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The Budget Measures Implementation Act, 2011 (Bill No. 61)

BILL

entitled

AN ACT to implement Budget measures for the financial year 2011 and other administrative measures.

BE IT ENACTED by the President, by and with the advice and consent of the House of Representatives, in this present Parliament assembled, and by the authority of the same, as follows:-

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

Implementation Act, 2011.

Coming into force of this Part.

Interpretation. Cap. 174.

Authority to raise loan.

Cap. 161.

PART I

2. The provisions of this Part shall be deemed to have come into effect on the 1st January, 2011.

3. For the purpose of this Part, "revenue" has the same meaning as is assigned to it in article 2 of the Financial Administration and Audit Act, but does not include proceeds from 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 five hundred and seventy million euro.

(2) For the purpose of raising the aforesaid loan the Minister responsible for Finance is hereby authorised to issue stock in Malta under the provisions of the Local Loans (Registered Stock and Securities) Ordinance on such terms and conditions as the said Minister may approve.

Purpose. 5. Any money borrowed under the authority of this Part shall

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be appropriated and applied for the purpose of:
(a) meeting excess expenditure over revenue incurred in the Consolidated Fund for year 2011 and, or subsequent years;
(b) redeeming registered stocks which are due for redemption during 2011;
(c) repaying a bank loan originally granted to the Government of Malta to take over loan liabilities held in the name of Malta Drydocks Corporation; and
(d) effecting portfolio changes in relation to amounts raised through Treasury Bills, amounts raised through Government Stocks, and in respect of loans raised outside Malta as and when required in line with Government’s debt management policies.

PART II

6. (1) This Part of this Act amends the Income Tax Act and it shall be read and construed as one with the Income Tax Act, hereinafter in this Part referred as "the principal Act".

(2) The provisions of this Part shall come into force on such a date as the Minister of Finance may by notice in the Gazette establish, and different dates may be so established for different provisions or different purposes of this Part.

7. Subarticle (1) of article 2 of the principal Act shall be amended as follows:

(a) for the definition "petroleum", there shall be substituted the following:
" "petroleum" means crude oil of whatever density, natural gas and other hydrocarbons and substances that may be extracted therefrom;"; and
(b) immediately after the definition "property company", there shall be added the following new definition:
"property partnership" shall mean a partnership as defined in article 5(1)(b) which owns immovable property situated in Malta, or any real rights thereon, or a partnership which, directly or indirectly, holds shares or other proprietary interests in any entity or person, which owns immovable property situated in Malta, or any real

Amendment of the Income Tax Act.

Cap. 123.

Amendment of article 2 of the principal Act.

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rights thereon, where five percent or more of the total value of the said shares or other proprietary interests so held is attributable to such immovable property or rights:

Amendment of article 5 of the principal Act.

Provided that where a partnership, entity or person carrying on a trade or business owns immovable property situated in Malta, or any real rights thereon, consisting only of a factory, showroom, warehouse or office used solely for the purpose of carrying on such trade or business, such partnership, entity or person shall, for the purpose of this definition, be treated as not owning immovable property if not more then fifty percent of the value of its assets consist of immovable property situated in Malta, or any real rights over such property, and it does not carry on any activity the income from which is derived directly or indirectly from immovable property situated in Malta;".

8. Article 5 of the principal Act shall be amended as follows: (a) subarticle (1) thereof shall be amended as follows:

(i) in subparagraph (iv) of paragraph (a) thereof, for the words "subarticle (13)(b)(ii)." there shall be substituted the words "subarticle (13)(b)(ii);", and immediately thereafter there shall be added the following new subparagraph:
"(v) gains or profits arising from the transfer of the ownership or usufruct of or from the assignment or cession of any rights over any interest in a partnership. For the purposes of this subparagraph "transfer" shall mean:
(a) a transfer of a full or partial interest and any alienation of any such full or partial interest in a partnership; and
(b) a deemed transfer of an interest in the partnership. Where a person acquires or increases a partnership share there is a deemed transfer of an interest in the partnership to that partner from the other partners;" and
(ii) in paragraph (b) thereof, immediately before the definition "transfer", there shall be inserted the following new definitions:

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" "partnership" shall mean a commercial partnership en nom collectif, or commercial partnership en commandite the capital of which is not divided into shares and, except for the purposes of subparagraph (v)(b), shall include any other partnership having a legal personality distinct from that of its members other than a commercial partnership en commandite the capital of which is divided into shares;
"partnership share" means the share to which a person is entitled in the income of the partnership and to assets available for distribution on a winding up of the partnership;";
(b) immediately after subarticle (3) thereof, there shall be added the following new subarticle:
"(3A) For the purpose of ascertaining the gains or profits arising from any transfer of property in terms of sub-article (1)(a)(v):
(a) the acquisition cost in each of the circumstances mentioned in this paragraph shall, subject to any adjustments that may be prescribed, be determined as follows:
(i) the acquisition cost of an interest acquired from an existing partner shall be the actual purchase price;
(ii) the acquisition cost of an interest acquired causa mortis shall be the lower of the value declared in a deed of transfer causa mortis and the price which that interest would have fetched had it been sold on the open market on the date of that acquisition;
(iii) the acquisition cost of an interest acquired by way of a capital contribution made to the partnership shall be the amount or value of such contribution;
(iv) the acquisition cost of an

