Income Tax Act (Cap. 123), article 31D

31D. (1) Notwithstanding any other provision of the Income Tax Acts or any regulations made thereunder, the provisions of this article shall apply where, durin g a relevant year, any person r ents a tenement. (2) The tax chargeable in the circumstances mentioned in sub- article (1) shall, at the option of the person referred to in t he said sub-article, be at the rate of f ifteen cents (0.15) on every eu ro of the gross rental income received. Such tax shall be final and notwithstanding any other provision of the Income Tax Acts, no set-off or refund shall be gran ted to any person in respect of the tax so charged: Provided that the tax chargeable on rent derived from a long private residential lease shall be abated in such circumstances and by such amounts as may be prescribed. (3) Where the option referred to in sub-article (2) has been exercised, such income shall be deemed to const itute separate 136 CAP. 123.] INCOME TAX chargeable income for the purpose of the Income Tax Acts and shall not form part of the chargeable income of the person exercising the said option and where such person is an individu al he shall not be required to declar e such income, in any return made pursuant to the Income Tax Acts. (4) Where a person, in a relevant year, derives rental income from the letting of more than one tenement and the option refer red to in sub-article (2) has been exercised for such year, the sai d sub- article shall apply to the total rental income received in the said year from all the tenement s let out by such person. (5) Irrespective of whether the o ption referred to in sub-articl e (2) is exercised or not, where an enquiry has been conducted an d the Commissioner determines that any rental income which should have been declared was not so declared, such income shall be charged to tax at the rate of 35 cents (0.35) on every euro of the gross rental income received and such tax shall be in addition to any interest and additional tax p ayable under the Income Tax Ac ts. Such tax shall be final and notwithstanding any other provision of the Income Tax Acts, no set-off or refund shall be granted to a ny person in respect of the tax so charged. (6) Every company resident in Malta shall allocate the distributable profits resulting from income to which this artic le applies, and on which tax is pa yable in accordance with this ar ticle, to the final tax account. Cap. 372. (6A) Where an individual has fa iled to declare rental income derived from a tenement leased a s a residence or garage during the relevant period in any return and such individual opts to decla re such rental income in the relevant form referred to in article 42(4)( c) of the Income Tax Management Act , which is required to be submitted by not later than the 30th June 2015, and pays the tax referred to in sub-article (2) of this article on such rental i ncome, it shall be deemed for the purpose o f the Income Tax Acts that suc h rental income was received during basis year 2014. The individu al exercising the said option shall pay to the Commissioner the ta x in such manner as may be prescr ibed in accordance with the provisions of article 42 of the Income Tax Management Act : Provided that where an indivi dual exercises the said option and declares rental income for m ore than one year, the total am ount subject to the tax referred to in sub-article (2) of this artic le shall not exceed an amount det ermined as follows: Y = (a / b) x 2 Where - (a) "Y" represents the am ount to be determined; (b) "a" is the total rental income declared in the said relevant form; (c) "b" is the number of years comprised in the relevant period in respect of which rental income is declared: Provided also that where following an enquiry there is evidence that an individual who exercises the option referred t o in INCOME TAX [CAP. 123. 137 this sub-article has overstated the amount of rental income dec lared in the relevant form for the purpose of obtaining a tax advanta ge, the preceding proviso shall not a pply and the total amount of r ental income declared in the said form shall be subject to tax at the rate of 15%. For the purpose of this sub-article "relevant period" means the period of eight years preceding basis year 2013. Cap. 372. (7) The person exercising the option referred to in sub-article (2) shall pay to the Commissioner the tax referred to in the sa id sub-articles in such manner as ma y be prescribed in accordance with the provisions of article 42 of the Income Tax Management Act. (8) For the purposes of this article: (a) "tenement" means - Cap. 16. (i) a tenement, not being a commercial tenement as defined in article 1525 of the Civil Code , which consists of either a dwelling house or part thereof which is to be o ccupied or is occupied as a home or residence by the occupier or a garage; or (ii) a "commercial tenement" or a "club", both terms having the meaning assigned to them respectively in article 1525 of the Civil Code, w h e n t h e p r o p e r t y i s n o t r e n t e d t o o r f r o m a related body of persons, and for the purpose of this sub-paragraph - ( A ) a b o d y o r p e r s o n s i s r e l a t e d t o a n individual if it is owned or controlled, directly or indirectly, as to more than twenty-five percent by that individual; and (B) two bodies of persons are related if they are owned or controlled, directly or indirectly, as to more than twenty-five percent by the same persons; (b) "relevant year" means the calendar year during which the gross rental i ncome is received: (c) "rents" shall include ground rents, whether from an urban or rural tenement. Housing Authority Schemes. Added by: XVI. 2017.19.