Income Tax Act (Cap. 123), article 40

40. (1) Where a payor fails to deduct and pay tax in accordance with the investment in come provisions, the provision s of article 73(4) of this Act and of article 40(1) of the Income Tax Management Act shall apply mutatis mutandis. (2) The provisions of article 39 of this Act and the provisions of article 17 of the Income Tax Management Act shall not be applicable, and a payor shall not be bound by a duty of profess ional secrecy on a request for information by the Commissioner where investment income referred to in article 41( a)(iv), 41( a)(vii) and 41( a)(viii)(1) are derived from a person, other than a physical person that is not resident in Malta is paid to a recipient pro vided that: (a) the asset from which the investment income is derived is not a qualifying asset as defined in the provisions of article 9B; and (b) the recipient has not decl ared, in accordance with the provisions of the relevant laws as defined in the provisions of article 9B, income and transfers referred to in article 9B(2)( a) to ( c) in relation to the asset from which the investment income is derived. (3) Any person (hereinafter in th is sub-article referred to as t he "first person") who is in a position to receive or be deemed to have received the income referred to in article 41( a)(viii)(2), (3) and (4): (a) shall inform in writing the person who would be the 142 CAP. 123.] INCOME TAX payor of such income if the first person were to receive or be deemed to have received such income, that in such an eventuality the first person would be the recipient of that income; and (b) when the first person has received or has been deemed to have received such income, he shall, unless the payor has paid the tax in accordance with the investment income provisions, pay such tax himself within seven days from the date that the payor should have paid the tax; and (c) without prejudice to any other provisions of the Income Tax Acts, any such person who does not make the payment referred to in paragraph ( b) when he ought to have made it shall, in addition to the payment of the tax due, be liable to pay additional tax of seven per cent of the amount of such tax for every month or part thereof that the tax remains unpaid commencing from the month in which the tax should have been paid and any payment made by the said person in respect of the tax payable by him in terms of this sub-article shall first be applied against any additional tax due thereon. (4) The provisions of sub-article (3) shall not be applicable when the person referred to ther ein proves to the satisfaction of the Commissioner that he did not know and could not reasonably have known that he was a recipient and for this purpose it shall be presumed that such person was fully cognisant of the provisions and implications of the Income Tax Acts. (5) Where the payor has not deducted or paid the tax from the income referred to in article 41( a)(viii)(2), (3) and (4), the provisions of articles 38 and 39 shall not be applicable. Interpretation of the investment income provisions. Added by: XVII. 1994.16. Amended by: XVII. 1998.70; XI. 2000.5; IX. 2001.26; II. 2003.19; II. 2004.12; II. 2005.10; II. 2007.13; I. 2010.23; IV . 2011.17; XII. 2014.24; VII.2022.26. Cap. 371.