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interest resulting from a conversion of a company into a partnership as referred to in article 45A shall be the cost of acquisition of the shares (representing that interest) held in the company that had been converted into the said partnership:
Provided that where the said shares consist of shares whose return is limited to a fixed rate of return the acquisition cost shall be taken to be zero; and
(b) any transfer consisting of an exchange shall be considered as if two separate transfers were taking place; and
(c) the provisions of subarticle (2)(d), (e), and (f) and shall apply mutatis mutandis to this subarticle."; and
(c) immediately after subarticle (6) thereof, there shall be added the following new subarticle:

Amendment of article 5A of the principal Act.

"(6A) The provisions of subarticle (1)(a)(v) shall not apply to gains or profits relating to property transferred in the circumstances referred to in subarticle (5)(e) and (f).".

9. In paragraph (i) of subarticle (4) of article 5A of the principal Act, for the words "or any other provision of the Income Tax Acts or any other law." there shall be substituted the words "or any other provision of the Income Tax Acts or any other law;" and immediately thereafter there shall be added the following new paragraph:

"(j) a transfer of property consisting of a dwelling house by a company to its shareholder or to an individual related to its shareholder in the course of a distribution of assets pursuant to a scheme of distribution, where the said shareholder is an individual or his spouse, who owns or own all of the share capital (disregarding the holding of one share having no preferential rights) of the said company transferring the property as aforesaid. For the purpose of this paragraph an individual is related to the said shareholder if such individual is his spouse, descendant or ascendant in the direct line, or to the spouse of any such descendant or ascendant:
Provided that this paragraph shall only apply where the

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said shareholder held all of the share capital of the company transferring the property for a period of at least five years preceding the date of the transfer of the property as aforesaid or from the date the said company was incorporated if shorter:
Provided also that on a subsequent transfer of the said property by the said shareholder or related individual made within a period of seven years after the date of the acquisition thereof by the company, the cost and date of acquisition of the said property shall, where the transferor elects to exclude the transfer from the scope of this article, be the original cost and the date as and when acquired by the company and if the said seven year period has been exceeded the provisions of subarticle (3)(b) shall not apply to the said subsequent transfer:
Provided further that this paragraph shall only apply where the said property is held as a capital asset by the company and has been so held for a minimum period of five years preceding the date of the said transfer of the property as aforesaid or from the date the said company was incorporated, if shorter, and the said company did not at any time trade in property during the said period.".

10. Subarticle (1) of article 12 of the principal Act shall be amended as follows:

(a) in subparagraph (ii) of paragraph (c) thereof, for the words "long term policies of insurance and of any shares or securities in a company" there shall be substituted the words "long term policies of insurance, of any interest in a partnership which is not a property partnership and of any shares or securities in a company"; and
(b) for paragraph (p) thereof, there shall be substituted the following:
"(p) any dividend paid by a company whose main source of income in the relevant year is charged at the rate provided for in article 56(13) in respect of a Contractor;".

11. For article 23 of the principal Act there shall be substituted the following:

Amendment of article 12 of the principal Act.

Substitution of article 23 of the principal Act.

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"Profits from production of petroleum.

Cap. 156. Cap. 194. S.L. 156.01

23. (1) Where any person engaged in the business of exploration for, and the production of, petroleum (hereinafter referred to as "the Contractor") derives, or aims to derive, gains or profits through a Production Sharing Contract (hereinafter referred to as "the Contract" granted to such person by the Government of Malta by way of licence in accordance with the provisions of the Petroleum Production Act, the Continental Shelf Act and the Petroleum (Production) Regulations, or any provision amending or substituting the said Acts or Regulations, the chargeable income of the said person from such business shall be determined as set out in this article.
(2) (a) The gains or profits derived by the Contractor from the production of petroleum for any basis year, being the year immediately preceding a year of assessment, shall be arrived at by deducting the recoverable costs as defined in the Contract and not yet fully recovered by the Contractor, from the total of the value of the cost recovery petroleum and of the share of profit petroleum, as defined in the Contract, allotted to the Contractor for that year, to which shall be added any ancillary or incidental income for the same year.
(b) Where after such deduction as is referred to in paragraph (a) there remains any balance of unabsorbed recoverable costs, the amount of such unabsorbed costs shall be carried forward to the following year and shall be added to and become part of the recoverable costs for that year.
(c) The procedure referred to in paragraph (b) shall be followed in subsequent years until all recoverable costs shall have been absorbed.

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Cap. 372.

