Income Tax Act (Cap. 123), article 96

96. (1) The Minister responsible for finance may from time to time make rules generally for carrying out the provisions of th is Act and for such matters as are authorised by this Act to be prescribed. (2) Any guidelines, explanations or instructions relating to the Income Tax Acts or of the rule s referred to in sub-article (1) contained in a publication or circular published by or under th e authority of the Commissioner and distributed or made available to taxpayers in general, shall be read and construed as one with s uch rules and shall have the same effect as the rules to the extent that such guidelines, explanations or instructions are not in confli ct with the Income Tax Acts on the said rules or with guidelines, explanations or instructions published at a later date and to the extent that - (a) they give a definition of any term or an interpretation of any provision contained in the Income Tax Acts or the rules; (b) they determine the manner in which any provision of the Income Tax Acts or the rules is to be applied; (c) they determine any matter which in accordance with the Income Tax Acts or the rules may be determined by or is subject to the approval or the discretion of the Commissioner. (3) The Minister responsible for finance may make rules prescribing tax credits and may also by such rules determine th e class of persons to whom such tax credits shall apply and the method of calculating or estima ting such tax credits and the amounts thereof. (4) The Minister responsible for finance may by rules amend, repeal or substitute the Schedule to this Act. (5) The Minister responsible f or finance may make, amend, substitute or repeal rules or regulations in relation to the ta x treatment of activities carried out within an exclusive economic zone are a, including the application of all or part of the provisions of t he Income Tax Acts and of any subsidiary legislation made thereunder in r elation to the said activities and for the purpose of regulating, presc ribing or otherwise providing for matters r elating to tax in respect of a n exclusive economic zone area and generally for the better appli cation of the Income Tax Acts to activ ities carried out in or therefro m. 214 CAP. 123.] INCOME TAX Added by: IX. 1999.14. Amended by: XI. 2000.11; II. 2002.58; II. 2003.25; L.N. 409 of 2007. Substituted by: L.N. 98 of 2009. Amended by: L.N. 336 of 2010; XII. 2014.27; XIII. 2015.58; IX.2025.16. SCHEDULE * Article 56(12)( c) Additional tax chargea ble under article 56(12)( c) Definitions. 1. In this Schedule: "additional tax" means the additional tax chargeable in accordance with the provisions of article 56(12)( c) in respect of a default or omission; "endangered tax" † means, subject to the provisions of item 12, the difference between the tax declared to be chargeable by the taxpayer after taking into account any exemption, relief, allow ance or tax credits to which he may be entitled and the tax actually chargeable after considering the same, but shall not include an y additional tax: Provided that where the Commissi oner is satisfied that the tax actually chargeable or any part thereof has been paid under the Final Settlement System (FSS) Rules, the amount so paid shall not be regarded as endangered tax notwithstanding that it may not have been declared; "default" means a default in furnishing a return of income required to be submitted for the purposes of the Income Tax Act s; "omission" means the omission from any return of income submitted for the purpose of the Income Tax Acts of any amount which should have been included therein and includes any act or omission which is deemed to constitute an omission in terms art icle 56(12); Cap. 281. "tax professional" means an ind ividual being the holder of a warrant issued under the Accountancy Profession Act , or a member of the Malta Institute of Taxation, or a member of the legal profession in Malta who specialises in taxation, or a partnersh ip of such individuals the majority of whom are so qualified: provide d that the Commissioner shall be entitled to request such proof a s he may deem appropriate to the effect that an individual qualifies as a tax professional as aforesaid. Additional tax for a default by an indi- vidual. 2. Additional tax chargeab le under article 56(12)( c) for a default by an individual in furnishing a return in respect of t he year of assessment 2009 or any subsequent year of assessment shall b e * The provisions of this Schedule, as substituted by Legal Notice 98 of 2009 , shall apply with respect to additional tax chargeable in terms of art icle 56(12)( c) for the year of assessment 2009 and subs equent years of assessment: pro vided that the provisions of this Schedule, as i n force immediately before the coming into force of the substituting rules, shall con tinue to apply with respect to additional tax chargeable in accordance with the said article 56(12)( c) for years of assessment preceding the year of assessment 2009. †Applicable from 1st January, 2025. INCOME TAX [CAP. 123. 215 at the amounts shown in Table A hereunder: TABLE A Additional tax for a default by a person other than an individual. 