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Part time Income Rules (Amended)

The part time income rules have been revised through LN 185 of 2014 and LN 186 of

2014.

The following rules will be effective from year of assessment 2015.

Individuals Eligible to benefit from the Part time Income Rules

• Individuals receiving full-time instruction at a university, college or other similar

educational institution;

• Individuals serving an apprenticeship with a view to qualifying in a trade or

calling, or where an individual has income in his own right falling under article

4(1)(b) or (d) ITA

• Full time employees registered with the ETC;

• Recipients of a pension taxable in Malta from past employment; and

• A tax payer who is married to an individual who receives full-time instruction or

is serving an apprenticeship or has income in his or her own right which is eligible

to benefit from the Part time Income Rules.

Original Beneficial Tax Rate - 15% tax on the first Euro 7,000 of annual part time

employment. Any excess income generated from the part time work is added to the

tax payer's taxable income and taxed at the normal progressive rates

The Part time income rules have been amended as follows:

The Euro 7,000 threshold for the application of the beneficial tax rate of 15% has

been increased to Euro 10,000 when the income from part time work is related to

employment income and to Euro 12,000 when the income from part time work is

related to self employment income.

Conditions which should be satisfied by part time self employed individuals to be

eligible to benefit from the preferential rate of 15%:

• The trader must be VAT registered (if applicable);

• The trader has registered his part time work with the ETC;

• The trader cannot employ more than two employees on a part time basis;

• The trader must keep proper books and records as required by Art 11 ITMA;

• The trader performs such work for a company, organisation, enterprise or entity

other than that with which he is employed on full-time basis.

Conditions which should be satisfied by part time employed individuals to be eligible

to benefit from the preferential rate of 15%:

• The employee is registered with ETC;

• The full time employment and part time employment must not be carried out

with same employer or employers controlled and beneficially owned directly or

indirectly to the extent of more than 50% by the same shareholder.

Compliance Documentation

The adequate forms TA 22 (with respect to part time self employed) and TA 23 (with

respect to part time employment income) should be prepared and submitted with

the Inland Revenue Department.

The TA23 and payment of tax on part time employment income should be submitted

with the Inland Revenue Department by not later than 21st December of the year in

which the part time income is being undertaken.

The TA22 which was previously sent to the Inland Revenue Department by the end

of May and September of the year in which the part time self employment was

undertaken and June of the year following the year in which the part time self-
employment was undertaken, will be prepared in one form (for the whole year).

This document should be submitted with the Inland Revenue Department (together

with the tax payment) by not later than 30 June of the year following the year in

which the part time self-employment was undertaken.