(3) (a) For the purposes of this article, particularly for the purposes of subarticle (2), each Contract shall be deemed to constitute a separate and distinct source of income and any Contractor deriving gains or profits from more than one Contract shall be subject to tax as if he were a separate and unconnected person with respect to each such Contract.
(b) Where more than one petroleum field is in production in an area covered by the same Contract, the gains or profits from each such field shall be determined as if each such field constitutes a separate and distinct source of income arising to a separate person, so however that the Contractor shall have the right to identify the fields in the said area where the cost of exploration and development operations are to be taken into account in determining the relative gains or profits.
(4) The provisions of articles 16 to 22 shall not apply in the case of any company in any year in which the company is operating under a licence referred to in subarticle (1).
(5) (a) Notwithstanding anything contained in the Income Tax Acts, where a non-resident sub-contractor renders services to a Contractor in Malta, such Contractor shall withhold tax at the rate set out in article
56(13)(b) on payments made to the sub- contractor for services rendered in Malta and
shall pay to the Commissioner any tax so withheld within thirty days from the making of the deduction.
(b) Where a Contractor fails to deduct and pay tax in accordance with paragraph (a), the provisions of article 73(4) of this Act and of article 40(1) of the Income Tax Management Act shall apply mutatis mutandis.

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Amendment of article 56 of the principal Act.

(c) The tax withheld in accordance with paragraph (a) shall be considered as a final withholding tax unless the sub- contractor notifies the Commissioner that this tax is to be considered as a provisional tax payment to be credited against the tax liability of the said sub-contractor’s chargeable income for the relevant year of assessment computed in accordance with the provisions of the Act.
(d) The notification referred to in paragraph (c) shall be made by not later than the tax return date for the relevant year of assessment and in such form as the Commissioner may require.
(6) Except for gains or profits derived from the production of petroleum referred to in subarticles (1) and (2), any income or deemed income derived by a Contractor and subject to tax under any of the provisions of this Act shall be so brought to charge in accordance with the said provisions and at the applicable rates, but no deduction shall be granted thereagainst in respect of any loss or outgoing expense incurred in connection with the exploration for or the production of petroleum.".

12. Article 56 of the principal Act shall be amended as follows:

(a) for subarticle (13) thereof there shall be substituted by the following:
"(13) (a) The tax upon the chargeable income of any person referred to as a Contractor in article 23 shall be levied at the rate of 35 cents (€0.35) on every euro of the chargeable income in so far as such income is to be computed in accordance with the provisions of the said article 23(1) and (2). Other income arising to a Contractor shall be charged at the appropriate rate or rates.
(b) The rate at which tax shall be withheld by a Contractor from payments made to a sub-contractor in accordance with the provisions of article 23(5) shall be at
10 cents (€0.10) of every euro of the payments made as
aforesaid."; and

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(b) subarticles (14), (15) and (16) thereof shall be deleted.

13. In paragraph (a) of subarticle (1) of article 59 of the principal Act, the words "and other than a dividend referred to in article 12(1)(p)" shall be deleted.

14. In subarticle (1) of article 76 of the principal Act, for the words "other enactment:" there shall be substituted the words "other enactment.", and the proviso thereto shall be deleted.

15. For subarticle (7) of article 89 of the principal Act, there shall be substituted the following:

"(7) The provisions of this article shall not apply in the case of gains or profits referred to in article 23.".

PART III

16. (1) This Part of this Act amends the Duty on Documents and Transfers Act and it shall be read and construed as one with the Duty on Documents and Transfers Act, hereinafter in this Part referred as "the principal Act".

(2) The provisions of this Part shall come into force on such a date as the Minister of Finance may by notice in the Gazette establish, and different dates may be so established for different provisions or different purposes of this Part.

17. Article 2 of the principal Act shall be amended as follows: (a) for the definition "body of persons" there shall be

substituted the following:
" "body of persons" includes any company, partnership, fellowship, society of persons, or other association of persons, whether corporate or unincorporate, and whether vested with legal personality or not;"; and
(b) immediately after the definition "Commissioner" there shall be added the following new definition:
" "company" has the same meaning assigned to it in article 2(1) of the Income Tax Act;"; and
(c) immediately after the definition "Minister" there shall be added the following new definition:
" "partnership" shall mean a commercial

Amendment of article 59 of the principal Act.

Amendment of article 76 of the principal Act.

Amendment of article 89 of the principal Act.

Amendment of the Duty on Documents and Transfers Act. Cap. 364.

Amendment of article 2 of the principal Act.

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Addition of new article to the principal Act.

partnership en nom collectif or commercial partnership en commandite the capital of which is not divided into shares and any other partnership having a legal personality distinct from that of its members other than a commercial partnership en commandite the capital of which is divided into shares;".