3. Additional tax chargeable under article 56(12)( c) for a default by a person, other than an individual, in furnishing a return in respect of the year of asse ssment 2009 or any subsequent yea r of assessment, shall be at the amounts as shown in Table B hereund er: TABLE B Remission of additional tax for default. 4. Where a person proves that a default in furnishing a return filed or due to be filed by him was due to a reasonable excuse, the Commissioner may remit part or a ll of the additional tax otherw ise chargeable in accordance with ite m 2 or 3 in respect of that de fault: Provided that: (a) an insufficiency of fund s to pay any tax due, or (b) when reliance is placed on any other person to perform any task, the fact of that reliance or any dilatoriness or inaccuracies on the part o f the person relied upon, shall not constitute a reasonable excuse for the purpose of thi s item. Additional tax for omission. 5. (1) Subject to the provisions of the other items of this Schedule, additional tax charge able under article 56(12)( c) for an Number of months from the date on which a return is required to be submitted in accordance with the relevant provisions of the Income Tax Management Act Additional tax Within 6 months €10 Later than 6 but within 12 months €50 Later than 12 but within 18 months €100 Later than 18 but within 24 months €150 Later than 24 but within 36 months €200 Later than 36 but within 48 months €300 Later than 48 but within 60 months €400 Later than 60 months €500 Number of months from the date on which a return is required to be submitted in accordance with the relevant provisions of the Income Tax Management Act Additional tax Within 6 months €50 Later than 6 but within 12 months €200 Later than 12 but within 18 months €400 Later than 18 but within 24 months €600 Later than 24 but within 36 months €800 Later than 36 but within 48 months €1,000 Later than 48 but within 60 months €1,200 Later than 60 months €1,500 216 CAP. 123.] INCOME TAX omission from a return shall be one point five per cent (1.5%) per month of the endangered tax. Cap. 372. (2) Subject to the provisions of item 7, the rate of additional tax per month as provided in paragraph (1) shall be calculated for every month or part thereof, such period commencing with the month during which the tax on the chargeable income for that ye ar was due and payable and ending with the month during which the omission is rectified by a further return made under article 13 of the Income Tax Management Act or an assessment is made. Reduced rate of additional tax on omission. Cap. 372. 6. (1) When 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 before that person is notified in writing by the Commissioner, in terms of sub- article (7) of the said article , that an enquiry will be conduc ted into that person’s tax declarations and liabilities - (a) if that further return is d elivered to the Commissioner not later than twelve mont hs after the relative tax return date, the additional tax otherwise chargeable under item 5 for that omission shall be fully remitted; (b) in any other case, the rate of additional tax otherwise chargeable under item 5 for that omission shall be zero point one per cent (0.1%) per month of the endangered tax. Cap. 372. (2) Where an omission from a retu rn is rectified by a person by means of the delivery of a fur ther return made in accordance wi th article 13 of the Income Tax Management Act after that person has been notified in writing by the Commissioner, in terms of sub- article (7) of the said article , that an enquiry will be conduc ted into that person’s tax declarations a nd liabilities, but before that person is notified with an assessment in which additional tax is charg ed for that omission, the rate of additional tax otherwise chargeable under item 5 for that omission shall be zero point seven five 0.75% p er month of the endangered tax. Maximum additional tax on omission. 7. The maximum additional tax for an omission payable under item 5 or 6 shall in no case be more than sixty times the applicable rate in terms of the respective item. Remission of additional tax for an omission. 8. (1) Where a return of income delivered by a person contains an omission and - (a) that person has sought and relied upon the written advice of a tax professional, insofar as the matter to which the omission refers is concerned, and submits the original written advice together with the return by not later than the relat ive tax return date; or (b) that person proves that the omission was not due to any fraud, art, contrivance o r gross or wilful neglect, the Commissioner may remit part or all of the additional tax otherwise due in accordance with this Schedule in respect of th at omission. INCOME TAX [CAP. 123. 