The Commissioner for Revenue notifies that the year of assessment 2018 electronic income tax return for companies is now available on the IRD online services.
For this year of assessment there were the following salient changes to the tax return:
Index - Updated to cater for new attachments or rephrased attachment descriptions to align with current legislative provisions.
Page 2 - qualified the statement number 24 (row 30) relating to the receipt of passive interest or royalties to restrict the ‘Y’ input to the Foreign Income Account or the Maltese Taxed Account. New statements 25 and 26 were introduced, so that replies will trigger the filling requirement or otherwise, the Audit Report Waiver or Deduction attachment (new TRA 99) and the Notional Interest Deduction or Receipt (new TRA 100).
Page 3 – field 32a utilized to accept specific input and claim for the Amortisation of Intellectual Property (Art 14(1)(m) of the ITA) that would have been added back in field 3a.
Page 4 – any Net Notional Interest Received as calculated in new TRA 100, will be transposed and added to other interests (derived from TRA 09) in fields 51a, 51b and / or 51c (row 23), as the case may be. New row 53 introduced to claim the Notional Interest Deduction (NID) derived in TRA 100. The result in TRA 100 is transposed to fields 68e and / or 68f. The values in these two fields are validated and an error message is displayed if there is not enough income to absorb NID.
Page 6 – Includes a new row 26 defining three new fields 101f, 101g and 101h, to cater for the 10% additional reallocation to the Final Tax Account required by the Notional Interest Deduction Rules. Values inputted in TRA 100 (cells I69 and J69) are transposed to fields 101g and 101h on Page 6. These two latter fields are also validated to ensure that there is enough income to be transferred to the Final Tax Account.
This page has also been amended (new fields 96a and 96b) to take account of taxed Income relieved by tax credits that stands to be allocated to FTA (from TRA 96).
TRA 17 – Amended to take account of Transfer of shares that have been admitted for trading on an alternative trading platform (New Rule 4A of the Capital Gains Rules). The non-taxable portion is transposed to TRA 18.
TRA 18 – Two new descriptions introduced (rows 31 and 32) to cater for:
1. Exemption from Capital Gains from sale of shares listed on the Malta Stock Exchange (Income Tax Act Article 5); and
2. Transfer of shares that have been admitted for trading on an alternative trading platform (Rule 4A of the CG Rules) [transposed from TRA 17].
TRA 35 - This attachment has been updated and extended to cater for new arrangements including:
1. Voluntary Occupational Pension Scheme Rules, 2017 (linked to NEW TRA 96);
2. Tax Credit for Research and Development and Innovation Regulations, 2017 (linked to NEW TRA 101);
3. Research and Development Activities Regulations, 2017 - Rule 4 (linked to NEW TRA 102);
4. Research and Development Activities Regulations, 2017 - Rule 6 (linked to NEW TRA 103);
5. Research and Development Activities Regulations, 2017 - R&D 2014 – 2020 (linked to NEW TRA 104); and
6. Catering Capacity Building Regulations, 2017 (linked to NEW TRA 105).
Note that the tax credit emanating from the Voluntary Occupational Pension Scheme Rules is allocated to the IPA or MTA in TRA 35, for tax computation and calculation purposes only. Any income, the tax on which is relieved by tax credits under these Rules is ultimately allocated to the FTA (TRA 61).
TRA 53 - To be read in conjunction with the TAX ON PROPERTY TRANSFERS RULES (LN 112 of 2006 as amended by LNs 409 of 2007, 336 of 2010, 426 of 2012 and 68 of 2017). Two blank rows (31 and 32) without dropdown lists are available to insert any redemption of ground rents subject to a final withholding tax.
TRA 60 – amended to cater for new legislative arrangements as follows:
1. Deduction for transportation Cost of Employees Rules, 2018 (linked to TRA 95)
2. Voluntary Occupational Pension Scheme Rules, 2017 (linked to TRA 96)
3. Rental of property to another person for at least seven years (Housing Authority Scheme (linked to TRA 97)
4. Deduction (Embellishment project) Rules (linked to TRA 98)
5. Audit report waiver and Deduction Rules (linked to TRA 99)
TRA 61 - amended as a consequence of the new legislative arrangements as follows:
1. Voluntary Occupational Pension Scheme Rules, 2017 (linked to TRA 96)
2. Rental of property to another person for at least seven years (Housing Authority Scheme) (linked to TRA 97)
3. Notional Interest Deduction Rules, 2018 (linked to TRA 100)
Note also that there have been minor amendments to the Tax Account Rules.
TRA 62 – slight formulae changes to take account of any relocation required in relation to the income the tax on which is relieved by tax credits emanating from the Voluntary Occupational Pension Scheme that stands to be allocated to the Final Tax Account.
TRA 63 – slight formulae changes to take account of any relocation required in relation to the income the tax on which is relieved by tax credits emanating from the Voluntary Occupational Pension Scheme that stands to be allocated to the Final Tax Account.
TRA 66 – Removed the upper part relating to the deduction no longer applicable as from the Y/A 2018. Only the tax credit applicable to the Pharmacy of your Choice Scheme is now available.
TRA 88 – this attachment has been updated to reflect the new arrangements brought about by amendments through LN 140 of 2017.
TRA 90 – Calculation change so that the minimum credit is set to 75% of the eligible costs
The following new attachments are introduced in the return for the Y/A 2018 reflecting new legislative arrangements as indicated:
TRA 95 - ITA - LN 67 of 2018 - Deduction for Transportation Cost of Employees Rules, 2018.
TRA 96 - ITA - LN 228 of 2017 - Voluntary Occupational Pension Scheme Rules, 2017. Note that any income the tax on which is relieved by tax credits stands to be allocated to the Final Tax Account.
TRA 97 - ITA - Article 31E- Rental of property to another person for at least seven years (Housing Authority Scheme)
TRA 98 - ITA - LN 274 of 2017 - Deduction (Embellishment project) Rules
TRA 99 - ITMA - Article 19(4)(a) and LN 306 of 2017 - Audit report waiver and Deduction Rules
TRA 100 - ITA - LN 37 of 2018 - Notional Interest Deduction Rules. This attachment caters for both Notional Interest deemed received and Notional Interest Deduction (NID) claimed. Before proceeding to input data in this attachment, it is advisable to complete the rest of the return. To derive the NET Risk Capital attributable to MTA and/or FIA income please utilize the space provided for workings, in the lower part of TRA 100.
TRA 101 - ME Act - LN 153 of 2017 - Tax Credit for Research and Development and Innovation Regulations, 2017
TRA 102 - ME Act - LN 166 of 2017 - Research and Development Activities Regulations, 2017 - Rule 4
TRA 103 - ME Act - LN 166 of 2017 - Research and Development Activities Regulations, 2017 - Rule 6
TRA 104 - ME Act - LN 166 of 2017 - Research and Development Activities Regulations, 2017 - R&D 2014 – 2020
TRA 105 - ME Act - LN 167 of 2017 - Catering Capacity Building Regulations, 2017
There were other minor changes in a few attachments to address small issues encountered in the Y/A 2017 return, mainly to correct rounding issues and to ease validations (e.g. passive interest or royalties received).
TRA 29, TRA 34, TRA 36, TRA 54, TRA 65 and TRA 86 - slight changes mainly to address the deflation of the reference rate.
TRA 71 and TRA 81 – These two attachments have been removed as the incentives are no longer applicable.