18. Immediately after article 42B of the principal Act there shall be added the following new article:

"Duty on transfer of an interest in a partnership.
42C. (1) A duty of two euro for every one hundred euro or part thereof of the amount or value of the consideration or the real value, whichever is the higher, of an interest in a partnership shall be charged:
(a) on every document whereby an interest in a partnership, other than in a foreign partnership, is transferred to or by any person in Malta;
(b) on every deemed transfer of an interest in a partnership, other than in a foreign partnership;
For the purpose of this article a transfer of an interest in a partnership shall include a transfer of a full or partial interest and any alienation of any such full or partial interest in a partnership and the term "foreign partnership" shall mean a partnership which does not hold, directly or indirectly, any immovable property situated in Malta or any real rights over such property (hereinafter referred to as "property in Malta") and the management and control of its business is exercised outside Malta.
For the purpose of the preceding paragraph a partnership is treated as indirectly owning property in Malta if it holds, directly or indirectly, any shares or interests in a body of persons, which owns property in Malta.

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(2) The provisions of article 42(2) shall apply mutatis mutandis to this article and references to the term "company", where applicable, shall be deemed to be references to a "partnership" and references to "subarticle (1)" shall be deemed to be references to "subarticle (1) of article 42C".
(3) For the purpose of subarticle (1)(b) where a person acquires or increases a partnership share, there shall be a deemed transfer of an interest in the partnership (to that partner and from the other partners). "Partnership share" means the share to which a person is entitled in the income of the partnership and to the assets available for distribution on the winding up of the partnership:
Provided that this subarticle shall only apply where the partnership in question is a commercial partnership en nom collectif or commercial partnership en commandite the capital of which is not divided into shares.
(4) Notwithstanding the provisions contained in this Act, the Minister may make rules determining the method of calculation of the amount or value chargeable to duty in relation to a transfer or deemed transfer of an interest in a partnership and to prescribe any matter that may be prescribed in relation to such transfer.".

19. Article 47 of the principal Act shall be amended as follows:

(a) in subarticle (9) thereof, for the words "the relevant conditions and provisions are satisfied." there shall be substituted the words "the relevant conditions and provisions are satisfied:" and immediately thereafter there shall be added the following new proviso:
"Provided that any such determination made in relation to a company which falls under subarticle (3)(c), shall, in so far as it is valid as at 31st December, 2010, be considered, as from 1st January, 2011, to be a determination made in relation to a company which falls under subarticle (3)(e)."; and

Amendment of article 47 of the principal Act.

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(b) in paragraph (a) of subarticle (10) thereof for the words "company the assets of which consist wholly or principally of immovable property situated in Malta" there shall be substituted the words " "property company" as defined in article 2(1) of the Income Tax Act".

Amendment of the Motor Vehicles Registration and Licensing Act. Cap. 368.

Amendment of article 2 of the principal Act.

Amendment of article 9 of the principal Act.

Amendment of article 19 of the principal Act.

PART IV

20. (1) This Part of this Act amends the Motor Vehicles Registration and Licensing Act and it shall be read and construed as one with the Motor Vehicles Registration and Licensing Act, hereinafter in this Part referred as "the principal Act".

(2) The provisions of this Part shall be deemed to have come into force on the 1st January, 2011.

21. In the definition "special purpose vehicle" in article 2 of the principal Act, for the words "and comprising those listed in the First Schedule" there shall be substituted the words "and classified under the First Schedule".

22. In the Maltese version of subarticle (2) of article 9 of the principal Act, for the words "Il-valur ta’ reġistrazzjoni ta’ vettura bil- mutur fil-kategorija M1 ġdida, motor cycle, quad bike," there shall be substituted the words "Il-valur ta’ reġistrazzjoni ta’ vettura bil-mutur użata fil-kategorija M1, motor cycle, quad bike;".

23. For the proviso to subarticle (3)(i) of article 19 of the principal Act there shall be substituted the following:

"Provided that the vehicle has been registered in the name of that person or in the name of his or her spouse for at least twenty-four consecutive months at the time of transfer of residence to Malta and that person has been residing outside Malta for a continuous period of at least twenty-four months at the time of transfer of residence to Malta:
Provided further that where a motor vehicle is brought or imported into Malta not more than six months before the time of transfer of residence by the person transferring his residence, that vehicle shall qualify for the exemption if both the said vehicle and the person transferring his residence meet the conditions prescribed in regulations made under this Act:
Provided further that that person shall not have been granted an exemption from registration tax in respect of another motor vehicle in the previous eight years;".

