Legal Notices Q1 2018

L.N. 9 of 2018 – VALUE ADDED TAX (AMENDMENT OF FIFTH SCHEDULE) REGULATIONS, 2018

The list of “Exemptions without credit” in the category of letting of immovable property now includes “the letting to players of rooms or other spaces lawfully designated for the playing of poker”.

L.N. 22 of 2018 – TAX REBATE (PENSIONERS) (AMENDMENT) RULES, 2018

During 2017, the Government introduced a tax rebate for pensioners. From 1 January 2018, the tax rebates applicable to pensioners have been increased.

For pensioners taxed at the single rates receiving pension income of:

• less than €9,100, the rebate is capped at €615, instead of €210;
• less than €10,500, the rebate is capped at €405, instead of €150.

For pensioners taxed at the married rates receiving pension income of less than €12,700, the rebate is capped at €75, instead of €45 – this may be increased by a further €150 in certain instances.

L.N. 37 of 2018 – NOTIONAL INTEREST DEDUCTION RULES, 2018

This legal notice replaced the Notional Interest Deduction Rules, 2017.

The NID Rules, 2018 are intended to equate the tax treatment in Malta between debt and equity by enabling companies and partnerships resident in Malta, and Malta permanent establishments of foreign companies or partnerships, to claim a deduction of notional interest on “risk capital”.

The NID may be claimed against profits other than profits derived from Maltese immovable property and is capped at 90% of the entity’s eligible profits for the year. 

L.N. 38 of 2018 – TAX ACCOUNTS (INCOME TAX) AMENDMENT RULES, 2018

Through this amendment, tax accounting rules for entities claiming a notional interest deduction have been put in place.

L.N. 39 of 2018 – DUTY ON THE ACQUISITION OF THE SECOND IMMOVABLE PROPERTY TO BE USED AS SOLE RESIDENCE (EXEMPTION) ORDER, 2018

This exemption applies to individuals who transfer immovable property used as their sole residence and acquire another immovable property to be used for the same purpose. If the second property is acquired within 12 months from the date of transfer of the original property, the duty paid on the first €86,000 of the value of the second property shall be refunded, provided that certain conditions are satisfied.

Where the individual replacing his sole residence is a person with a disability, the duty paid on the first €150,000 of the value of the second property is refunded.

L.N. 67 of 2018 – DEDUCTION FOR TRANSPORATION COST OF EMPLOYEES RULES, 2017

Taxpayers can claim a tax deduction of 150% of the costs incurred for the transportation of employees to and from the place of work using vehicles capable of carrying more than 8 persons.

The deduction may be claimed on the lower of €25,000 of the transportation costs or €300 per employee whose transportation costs have been incurred by their employer.

This tax incentive is one of the measures aimed at improving road traffic congestion and is currently open for years of assessment 2018 to 2020 i.e. basis years 2017 to 2019.

L.N. 68 of 2018 – QUALIFYING EMPLOYMENT IN INNOVATION AND CREATIVITY (PERSONAL TAX) (AMENDMENT) RULES, 2018

The timeline for the application of these rules has been extended to 31 December 2018 (previously 31 December 2017).

L.N. 82 of 2018 – DUTY ON DONATIONS OF MARKETABLE SECURITIES AND IMMOVABLE PROPERTY USED FOR BUSINESS (EXEMPTION) (AMENDMENT) ORDER, 2018

The application of the reduced 1.5% duty rate on qualifying intra-family transfers has been extended by six months, until 30 September 2018. For further details on donations eligible for a reduced rate of duty, please refer to:  Reduction in the Rate of Duty on Donations of Shares and Business Property Between Family Members – Applicable to Donations Made Before 1 April 2018