkunu ;ew ri/evuti<
(iv) talbiet e//essivi jew mhux ;ustifikati g[al tnaqqis kontra income ;ej minn kera.
8. It-tnaqqis kontemplat fir-regoli 6 u 7 g[andhom ikunu japplikaw g[at-taxxa addizzjonali li g[andha tit[allas ta[t l-Iskeda, sew jekk din titnaqqas skond id-disposizzjonijiet tar-regola 5 ta’ dawn ir- regoli sew jekk le.
9. Meta jsir tnaqqis ta’ taxxa addizzjonali skond id- disposizzjonijiet ta’ dawn ir-regoli, ir-rata ta’ taxxa addizzjonali applikabbli msemmija fil-partita 5 ta’ l-Iskeda g[andha tkun bir-rata ta’ taxxa addizzjonali hekk imnaqqsa.
10. Ebda [a;a li tinsab f’dawn ir-regoli ma g[andha ]]omm lill- Kummissarju milli je]er/ita xi poter li hemm vestita fih biex ja[fer dik il-parti jew it-taxxa addizzjonali kollha li g[andha tit[allas, skond ma jidhirlu xieraq, sakemm>
(a) il-Kummissarju jista’ jimponi b[ala kondizzjoni g[al tali [las lura l-[tie;a li l-persuna involuta ma tag[milx ommissjoni o[ra f’dak il-perjodu li l-Kummissarju jista’ jistabbilixxi, kif ukoll dawk il-kondizzjonijiet o[ra kollha li jista’ jqis xierqa<
(b) jekk xi kondizzjoni imposta mill-Kummissarju skond id-disposizzjonijiet tal-paragrafu (a) ta’ dawn ir-regoli ti;i miksura mill-persuna involuta, kull tnaqqis ta’ taxxa addizzjonali mog[tija mill-Kummissarju b’]jieda ma’ kull tnaqqis kontemplat mid- disposizzjonijiet l-o[ra ta’ dawn ir-regoli g[andu ji;i konfiskat<
(/) jekk il-konfiska tkun hekk dovuta, ta[t id- disposizzjonijiet tas-subregola (b) ta’ dawn ir-regoli, kull tnaqqis addizzjonali mag[mul ta[t id-disposizzjonijiet ta’ din ir-regola, imma mhux ta[t id-disposizzjonijiet tar-regoli l-o[ra ta’ dawn ir- regoli, g[andu jitqies b[ala li kien sospensjoni tal-passività g[al dik it-taxxa addizzjonali, u mhux it-t[assir tat-taxxa addizzjonali rilevanti<
(d) il-Kummissarju g[andu jikkomunika bil-miktub lill- persuna involuta kull kwistjoni imposta ta[t is-subregola (b) ta’ dawn ir-regoli, il-konsegwenzi tal-ksur ta’ kull tali kondizzjoni u, jekk dan ikun il-ka], il-fatt li l-konfiska tkun saret.
11. De/i]jonijiet me[udin mill-Kummissarju dwar l- applikazzjoni ta’ dawn ir-regoli g[andhom ikunu bla [sara g[al o;;ezzjoni u appell skond id-disposizzjonijiet ta’ l-artikoli 35 u 37, rispettivament, ta’ l-Att dwar l-Amministrazzjoni tat-Taxxa, biss dwar jekk, g[all-fini tar-regola 4(4) ta’ dawn ir-regoli, il-parir ta’ professjonist dwar it-taxxa g[andux jitqies b[ala wie[ed mhux ;enwin jew frivolu.
B 1461

Appelli.

B 1462
L.N. 126 of 2003

INCOME TAX ACT (CAP. 123)
Reduction of Additional Tax (Omissions) Rules, 2003
IN exercise of the powers conferred by article 96 and by sub-item (e) of item 3 of the Schedule to the Income Tax Act, hereinafter referred to as “the Act”, the Minister of Finance and Economic Affairs has made the following rules>-

Title and commencement.

Interpretation.

1. (1) The title of these rules is the Reduction of Additional
Tax (Omissions) Rules, 2003.
(2) These rules shall apply in respect of the year of assessment commencing on the 1st January 2003 and subsequent years of assessment.
2. (1) In these rules>-
“additional tax” means the additional tax chargeable in accordance with the provisions of article 56(12)(c) of the Act and the provisions of the Schedule in respect of any omission<
“omission” means the omission, or deemed omission, from any return of income submitted for the purpose of the Income Tax Acts of any amount which should have been included therein<
“Schedule” means the Schedule to the Act<
“tax professional” means an individual being the holder of a warrant issued under the Accountancy Profession Act (Cap 281), or a member of the Malta Institute of Taxation, or a member of the legal profession in Malta who specialises in taxation, or a partnership of such individuals the majority of whom are so qualified> provided that the Commissioner shall be entitled to request such proof as he may deem appropriate to the effect that an individual qualifies as a tax professional as aforesaid.
(2) Other words and expressions contained in these rules shall have the meaning assigned to them in the Income Tax Acts and in the Schedule to the Act.
3. (a) Where the Commissioner is satisfied that>-
(i) reasonable care has been taken by the person preparing and submitting the return or by the person responsible for its preparation and submission< or
(ii) the amount of the endangered tax is not material,
he may remit the whole of the additional tax otherwise due in accordance with the provisions of the Schedule.
(b) The Commissioner’s discretion for the purpose of this rule shall not be questioned in any appeal.
4. (1) For the purposes of rule 3 hereof, in determining whether reasonable care has been taken in the preparation and submission of a return, the Commissioner shall take account of>-
(a) whether a person has sought and relied on the written advice of a tax professional< and
(b) the complexity of the transaction which has resulted in an omission from the return or the complexity of the legal provisions concerned and the difficulties in their interpretation.
(2) The original written advice, referred to in item (a) of sub-rule (1) hereof is to be submitted together with the return by not later than the relative tax return date.
(3) An advice, referred to in item (a) of sub-rule (1) hereof, furnished by a tax professional, shall not of itself constitute a binding interpretation of the relative statutory provisions and views on their proper application.
(4) Rejection by the Commissioner of advice furnished by a tax professional shall not necessarily imply that a person has not taken reasonable care, unless the said advice is considered by the Commissioner to be spurious or frivolous.
5. Where an omission from a return is rectified by a person by means of the delivery of a further return made in accordance with article
13 of the Income Tax Management Act after that person has been notified in writing by the Commissioner that an enquiry will be conducted into that person’s tax declarations and liabilities, but not later than the last day of the month immediately following that in which the said
B 1463