217 (2) An advice, referred to in paragraph (1)( a), furnished by a tax professional, shall not of itself constitute a binding interpretation of the relative statutory provisions and their p roper application. (3) The Commissioner shall not be required to remit the additional tax in accordance with item (1)( a) if he determines the advice in question to be spurious or frivolous: provided that t he Commissioner’s decision under this paragraph shall be subject t o review by the Administrative Review Tribunal in any appeal file d in connection with the relative assessment. (4) Without prejudice to paragraph (1)( a) , t h e f a c t t h a t a n omission was due to the complexity of a particular transaction or to the complexity of any particular provision of the law shall not , of itself, be considered as a valid ground for the remission of additional tax under paragraph (1)( b). Additional tax not subject to interest. Cap. 372. 9. The additional tax chargeable under article 56(12)( c) shall be in addition and without prejudice to interest chargeable und er article 44(2A) of the Income Tax Management Act , but no such interest shall be charged on the said additional tax. Omission by persons not eligible for election under article 12 of the Income Tax Management Act. Cap. 372. 10. When a person files a decl aration prescr i b e d f o r t h e making of an election un der article 12 of the Income Tax Management Act , and he is not a person to whom that article applies and subsequently submits a full and correct return, he shall be deemed for the purposes of article 56(12)( c) and of this Schedule to have omitted from his return all his income except for that income referred to in article 12(2)( b) of that Act and to have rectified that omission when he s ubmits the full and correct re turn. Default in connection with an election under article 12 of the Income Tax Management Act. Cap. 372. 11. When a person to whom article 12 of the Income Tax Management Act applies files a declaration prescribed for the making of an election under that article after the date prescri bed therefor, he shall for the purposes of article 56(12)( c) and of this Schedule be deemed to have made a default in furnishing a retur n and that default shall continue until a return is furnished. Additional tax for an omission in addition to additional tax for a default in the case of return filed after notice of enquiry. Cap. 372. 12. (1) When the Commissioner, having determined the amount of tax payable by a person for a year or years of assess ment on the basis of an estimate made under article 31(3) of the Income Tax Management Act , gives notice in writing to that person, in terms of article 13(7) of that A ct, that an enquiry will be con ducted into his tax declarations and liabilities, and that person subsequently furnishes a return of income in respect of the sai d year or years, that person shall be deemed to be subject to additional tax for an omission in addition to any additional tax to which he may be liable for a default. (2) For the purposes of calculating the endangered tax for an omission to which the person referred to in paragraph (1) shall be subject, the said endangered tax shall be considered to be equa l to the tax calculated on the total income, deducting therefrom any credits, as declared in the said return. Cap. 372. (3) Where an assessment or an ad ditional assessment for a year or years of assessment is made under article 31(5) of the Income 218 CAP. 123.] INCOME TAX Tax Management Act on a person referred to in paragraph (1), for the purposes of calculating the endangered tax, the tax calcula ted on the total income, deducting th erefrom any credits, as declar ed in the said return, shall be considered to be zero: Provided that the additional tax for omission as resulting from paragraph (2) shall be deducted from the amount of the additional tax as resulting from this paragraph. Certain powers of the Commissioner. 13. (1) The Commissioner may remit such part or all of the additional tax otherwise chargeable in accordance with this Schedule in respect of a default or an omission as he may deem fit. (2) The Commissioner may impose any condition that he may consider appropriate for any remission under paragraph (1), including the requirement that t he person concerned shall not m ake another default or omission within such period as the Commissioner may establish or that the said person shall make a payment of tax in such amount and within such time as the Commissioner may determine. (3) Should any condition imposed by the Commissioner in accordance with the provisions of paragraph (2) be infringed by the person concerned, any reduction of additional tax granted by th e Commissioner in addition to the reductions contemplated by the other provisions of this Schedule shall be forfeited. (4) If forfeiture is due under the provisions of paragraph (3), any additional reduction made under the provisions of this item , but not under the provisions of the other items, shall be deemed to have been a suspension of liability to the said additional tax, and not the cancellation of the rel evant additional tax. (5) The Commissioner shall communicate in writing to the person concerned any condition imposed under paragraph (2), the consequences of an infringement of any such condition in accordance with paragraph (3) and, when such is the case, the f act that forfeiture has been incurred. (6) The use of the Commissioner’s discretion under this item shall not be questioned in any appeal.