Malta Taxation – COVID-19 updates

LOCAL UPDATES

Legal Notices

L.N. 135 of 2020 – Suspension of Legal Times (Revenue Acts) Order, 2020

As per legal notice 135 of 2020, when the Superintendent of Public Health orders the closure of any revenue department for the purpose of guarding against and, or controlling dangerous epidemics or infectious disease, the below listed legal time shall be suspended until it is prescribed by means of another order made by the Superintendent of Public Health.

Legal times, includes prescription periods and peremptory periods imposed under the Income Tax Act, the Duty on Documents and Transfers Act, the Income Tax Management Act, the Value Added Tax Act (the ‘Revenue Acts’) or under any other law for:

  • the making by the Commissioner for Revenue of any assessment, demand for payment, request for information, decision or order, and the issue and service of any notice thereof;
  • the payment by the Commissioner for Revenue of any refund of tax;
  • the institution, execution or continuation of any judicial action for the collection of tax, additional tax, administrative penalty or interest, or for the prosecution or request for the prosecution of any criminal offence.

When the Superintendent of Public Health orders the closure of any department falling under the responsibilities of the Commissioner for Revenue for the administration of any Revenue Act, any legal time referred to above that would expire, where it not for this order, during the period of closure or during the period of 28 days following the period of closure, shall be suspended. This applies to time imposed for:

  • the furnishing, delivery, filing or submission to the Commissioner for Revenue of any return, form, claim, objection, appeal, notice or information;
  • the payment or remittance to the Commissioner for Revenue of any tax due by or collected or withheld by any person.

This provision shall not apply and shall not suspend any legal time imposed under any Revenue Act for the submission of any return, form, clam or notice or the making of any payment that in terms of the particular Revenue Act is required to be submitted or made by electronic means.

L.N. 136 of 2020 – Local Tribunals (Delivery of Summons) (Amendment) Regulations, 2020

Legal notice 136 of 2020 provides that the Local Enforcement System Agency, shall have the power to demand from the Identity Malta Agency information concerning the last registered address of a physical person for the purposes of these Regulations.

L.N. 137 of 2020 – Code of Organization and Civil Procedure (Amendment of Schedule A) Regulations, 2020

Legal Notice L.N.137 of 2020 provides that during the period in which the Superintendent of Public Health orders the closure of the court, certain fees will not apply with exception to certain actions including actions pertaining to civil status of a person, human rights and employment.

L.N. 138 of 2020 – Local Tribunals (Suspension of Delivery of Summons) Regulations, 2020

Legal Notice 138 of 2020 provides that certain Regulations in the Local Tribunals (Delivery of Summons) Regulations, (S.L. 291.01) are suspended as a precautionary measure for the purpose of guarding against and, or controlling dangerous epidemics or infectious disease as announced by

the Superintendent of Public Health, and shall remain so suspended for an indefinite period until so required by the Superintendent of Public Health and until the Minister lifts such suspension.

Notices

Covid Wage supplement: Payroll Implications published by the Commissioner for Revenue

On 4th April 2020 the Commissioner for Revenue published a notice with guidelines on the tax treatment in connection to the Covid wage supplement government contribution received by employers to support for wages of employees.

The notice clarifies that the supplement it is taxable in the hands of the employee will not be treated as income or grant to the employer for Income Tax purposes, hence not taxable nor tax deductible.

Covid Wage Supplement: Further clarifications published by Malta Enterprise

Malta Enterprise included further clarifications for the eligibility of Covid wage supplement. It provided further explanation in connection to the cases where the employees are asked not to attend to work due to complete suspension of operations and in cases where they are required to work a four or three day week following an agreement with DIER.

It also clarifies that the COVID Wage Supplement may only cover a person’s main source of income. Those in receipt of a Government, retirement or services pension, and students receiving a stipend are not eligible. 

INTERNATIONAL UPDATES

Covid-19 crisis impact on the double tax treaties

The OECD Secretariat issued analysis on the impact that Covid-19 crisis has on the double tax treaties in relation to the following concerns:

  • The creation of permanent establishments due to employees dislocated to countries other than the country where they regularly perform their employment and due to employees working from home;
  • The residence status of a company (place of effective management) due to relocation, or inability to travel of chief executive officers or other senior executives;
  • Cross border workers employment tax issues
  • Change to the residence status of individuals due to relocation, or inability to travel

Commission and European Investment Fund unlock €8 billion in finance for 100,000 small and medium-sized businesses

Small and medium-sized businesses are suddenly facing lack of liquidity due to the effects of Covid-19 pandemic. To support this businesses the European Commission has unlocked €1 billion from the European Fund for Strategic Investments (EFSI) that will serve as a guarantee to the European Investment Fund (EIF), part of the European Investment Bank Group. This will allow the EIF to issue special guarantees to incentivise banks and other lenders to provide liquidity to at least 100,000 European SMEs and small mid-cap companies hit by the economic impact of the coronavirus pandemic, for an estimated available financing of €8 billion.