Income Tax Management Act (Cap. 372), article 23

23. (1) Where any person pays income chargeable under article 4(1)( a), ( b) or ( d) of the Income Tax Act , or any other income as may be prescribed, he shall, at the time of payment deduct tax therefrom at such amount and in such manner as may b e prescribed under this sub-article or under any other provision of the Income Tax Acts. (2) Any tax deducted as required under sub-article (1) shall be remitted to the Commissioner in such manner and within such period as may be prescribed. (3) Deductions of tax made under sub-article (1) shall be set of f for the purposes of collection against the tax chargeable on th e corresponding income for the year of assessment following that during which the relative deductions are made, or for any other year of assessment as the Commissioner may elect and any tax which cannot be set off as aforesaid shall be refunded in accordance with the provisions of article 48: Provided that such tax shall not be set off or refunded as aforesaid unless the person receiv ing the income has declared t hat income in a return of income furnished in accordance with artic le 10 or made an election under article 12 for the year of assessm ent following that during which the deductions were made or has complied with such conditions that may be prescribed to the extent that they are relevant to the income in question: Provided further that the provisions of this sub-article shall not apply where any tax deducted as aforesaid has not been remitted to the Commissioner and the Commissioner is satisfied that such non-remittance was due to any fault or connivance on the part of the person r eceiving the income. (4) If any person fails to dedu ct tax in accordance with the provisions of any rules referred to in sub-article (1) or after deducting such tax, fails to pay it to the Commissioner within the prescribed period or who otherwise fails to comply with the provisions of such rules, he shal l be liable to the prescribed additional tax which the Commissioner is empowered to impose under sub-article (5) hereof and where applicable he shall, in addition, be chargeable with the tax which should have been deducted or paid together with interest, which shall be charged as provided in article 44(2A). (5) Where the Commissioner has reason to believe that a person has made a default against the provisions of any rules 24 CAP. 372.] INCOME TAX MANAGEMENT referred to under this article he may at any time serve upon su ch person a default notice as prescribed showing the tax which sho uld have been deducted or remitted together with interest and/or an y additional tax imposed upon him as aforesaid, sohowever that su ch additional tax shall n ot exceed the amount of one thousand euro (€1000) for every such default; and any interest and additional tax so imposed shall be borne by the person to whom sub-article (4) applies and shall not be recoverable by such person wholly or i n part from the person receiving the income. (6) If any person feels aggrieve d by a default notice served upon him under sub-article (5) hereof, he may apply to the Commissioner in writing contesting such notice in the manner and within such period as may be prescribed. (7) Where a person has not contested the default notice referred to in sub-article (5) hereof or where his contestation has been refused, the Commissioner may, w here the payment of the amount due has not already been made, s erve a demand notice on such person showing the tax which should have been deducted or remitted together with interest and/or any additional tax impos ed upon him; and, unless the contra ry is proved, the said notice s hall be sufficient evidence that the amount shown therein is the amo unt due to be paid to the Commissioner b y the said person: Provided that a person on whom a demand notice has been served in consequence of a ref usal by the Commissioner in accordance with this sub-article may appeal such decision in a court of law within fifteen days from the date of service of su ch notice. (8) The Commissioner may in his discretion remit wholly or in part any additional tax imposed under the provisions of this ar ticle. Cap. 123. (9) Any additional tax imposed under the provisions of this article shall not be deemed to be part of any tax paid or payab le for the purposes of any other articl e of this Act or of any article of the Income Tax Act or any rules made thereunder. (10) The powers conferred upon the Commissioner by this article shall be in addition to any right conferred upon him to commence proceedings in respect of an offence under the provisions of sub-article (13). Cap. 318. (11) Notwithstanding the provisions of any other law, the demand notice by the Commissioner referred to in sub-article (7 ), showing the amount due to be paid under this article, shall constitute a privileged claim over the assets of the employer (including the assets of a principal officer in the case of a body of persons) ranking immediately after the wages of employees and claims of the Director of Social Security for any amounts due b y way of contribution under article 116 of the Social Security Act , and shall be paid after such wag es and claims in preference to all other claims whether p rivileged or hypothecary. INCOME TAX MANAGEMENT [CAP. 372. 25 Cap. 123. (12) Any person to whom this article applies shall at all times maintain proper and sufficient r ecords as may be prescribed and shall, whenever called upon to do so by the Commissioner or by any public officer authorised by him in writing, produce for inspection at such person’s premises or as otherwise directed, all wage sheets, lists and documents and other records whatsoever relating to any payment made by him of income chargeable under paragraph (b) or ( d) of sub-article (1) of article 4 of the Income Tax Act, to any other income as may be prescribed, to any tax deductio n made therefrom or to the accounting of any such payment or tax deduction: Provided that all such records shall be retained for a period of not less than nine years afte r the completion of the transac tions, acts or operations to which they relate and shall be made readi ly available for examination at any time during such period. The aforesaid period of prescription shall in no case commence before such person has fully complied with the provisions of this article and of any rules made thereunder. (13) Any person who contravenes or fails to comply with the provisions of this article or of any rules referred to in sub-a rticle (1) shall be liable, on conviction, to a fine ( multa ) of not less than one hundred and sixteen euro (116) and not exceeding one thousand and one hundred and sixty euro (1,160) or to imprisonment for a term not exceeding six months or to both suc h fine and imprisonment, and to a further fine ( multa ) of not less than four euro (4) but not exceeding twenty-three euro (23) for ever y day during which the offence continues after conviction: Provided that the Commissioner may compound any offence under this sub-article and may before judgment stay or compound any proceedings thereunder: Provided further that the offence under this sub-article shall continue to subsist until the offender shall have conformed and complied with the provisions of this article or of any rules re ferred to therein. Return to be furnished of income received on account of, or paid to, other persons. Amended by: IX. 1999.5; XIII. 2004.87; I. 2008.5.