All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Malta: Budget 2014 implementation: Tax updates

vella.jpg

cassar.jpg

Donald Vella


Kirsten Cassar

Recently, a number of amendments were made to the Maltese tax framework with the effect of bringing into force specific measures which were announced in Malta's budget for 2014.

Intellectual property

Up to the end of 2013, only transfers of specific categories of intellectual property, that is, copyright, patents, trademarks and trade names were subject to income tax on capital gains in Malta. With effect from 2014, capital gains arising from the transfer of all intellectual property will be brought to charge under Malta's Income Tax Act (ITA). In addition, a new provision has been introduced to the ITA which brings to charge any sums receivable from "any sales" of such intellectual property rights and "all other income receivable" in respect thereof. This extends the scope of taxation in Malta of income or gains derived from intellectual property.

Taxation of rental income

With effect from January 1 2014, landlords leasing out residential tenements to individuals can opt to have their gross rental income taxed at the final withholding rate of tax of 15%. Such tax is final and thus no offset or refund is due to the landlord. Where the option is exercised during a relevant year as defined in the ITA, it will, for that particular year, apply equally to all the other rental income derived from any other residential tenements owned by the landlord.

Should a landlord not opt for this 15% final withholding rate of tax on rental income, marginal rates of tax which could range from 15% to 35% would be applicable to such income. The landlord's option is revocable.

Tax rates applicable to EU/EEA individuals

Also with effect from January 1 2014, EU or EEA nationals who derive at least 90% of their worldwide income from Malta are subject to tax in Malta at the rates applicable to Maltese resident persons, even though such persons may not be resident in Malta.

In addition, the provisions of the ITA that are applicable to exemptions, deductions, credits and refunds will, with effect from the same date referred to above, also be applicable to EU or EEA nationals which are subject to tax in Malta at the resident rates, even though such nationals may not be resident in Malta.

Other: Tax credits for micro-enterprises

A programme dubbed MicroInvest Tax Credits has recently been launched by Malta Enterprise – Malta's national development agency responsible for promoting and facilitating international investment. The scope of this scheme is to encourage undertakings to invest in their business, to innovate, expand and develop their operations.

Undertakings employing up to 30 full-time employees and which have a turnover not exceeding €10 million ($13.5 million), are eligible to apply. The extent of the relevant benefit, which comes in the form of tax credits, is calculated on the eligible costs incurred between January 2014 and December 2020, and will not exceed €30,000 to €50,000 over any period of three consecutive years.

Donald Vella (donald.vella@camilleripreziosi.com) and Kirsten Cassar (kirsten.cassar@camilleripreziosi.com)

Camilleri Preziosi

Tel: +356 21238989

Website: www.camilleripreziosi.com

more across site & bottom lb ros

More from across our site

The Biden administration is about to give $80 billion to the Internal Revenue Service to enhance the tax authority’s enforcement processes and IT systems.
Audi, Porsche, and Kia say their US clients will face higher prices under the Inflation Reduction Act after the legislation axes an important tax credit for electric vehicle production.
This week Brazil’s former President Luiz Inacio Lula da Silva came out in support of uniting Brazil’s consumption taxes into one VAT regime, while the US Senate approved a corporate minimum tax rate.
The Dutch TP decree marks a turn in the Netherlands as the country aligns its tax policies with OECD standards over claims it is a tax haven.
Gorka Echevarria talks to reporter Siqalane Taho about how inflation, e-invoicing and technology are affecting the laser printing firm in a post-COVID world.
Tax directors have called on companies to better secure their data as they generate ever-increasing amounts of information due to greater government scrutiny.
Incoming amendments to the treaty could increase costs on non-resident Indian service providers.
Experts say the proposed minimum tax does not align with the OECD’s pillar two regime and risks other countries pulling out.
The Malawian government has targeted US gemstone miner Columbia Gem House, while Amgen has successfully consolidated two separate tax disputes with the Internal Revenue Service.
ITR's latest quarterly PDF is now live, leading on the rise of tax technology.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree