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Final Settlement System (FSS) (Amendment) Rules, 2014

The definition of ‘emoluments’ of the Final Settlement System Rules has been amended

by means of Legal Notice 260 of 2014.

 

As from year of assessment 2015, the following income shall be considered

as ‘emoluments’ for income tax purposes:

i. any income relating to any pension, charge, annuity or annual payment, including any

fringe benefits, chargeable to tax under the Income Tax Act (ITA”)

ii. any income stated in article 12 of the ITA which would have been declared if not

exempted under the said article

iii. any pension, charge, annuity or annual payment arising or received in Malta

iv. any other remuneration payable or fringe benefits that are provided to an individual

for services rendered by him except where such individual receives such payment in

the course of his trade, business, profession or vocation or is otherwise required to be

registered for the purposes of the Value Added Tax Act, in respect of such services,

or where he renders such services to any individual for domestic and private purposes.

 

Article 12 includes the following:

• income of the University of Malta;

• allowances and benefits payable under the Social Security Act

• any interest, discount, premium or royalties accruing to or derived by a person not

resident in Malta, provided that such person is not engaged in trade or business in

Malta through a permanent establishment

• any gains or profits accruing to or derived by any person not resident in Malta on

a transfer of units in a collective investment scheme or any units and instruments

related to linked long term business of insurance

• any dividend paid by a company registered in Malta to an individual out of profits

allocated to the any of the taxed accounts, other than the final tax account and the

untaxed accounts, where such individual’s chargeable income, excluding such

dividend, is equal to or exceeds the relevant threshold

• the income of any retirement fund registered or retirement scheme licensed, registered

or otherwise authorised under the Special Funds (Regulation) Act, other than income

from immovable property situated in Malta

• the income of any institution, trust, bequest or foundation of a public character, and of

any other similar organization or body of persons, also of public character, which is

engaged in philanthropic activities;

• the income of any political party including the income of clubs adhering to political

parties

• wound and disability pensions

• capital sums received by way of commutation of pension, retiring or death gratuity or

received as consolidated compensation for death or injuries

• the income arising from a scholarship held by a person receiving full time instruction

at a university, college or similar educational institution

• the income of trade unions

• the profits of non-resident ship-owners

• the income of a club or similar institution operated exclusively for social welfare,

civic improvement, pleasure or recreation and for non-profit purposes

• the income of a philharmonic society which constitutes a band club

• the income of a club or similar institution that constitutes a sports club

• any dividend paid or payable out of gains or profits deriving from the production of

petroleum in Malta

• the income of a co-operative society

• any subsidy related to the Common Agricultural Policy

• the income of a collective investment scheme other than income from immovable

property situated in Malta

• any financial assistance received by an individual from his estranged spouse in

respect of the maintenance of a child

• any income or gains derived by a company registered in Malta from a participation

exemption

• any income or gains derived by a company registered in Malta which is attributable

to a permanent establishment (including a branch) situated outside Malta or to the

transfer of such permanent establishment

• royalties and similar income derived from patents in respect of inventions, copyright

or trademarks, whether in the course of a trade, business, profession, vocation or

otherwise

• The income from employment (other than income derived from the holding of an

office of director) of a married woman who is over forty years of age and starts

in employment after having been absent from any gainful occupation for at least

five years and where such income does not exceed €9,150 and the said woman is

chargeable to tax jointly with her spouse at the rates specified in the ITA.

 

A new schedule, Schedule A, been introduced in order to replace the previous Schedule

A.