Full remission of additional tax.

Where a person has taken reasonable care.

Reduction of additional tax on voluntary disclosure.

Cap.372.

B 1464

Reduction of additional tax by

90%.

L.N. 88 of 1998

.

(L.N. 102 of 1993

). Reduction of

additional tax by

50%.

notification is served, the additional tax shall be at the rate of one point five per cent (1.5%) of the endangered tax per month.
6. Additional tax chargeable shall be reduced by ninety per cent
(90%) of the full amount where the omission>-
(a) is of income from an employment or office which is included in a return submitted to the Commissioner in accordance with the provisions of the Final Settlement System (FSS) Rules,
1998< or
(b) is of investment income, as defined in the investment income provisions of the Act, subject to deduction of tax at source, irrespective of whether such tax has been deducted or not< or
(c) is of gains from the sale of immovable property chargeable under article 5 of the Act, and tax at the stipulated rate has been paid in accordance with article 43 of the Income Tax Management Act and rule 6 of the Capital Gains Rules, 1993.
7. Where an omission is not due to fraud, art, contrivance or gross or wilful neglect, the additional tax chargeable for an omission shall be reduced by fifty per cent (50%) of the full amount and the circumstances in which the additional tax is to be so reduced shall include where>-
(a) a person is or should be aware that an enquiry has been conducted into his tax declarations and liabilities and on which the additional tax in respect of the omission has been reduced according to the provisions of rule 6 hereof, but he again omits, from a return submitted after the outcome of the enquiry is known, an item which the enquiry has indicated should have been so included< or
(b) the omission is manifestly contrary to accepted principles and practices of tax law or accountancy, including, without limiting the generality thereof>
(i) over-claiming deductions against income chargeable under article 4(1)(b) of the Act<
(ii) claiming deductions for alimony payments when no right for such deductions exists<
(iii) failing to declare alimony payments received<
(iv) excessive or unjustified claims for deduction against rental income.
8. The reductions contemplated in rules 6 and 7 shall be applicable to the additional tax chargeable under the Schedule, whether reduced in accordance with the provisions of rule 5 hereof or not.
9. Where a reduction of additional tax is effected in accordance with the provisions of these rules, the applicable rate of additional tax referred to in item 5 of the Schedule shall be the rate of additional tax so reduced.
10. Nothing contained in these rules shall prevent the Commissioner from exercising any power vested in him to remit such part or all of the additional tax chargeable as he may deem fit, provided that>
(a) the Commissioner may impose as a condition for any such remission the requirement that the person concerned shall not make another omission within such period as the Commissioner may establish, as well as such other conditions as he may deem fit<
(b) should any condition imposed by the Commissioner in accordance with the provisions of paragraph (a) hereof be infringed by the person concerned, any reduction of additional tax granted by the Commissioner in addition to the reductions contemplated by the other provisions of these rules shall be forfeited<
(c) if forfeiture is so due, under the provisions of sub-rule (b) hereof, any additional reduction made under the provisions of this rule, but not under the provisions of the other rules hereof, shall be deemed to have been a suspension of liability to the said additional tax, and not the cancellation of the relevant additional tax<
(d) the Commissioner shall communicate in writing to the person concerned any condition imposed under sub-rule (b) hereof, the consequences of infringement of any such condition and, if such is the case, the fact that forfeiture has been incurred.
11. Decisions taken by the Commissioner regarding the application of these rules shall be subject to objection and appeal in accordance with the provisions of articles 35 and 37, respectively, of the Income Tax Management Act only as to whether, for the purpose of rule 4(4) hereof, a tax professional’s advice is to be considered as spurious or frivolous.
B 1465

Applicability of reduction in additional tax.

Maximum additional tax chargeable.

Certain powers of the Commissioner.

Appeals.

B 1466

Ippubblikat mid-Dipartiment ta’ l-Informazzjoni – 3, Pjazza Kastilja – Published by the Department of Information – 3, Castille Place

Mitbug[ fl-Istamperija tal-Gvern – Printed at the Government Printing Press

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