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CSB Group provides support relating to personal income tax. We will ensure the timely submission of income tax returns and provide the right advice to minimise the tax incidence whilst ensuring full compliance with the respective tax statutes.
Personal Tax Returns
Certain individuals are non-tax filers meaning that they do not need to file an income tax return on an annual basis. However, there are other individuals that would need to file a self assesment tax return yearly. The personal tax return would need to be completed and submitted by 30th June of the following year; ie. the tax return in relation to the basis year 2020 would need to be submitted by 30th June 2021.
The Commissioner for Revenue notifies that those individuals who are required to file a Tax Return, which was to be submitted by 30th June 2021, will be allowed to electronically submit their returns by 30th July 2021.
At CSB Group, the taxation team would be able to guide you in the completion and submission of the personal tax return to be sure it is accurately completed.
It is also to be noted in accordance to Article 11 of the Income Tax Management Act (Chap: 372), that if any person needs to pay tax which has not been deducted at source, and that person has not received the tax return, it shall accordingly be the duty of that person to ask the CFR to furnish it with the tax return.
Non-resident rates of taxation
One would need to apply the tax rates applicable to him/her when computing the tax for the year. In the case of any individual who is not resident in Malta during the year immediately preceding the year of assessment, the non-resident rates shall apply;
Provided that in the case of an individual who is a national of a European Union or European Economic Area Member State; where the CFR is satisfied that at least 90% of the said individual’s worldwide income is derived from Malta, the resident progressive tax rates shall apply;
Even where his or her spouse is not resident in Malta if other conditions are met and CFR is satisfied that at least 90% of the couple’s worldwide income is derived from Malta.
It is also to be pointed that Individuals who are ordinarily resident but not domiciled in Malta will be subject to a minimum tax of €5,000 annually if:
Is not already taxable under a special tax regime that establish a minimum amount of tax payable in Malta;
Derive income arising outside Malta amounting to the equivalent of €35,000 or more.
Page 2 of the Personal Tax Return form makes reference to "tax professional" meaning an individual 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 partnership of such individuals the majority of whom are so qualified: provided that the Commissioner shall be entitled to request such proof as he may deem appropriate to the effect that an individual qualifies as a tax professional as aforesaid.
The professional advice refers to matters mainly relating to omissions, where the original written advice must be submitted with the Return.
The advice furnished by a tax professional, shall not of itself constitute a binding interpretation of the relative statutory provisions and their proper application. CSB Group can act as tax professionals for you in the completion of these forms.
Sections of the Personal Tax Return
The Personal Tax return includes various sections for the different types of income.
1. Employment or office
Any income declared in this section must be supported by a Payee Statement of Earnings (FS3);
Income which is covered by final withholding tax (e.g. part time, police extra duties, share options, part time ‘sport tax regime’) are not to be declared, unless any tax on part time income is to be claimed back.
Directors’ fees should also be supported by FS3 forms and included under ‘self’ (responsible taxpayer).
Directors’ fees paid to non-resident directors are subject to tax where the company paying such fees is resident.
2. Trade, Business, Profession or Vacation
In this section, in cases of business income, a profit and loss account statement must be attached even if a loss was incurred.
Page 3 of the Form delves into Investment, Capital Gains and Other income. This would include dividend income, interest income upon which 15% was not withheld, rental income with the exception of the rental income declared through the TA24 and upon which 15%was paid and capital gains.
There are various deductions including school fees, fees for sports activities, transport, trading losses brought forward in the case of self-employed that may be deducted.
The actual Tax computation would be the next section whereby the chargeable income is taxed at the appropriate rates of tax, being single, married or parent. In order to apply the parental rates, certain conditions would need to be satisfied. In addition, upon satisfying certain conditions single parents can also apply the married rates of taxation.
After computing the actual tax charge, there is a section for Tax Credits which if applicable can reduce the whole tax charge. This might apply in the case of ‘Women returning to work’ and other scenarios.
Hereby Tax credits may amount to a maximum of €2,000 spread over 2 years, €2,000 per year depending on number of children under 16 years of age, or a one time credit of €5,000. For these and other different forms of tax credits, return attachments (RA) would generally need to be completed and enclosed with the tax return once submitted.
Majority of RA forms are provided by CFR together with the Tax Return. If otherwise, forms are found downloadable or by request to CFR.
4. Tax Payments
In the last section, an example of Tax Payments is FSS deductions which would need to be included so as to deduct from the tax charge as these would already have been paid.
Timely submissions by taxpayers which self-assessment results in a refund, is payable by CFR by 31/12/2020.
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