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24. Article 24 of the principal Act shall be amended as follows:

(a) in the marginal note thereto for the words "in 2008 and in 2009" there shall be substituted the words "in 2010";

Amendment of article 24 of the principal Act.

and
(b) subarticles (1), (2) and (3) thereof shall be deleted;
(c) subarticle (4) thereof shall be renumbered as the whole article and shall be amended as follows:
(i) in paragraph (a) thereof, for the words "9th November, 2009" there shall be substituted the words "25th October, 2010"; for the words "1st December, 2009" there shall be substituted the words "1st December, 2010"; and for the words "1st January, 2010" there shall be substituted the words "1st January, 2011";
(ii) in paragraph (b) thereof, for the words "1st January, 2010" there shall be substituted the words "1st January, 2011";
(iii) in paragraph (c) thereof, for the words "9th November" there shall be substituted the words "25th October, 2010", and for the words "31st December, 2009", wherever they appear, there shall be substituted the words "31st December, 2010"; and
(iv) in paragraph (f) thereof, for the words "9th November, 2009" there shall be substituted the words "25th October, 2010", for the words "1st January, 2010", wherever they appear, there shall be substituted the words "1st January, 2011", and for the words "31st October,
2010" there shall be substituted the words "31st October,
2011".

25. For Category A of the First Schedule to the principal Act, there shall be substituted the following:

"Category A: N1, N2 and N3 vehicles, special purpose vehicles and tractor units
N1 vehicles, special purpose vehicles and tractor units

Latest Euro standard

vehicles with a maximum authorised mass of up

to 1,305 kg Kg x 0.40 + cc x 0.45 x €1

Amendment of the First Schedule to the principal Act.

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N2 vehicles, special purpose vehicles and tractor units

N3 vehicles, special purpose vehicles and tractor units

Latest Euro standard and Latest Euro standard -1

vehi cl es wi th a m a xi mum authorised mass

exceeding 12,000 0

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Tax rate formula:
Following the application of the relevant tables under the heading, the total amount of the registration tax shall be equal to the sum total of the maximum authorised mass (kg) of a motor vehicle multiplied by the factor indicated plus the cubic capacity (cc) of the engine of a motor vehicle multiplied by the factor indicated multiplied by €1, multiplied by the difference between 100% and the aggregate percentage consisting of the percentage of the total annual depreciation as specified in the table hereunder plus 0.5% for each 10,000 kms showing on a vehicle’s odometer:
{[(kg x Y) + (cc x Y)] x €1} x {100% - [Y% of total annual depreciation + 0.5% for each 10,000 kms]}
Provided that the maximum depreciated value of a motor vehicle in this category shall not exceed 95%, and once this value is reached there shall be no further reductions.
Depreciation according to age of vehicle

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For the purpose of registration tax, where a vehicle used for the transport of goods (N1, N2 and N3), or a special purpose vehicle or a tractor unit, whose year of manufacture falls under any of the following years of manufacture, is not accompanied by a certificate showing the emission levels equivalent to Euro standards, the registration tax rates to be paid thereon shall be equivalent to those under the different Euro standards:

Amendment of the Second Schedule to the principal Act.

Where an importer or dealer or owner of a motor vehicle provides a certificate as approved by an accredited technical service established within a Member State, that the engine of that particular vehicle meets lower emissions despite the vehicle’s year of manufacture, that vehicle shall on registration be taxed the rate pertaining to its equivalent Euro standard.".

26. The Second Schedule to the principal Act shall be amended as follows:

(a) in the heading thereof, for the words "quadricycles and motor cycles (including electric and hybrid electric motor vehicles)" there shall be substituted the words "quadricycles, motor cycles and quad bikes (including electric and hybrid electric motor vehicles)";
(b) for the words "Category A: M1 motor vehicles (including vehicles to be registered to be used as taxicars, self- drive vehicles and chauffeur driven vehicles), motor cycles, quadricycles and quad bikes, whether new or used:" there shall be substituted the words "Category A: M1 motor vehicles (including vehicles to be registered to be used as taxicars, self- drive vehicles and chauffeur driven vehicles), whether new or used:";

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(c) in paragraph (5) under the heading "Tax Rate Formula" thereof, for the words "20%" there shall be substituted the words "30%"; and
(d) for item 2 of Category F thereof, there shall be substituted the following:
"2. M2 and M3 motor vehicles, including trackless trains and amphibious motor vehicles

Latest Euro standard -3 and older

M2 Kg x 12.00 + cc x

15.00 x €1

M3 Kg x 10.00 + cc x

12.00 x €1

Latest Euro standard -2

Kg x 1.50 + cc x

2.40 x €1

Kg x 2.20 + cc x

2.60 x €1

Latest Euro standard and Latest Euro standard -1

0

0

In respect of the total amounts of registration tax reached using any of the above formulas, these shall be multiplied by the difference between 100% and the aggregate percentage consisting of the percentage of the total annual depreciation as specified in the table titled "Depreciation according to age of vehicle" in Category A of the First Schedule hereof, plus 0.5% for each 10,000 kms showing on a vehicle’s odometer.
For the purpose of registration tax, where an M2 or M3 vehicle, whose year of manufacture falls under any of the following years of manufacture, is not accompanied by a certificate showing the emission levels equivalent to Euro standards, the registration tax rates to be paid thereon shall be equivalent to those under the following different Euro standards:

Where an importer or dealer or owner of a motor vehicle provides a certificate as approved by an accredited technical service established within a Member State, that the engine of that particular vehicle meets lower emissions despite the vehicle’s year of manufacture, that vehicle shall on registration be taxed the rate pertaining to its equivalent Euro standard.".

