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Tax Return Cycle

Last Updated: 02/07/2020

​The Non-Filer concept

The Non-Filer system applies to a taxpayer who is not required to file a Tax Return, as all the relevant data related to his income, deductions and tax credits is available to the Commissioner for Revenue.

A taxpayer who qualifies as a Non-Filer and who therefore is served with a Tax Statement instead of a Tax Return is not subject to the obligations of the Self-Assessment.

In the eventuality that a Non-Filer does not agree with the Tax Statement sent to him by the Commissioner, he is requested to fill in and submit an AF (Correction Form) to include the necessary adjustments. The AF is generated by the department’s computer system and shows details of income and deductions on which the tax due was determined. Following the filing of an AF a refreshed new tax statement is issued. This will reflect the changes made by the taxpayer himself.

 

Tax Return Filer

As from year of assessment 1999, the Self-Assessment system was introduced in order to determine the tax due. Under the Self-Assessment system every taxpayer who files a Tax Return is required by law to make his own ‘assessment’ for tax purposes.

The Commissioner considers such Self-Assessment as indicating the correct tax position of the individual.

Individual taxpayers are obliged to send their Tax Return and self-assessment by 30th June.

The tax return is to contain such particulars, statements, accounts, computations or other documents as may be necessary to enable such person’s income, allowable deductions and the tax payable/refundable to be readily ascertained. As a person who makes a self-assessment knows what the tax due is, his main obligation is to pay the tax due according to the self-assessment and thus need not depend on any determination on the part of the Commissioner. The Tax Settlement Date is the 30th June.

After the 30th June, any unpaid amount of tax will incur an additional interest of 0.54% every month. If the tax return is not submitted in time additional tax for late filing will be imposed.

A tax statement will follow the filling of the tax return. This will reflect the declarations made by the taxpayer himself, and only arithmetical adjustments can be made by the Commissioner at this stage.

If it results that tax had been overpaid and the income tax return was submitted in time to the Commissioner, the overpaid tax will be refunded by not later than the 31st of December. Interest at the rate of 0.54% per month will start to accrue in taxpayer’s favour from the following January 1st in the case that the refund is issued after this date. Please note that the said refund will not be issued unless the taxpayer has submitted all his income tax and VAT returns, where applicable.

Tax Return Year of Assessment 2020

Provisional Tax and Social Security Contributions Booklet

 

Tax Statement 

It is important to note that the tax statement is not an assessment raised by the Commissioner but it simply reflects uncontested figures supplied to the Commissioner for Revenue. A Tax Statement for the year is not in any way final.

Normally, a taxpayer receives a tax statement, not an assessment. The tax statement contains details of income according to the information available to the Commissioner for Revenue (for non-filers) or income declared by the taxpayer himself in his tax return and self-assessment (in the case of return filers). In the case the taxpayer does not agree with the tax statement sent to him by the Commissioner for Revenue, he is required to file and an AF (Correction Form) to make the necessary adjustments. The AF is generated by the department’s computer system and shows details of income and deductions on which the tax due was determined. Following the filing of an AF, a refreshed tax statement is issued. This will reflect the changes made by the taxpayer himself.

If a taxpayer who has filed a tax return needs to effect adjustments, corrections or additions to the self-assessment, before or upon receiving a tax statement, he will be required to lodge an AF 1 (Adjustment Form). This is a prescribed form. Article 13 (3) of the ITMA refers to this form as a “further return”. It is important to note that the filing of Adjustment Forms does not relieve the taxpayer from any penalties, which he may have incurred on account of any omissions in the Tax Return and Self-Assessment. After the filing of the AF1, taxpayer is served with a refreshed tax statement. This should reflect the changes made in the AF1.

 

Tax Assessment

The Self-Assessment system is operative in Malta. Under this system, every person who files a tax return is required by law to make his own assessment for tax purposes. The Commissioner for Revenue considers such Self-Assessments as indicating the correct tax position of that person. However, the Commissioner conducts each year tax enquires on a number of persons to ensure that correct declarations have been made by the persons under enquiry in their tax return and Self-Assessment. If in the opinion of the Commissioner, the declaration made by a person in his tax return and Self-Assessment is not correct, the Commissioner may issue an assessment on that person.

 

Objecting to a Tax Assessment

Anyone who is served with a tax assessment by the Commissioner for Revenue may object to the assessment. The objection must to be filed on the prescribed form which is attached to the Notice of Assessment. For the objection to be valid, the following conditions must to be satisfied:

  • the objection must be filed within 30 days of the receipt of the Notice of Assessment; and
  • the grounds for the objection must be clearly stated; and
  • any tax not in dispute must to be paid before filing the objection; and
  • if the tax return for the year under objection had not be filed, it must be filed with the objection.

When a valid objection is filed, the grounds for the objection are first carefully examined by officers appointed to this duty by the Commissioner. Then discussions are held with the person who filed the objection and/or his representatives. If an agreement on the income that should be declared is reached and signed by both parties, a revised assessment is issued to replace the original assessment. Where an agreement is not reached, and the Commissioner is still of the opinion that the declared income is not correct, a Notice of Refusal to the objection is issued. A person who receives a Notice of Refusal may appeal against the Notice of Refusal by filling a prescribed form for this purpose. To be valid, an appeal must:

  • be lodged within 30 days of receipt of the Notice of Refusal; and
  • the grounds for the appeal should be clearly stated.