The administration of the principal provisions of the Income Tax Act and the Death and Donation Duty Act in Malta

Abstract

The Income Tax Act imposes direct taxation upon incomes and regulates the collection thereof. Until 24th November, 1992, the Death and Donation Duty Act was a separate legislation that derived direct taxation for the Maltese Exchequer through the imposition of a fiscal duty on property passing on death or transferred gratuitously by way of a donation or 'inter vivos' disposition, and for the collection thereof. In Malta, the chargeability to income tax: extends still on a wide spectrum of any income earned locally through employment, trade, business, profession or vocation activities. Both the said Acts are included in the Laws of Malta and are referred to as the Income Tax Act, (Cap. 123) and the Death and Donation Duty Act, (Cap 239). They have both territorial restrictions; adhere to bilateral Double Taxation Agreements; and specify personal deductions and 'ad hoe' exemptions. They are both computed, according to progressive rates of direct taxation or fiscal duty. The taxpayer may submit an objection in writing on any assessment issued by the Commissioner of Inland Revenue. If the taxpayer fails to arrive for a compromise on such an objection, he has the right to contest it before the Board of Special Commissioners which is an independent tribunal. Both the taxpayer and the Commissioner of Inland Revenue may lodge an appeal against the decision of the said Board, on a question of law only, to the Court of Appeal. Both Chapter 123 and 239 in the Laws of Malta, provide for administrative discretion which may be applied in general, or it may be absolute or reviewable, depending on the stipulated authority afforded to him by the said leglslation. The Minister of Finance is vested with the power to make rules and issue exemption orders that evolve into subsidiary legislation to the said Chapters in the Laws of Malta. The Commissioner of Inland Revenue and his staff are bound on oath, not to divulge any of the collected information to a third party. This veil of secrecy and confidentiality may be only removed on the six (6) instances specified in Part II Section 4 of the Income Tax Act. [...]