27. For item 16 of the Fourth Schedule to the principal Act, there shall be substituted the following:

"16. For the use of an electric motor vehicle, including

Amendment of the Fourth Schedule to the principal Act.

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motor cycles ....................................................................... €0".

Amendment of the Income Tax Management Act.

Cap. 372.

Amendment of article 20 of the principal Act.

Amendment of article 52 of the principal Act.

PART V

28. This Part of this Act amends the Income Tax Management Act and it shall be read and construed as one with the Income Tax Management Act, hereinafter in this Part referred as "the principal Act".

29. In subarticle (1) of article 20 of the principal Act, for the words "to inspect any books, documents, accounts and returns" there shall be substituted the words "to inspect any books, documents, accounts, returns and electronic data", and for the words "determining the said value but shall not have any power under this article to seize any item or remove it from the premises:" there shall be substituted the words "determining the said value:".

30. Subarticle (1) of article 52 of the principal Act shall be amended as follows:

(a) in paragraph (e) thereof, for the words "art or contrivance,", there shall be substituted the words "art or contrivance; or";
(b) immediately after paragraph (e) thereof there shall be added the following new paragraphs:
"(f) has in his possession or under his control any article for use in the course of or in connection with altering, destroying, erasing or concealing any information, records or evidence which he knows or is reasonably expected to know to be relevant for any purpose of this Act; or
(g) makes, adapts, supplies or offers to supply any article knowing that it is designed or adapted for use in the course of or in connection with altering, destroying, erasing or concealing any information, records or evidence which he knows or is reasonably expected to know to be relevant for any purpose of this Act, or intending it to be used to commit, or assist in the commission of fraud; or
(h) alters, destroys, conceals, covers up, falsifies, or makes a false entry in any record, document, electronic data or tangible object,"; and
(c) immediately after paragraph (h), as added by this article, for the words "shall be guilty of an offence, and shall for

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each such offence be liable on conviction before a Court of Magistrates sitting as a court of criminal judicature to a fine (multa) of not less than one hundred and sixteen euro (116) and not exceeding four hundred and sixty-five euro (465) and, in addition, to treble the amount of tax to which the person whose tax liability it was intended to evade or to assist in evading is liable under the Income Tax Acts for the year of assessment in respect of or during which the offence was committed, or to imprisonment for any term not exceeding six months, or to both such fine and imprisonment.", there shall be substituted the words:
"shall be guilty of an offence, and shall be liable on conviction before a Court of Magistrates sitting as a court of criminal judicature -
(i) to a fine (multa) not less than seven hundred euro (€700) and not exceeding three thousand five hundred euro (€3,500) in the case of any offence committed under paragraphs (a) to (d); and
(ii) to a fine (multa) of not less than six thousand euro (€6,000) and not exceeding ten thousand euro (€10,000) for an offence committed under paragraphs (e) to (h),
and, in addition, for each offence as above referred to in paragraphs (a) to (h), to treble the amount of tax to which the person whose tax liability it was intended to evade, or to assist in evading, is liable under the Income Tax Acts for the year of assessment in respect of or during which the offence was committed, or to imprisonment for any term not exceeding six months, or to both such fine and imprisonment.
For the purposes of paragraphs (f) and (g) the term
"article" includes any program or data held in electronic form.".

31. Article 58 of the principal Act shall be amended as follows:

(a) paragraph (c) thereof shall be renumbered as paragraph (d); and
(b) in paragraph (b) thereof, for the words "the said Acts and regulations; and" there shall be substituted the words "the said Acts and regulations;", and immediately thereafter there shall be added the following new paragraph:

Amendment of article 58 of the principal Act.

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"(c) for the fees to be levied in relation to the issue of tax residency certificates and applications for rulings in terms of article 52 of the Income Tax Act; and".

PART VI

Amendment of the Excise Duty Act.

Cap. 382.

Amendment of the First Schedule to the principal Act.

Amendment of the Second Schedule to the principal Act.

32. (1) This Part of this Act amends the Excise Duty Act and it shall be read and construed as one with the Excise Duty Act, hereinafter in this Part referred as "the principal Act".

(2) The provisions of this Part shall be deemed to have come into force on the 26th October, 2010, except for article 36(e), which shall come into force on 1st January, 2011.

33. The First Schedule to the principal Act shall be amended as follows:

(a) immediately beneath the item "Mobile Telephony Services" in the "First Column - List of Excise Goods" Column there shall be added the item "Cement"; and
(b) immediately beneath the item "Fifth Schedule" in the "Second Column - Relevant Schedule" column there shall be added the item "Schedule Five A".

