17 July 2009 To: IFSP Members (cc Malta Institute of Taxation, Malta ...

provisions in respect of tax on profits distributed by an ITC to its
shareholder are the 2/3rds refund as set out in Art. 48(4)(a) of the ITMA
and the refund (7.5%) resulting on assessment of the shareholder of the
ITC at 27.5% in terms of 56(8) of the ITA. In no circumstances is the
shareholder of an ITC entitled to claim a 6/7ths refund (in terms of
Art. 48(4A) ITMA). Claims for a 6/7ths refund by shareholders of an ITC
will continue to be rejected by the ITU. Likewise, practitioners are being
reminded to make sure that submitted claims for refunds (whether in
relation to an ITC or otherwise) are in line with current legislation.
(iv) Income tax returns of shareholders of ITCs (for the purposes of the 7.5% tax
refund on assessment) and ITC shareholder tax refund claims (in terms of
Art. 48(4)(a) of the ITMA) should be sent to the Inland Revenue ITU
Mriehel offices and not the Inland Revenue Floriana offices.
Currently, the ITU are unable to accept tax payments through internet banking and all
member practitioners are requested to resort only to international SWIFT bank
transfers for payment of tax.
Use of international bank drafts for payment of tax is also discouraged by the ITU.
A list of the current Inland Revenue bank accounts to be utilised for the purposes of
tax payments is attached.
Finally, it needs to be pointed out that in practice, the ITU do not wait for the 14 days
from the end of the month in which the refund claim is submitted before processing
the relevant claim and effecting the relevant payment of tax refund. Therefore,
practitioners are being encouraged not to send refund claims towards the end of a
month as currently, the ITU are facing bottleneck situations every end of the month.
This is placing a huge strain on this Unit. In view of these persistent bottleneck
situations, ITU are considering a change of the relevant legislation as a way out.
Certificates of Tax Residency
The ITU are regularly receiving requests for Certificates of Tax Residency without the
use of the IRD Form RCTR01. The content of this Form was agreed with the IFSP in
order that the ITU may be able to process such requests in the shortest possible
time.
Use of the IRD Form RCTR01 should be considered as mandatory for all
requests for Certificates of Tax Residency. A specimen copy of the IRD Form
RCTR01 is attached to this Memorandum.
Deduction of expenses for income tax purposes
ITU have requested that members be reminded that, in terms of Art. 14 of the ITA,
outgoings and expenses incurred by a taxable person are deductible for income tax
purposes only to the extent that the said outgoings and expenses were wholly and
exclusively incurred in the production of the income.
Address: P.O Box 37, Valletta, VLT 1000
Tel: 2569 6352 Fax: 2144 9212
E-mail: info@ifsp.org.mt Website: www.ifsp.org