34. The Second Schedule to the principal Act shall be amended as follows:

(a) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Beer", there shall be substituted the following:
"€1.50 per hectolitre per degree Plato";
(b) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Beer if produced by small and independent breweries with an annual production not exceeding
200,000 litres", there shall be substituted the following: "€0.75 per hectolitre per degree Plato"; and
(c) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Products containing a mixture of beer with non-alcoholic drinks", there shall be substituted the following:
"€0.25 per hectolitre per degree Plato".

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35. The Third Schedule to the principal Act shall be amended as follows:

(a) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Cigarettes", there shall be substituted the following:
"47.0% of the retail price plus €28.00 per 1000 cigarettes but not less than €120.50 per 1000 cigarettes";
(b) for the words in paragraph 1.b. in the "Description of Excise Goods" Column under the heading "Cigarettes", there shall be substituted the following:
"A roll of tobacco referred to in paragraph 1.a.i. shall, for excise duty purposes, be considered as two cigarettes where, excluding filter or mouthpiece, it is longer than 8 cm but not longer than 11 cm, as three cigarettes where, excluding filter or mouthpiece, it is longer than 11 cm but not longer than 14 cm, and so on.
Products consisting in whole or in part of substances other than tobacco but otherwise conforming to the criteria set out in sub-paragraph a.i. to iii. above shall be treated as cigarettes and the provisions of this sub- paragraph shall apply thereto.";
(c) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Cigars and Cigarillos", there shall be substituted the following:
"€16.90 per 1000 units";
(d) for the words from "The following shall be deemed to be cigars or cigarillos" to the words "- a wrapper of reconstituted tobacco." under the heading "Cigars and Cigarillos" in the "Description of Excise Goods" Column there shall be substituted the following:
"The following shall be deemed to be cigars or cigarillos if they can be and, given their properties and normal consumer expectations, are exclusively intended to be smoked as they are:
i. rolls of tobacco with an outer wrapper of natural tobacco;
ii. rolls of tobacco with a threshed blend

Amendment of the Third Schedule of the principal Act.

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filler and with an outer wrapper of the normal colour of a cigar, of reconstituted tobacco, covering the product in full, including, where appropriate, the filter but not, in the case of tipped cigars, the tip, where the unit weight, not including filter or mouthpiece, is not less than 2,3 g and not more than 10 g, and the circumference over at least one third of the length is not less than 34 mm.
Products which consist in part of substances other than tobacco but otherwise fulfil the criteria set out above shall be treated as cigars and cigarillos.";
(e) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Hand-Rolling Tobacco", there shall be substituted the following:
"€75.40 per kg.";
(f) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Other Smoking Tobacco", there shall be substituted the following:
"€75.40 per kg.";
(g) for the words from "The following shall be deemed to be smoking tobacco" to the words "set out in indents ( i) and (ii) above shall be treated as smoking tobacco." under the heading "Other Smoking Tobacco" in the "Description of Excise Goods" Column there shall be substituted the following:
"The following shall be deemed to be smoking tobacco:
i. tobacco which has been cut or otherwise split, twisted or pressed into blocks and is capable of being smoked without further industrial processing;
ii. tobacco refuse put up for retail sale which does not fall under the definition of cigars and cigarillos or cigarettes and which can be smoked. For the purpose of this paragraph, "tobacco refuse" shall be deemed to be remnants of tobacco leaves and by-products obtained from tobacco processing or the manufacture of tobacco products.
Smoking tobacco as defined above in which more

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than 25% by weight of the tobacco particles have a cut width of less than 1.5 mm shall be deemed to be fine-cut tobacco for the rolling of cigarettes.
Smoking tobacco in which more than 25% by weight of the tobacco particles have a cut width of 1.5 mm or more and which was sold or intended to be sold for the rolling of cigarettes may also be deemed to be fine-cut tobacco for the rolling of cigarettes.
Products consisting in whole or in part of substances other than tobacco but otherwise conforming to the criteria set out in sub-paragraphs i. and ii. above shall be treated as smoking tobacco.";
(h) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Pipe Tobacco", there shall be substituted the following:
"€23.96 per kg."; and
(i) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Chewing Tobacco and Snuff", there shall be substituted the following:
"€32.82 per kg.".

36. The Fourth Schedule to the principal Act shall be amended as follows:

(a) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Leaded Petrol", there shall be substituted the following:
"€588.18 per 1,000 litres";
(b) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Unleaded Petrol", there shall be substituted the following:
"€469.38 per 1,000 litres";
(c) for the words in the "Description of Excise Goods" column "Gas Oil falling within CN Codes 2710.19.41 to
2710.19.49 excluding Gas Oil falling within 2710.19.49 if used for heating purposes" there shall be substituted the words "Gas Oil falling within CN Codes 2710.19.41 to 2710.19.49 and blends of the foregoing with Biodiesel, excluding Gas Oil or

Amendment of the Fourth Schedule to the principal Act.

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Gas Oil blended with Biodiesel, with a sulphur content not exceeding 0.1% sulphur by weight if used for heating purposes"; and for the words "€352.40 per 1000 litres" in the relative "Rate of Excise Duty" column thereof there shall be substituted the words "€382.40 per 1000 litres";
(d) for the words in the "Description of Excise Goods" column "Gas Oil falling within CN 2710.19.49 if used for heating purposes" there shall be substituted the words "Gas Oil or Gas Oil blended with Biodiesel, with a sulphur content not exceeding 0.1% sulphur by weight if used for heating purposes"; and for the words "€96.79 per 1000 litres" in the relative "Rate of Excise Duty" column thereof there shall be substituted the words "€142.09 per 1000 litres";
(e) for the words in the "Description of Excise Goods" column "Biodiesel (a mixture of biomass and gas oil)" there shall be substituted the words "Biodiesel, a diesel quality liquid fuel produced from biomass or waste cooking oil, with an ester content of not less than 96.5% by weight and a sulphur content not exceeding 0.005%, whether in blend or not"; and for the words "€352.40 per 1000 litres" in the relative "Rate of Excise Duty" column thereof there shall be substituted the words "€382.40 per 1000 litres";
(f) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Heavy Fuel Oil", there shall be substituted the following:
"€30.00 per 1000 Kgs.";
(g) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Kerosene", there shall be substituted the following:
"€382.40 per 1000 litres";
(h) for the words in the "Rates of Excise Duty" column thereof in respect of the item "Electricity", there shall be substituted the following:
"€1.50 per MWh"; and
(i) the following words in the "Description of Excise Goods" column under the title "EXEMPTIONS" shall be deleted:
"The biomass content (i.e. the percentage element)

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in Biodiesel is exempted from the payment of excise duty under fiscal control where such energy products are made up of, or contain, one or more of the following products:
- products falling within CN Codes 1507 to 1518;
- products falling within CN Codes
3824.90.55 and 3824.90.80 to 3824.90.99 for their components produced from biomass;
- products falling within CN Codes
2207.20.00 and 29 05 11 00 which are not of synthetic origin;
- products produced from biomass, including products falling within CN Codes 4401 and 4402;
- products which contain water (CN Codes 2201 and 2851.00.10).
"Biomass" shall mean the biodegradable fraction of products, waste and residues from agriculture (including vegetal and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste.".

37. Immediately after the Fifth Schedule of the principal Act there shall be added the following new Schedule:

"SCHEDULE FIVE A

PART VII

Addition of new Schedule to the principal Act.

38. (1) This Part of this Act amends the Value Added Tax Act and it shall be read and construed as one with the Value Added Tax Act, hereinafter in this Part referred as "the principal Act".

(2) The provisions of this Part shall come into force on such a date as the Minister of Finance may by notice in the Gazette establish, and different dates may be so established for different provisions or different purposes of this Part.

Amendment of the Value Added Tax Act.

Cap. 406.

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Amendment of article 32 of the principal Act.

Amendment of article 77 of the principal Act.

39. Immediately after subarticle (4) of article 32 of the principal Act, there shall be inserted the following new subarticle:

"(5) The Commissioner may, for the purposes of this Act, cancel any provisional assessment raised by him, and issue a fresh provisional assessment, and such cancellation shall be without prejudice to the raising of a fresh provisional assessment required to be raised under this Act in replacement of the provisional assessment so cancelled which shall be deemed not to have been raised.
Such fresh provisional assessment has to be raised within the time limit specified in subarticle (1).".

40. Article 77 of the principal Act shall be amended as follows:

(a) in paragraph (d) thereof, for the words "documents or accounts;", there shall be substituted the words "documents or accounts, or is in possession of or supplies to another person any software application that would erase, destroy, damage or conceal any stored information or any such records, documents or accounts;";
(b) in paragraph (e) thereof, for the words "which is incorrect or misleading in any material respect", there shall be substituted the words "which is incorrect or misleading in any material respect or fails to provide to the Commissioner, without any valid reason, all copies of any used or unused manual fiscal receipts where required by the Commissioner" and
(c) for the words "shall be guilty of an offence and shall, on conviction, be liable to a fine (multa) of not less than seven hundred euro (€700) and not exceeding three thousand five hundred euro (€3,500) and, except for paragraph (p), to a further fine (multa) equal to ten times the endangered tax or to imprisonment of not more than six months or to both such fines and imprisonment" there shall be substituted the words:
"shall be guilty of an offence and shall, on conviction, be liable -
(i) to a fine (multa) of not less than six thousand euro (€6,000) and not exceeding ten thousand euro (€10,000) for an offence committed under paragraphs (c) and (d); and

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(ii) to a fine (multa) of not less than seven hundred euro (€700) and not exceeding three thousand five hundred euro (€3,500) for an offence under the other paragraphs,
and, in addition, for any offence as above referred to in all paragraphs, except for paragraph (p), to a further fine (multa) equal to ten times the endangered tax or to imprisonment of not more than six months or to both such fines and imprisonment.".

Objects and Reasons

The objects of this Bill are to implement various Budget measures and other administrative measures.