Fabian Demicoli

Malta VAT amnesty remission of interest & administrative penalties

 Malta's 2012 Budget, recently announced by the Minister of Finance, launched a temporary VAT amnesty providing for a remission of interest and administrative penalties for registered persons who have an outstanding balance under the 1994 VAT Act, Customs and Excise Tax Act or the 1998 VAT Act. The arrangement is open to Malta VAT registered persons who have failed to submit the necessary VAT returns (or VAT declarations) falling due up to the 15 October 2011 and/or have balances due to the VAT Department under any of the abovementioned Acts as at 15 October 2011.

Requirements for Eligibility

A person registered under article 10 of the VAT Act would be eligible for the scheme where he:

1. Has arrears due on returns for periods whose returns were due on or prior to 15 October 2011;

2. Has submitted all VAT returns which were due on or prior to 15 October 2011 by not later than 15 January 2012;

3. Submits on time and with full payment (if any) all VAT returns falling due on and after 15 November 2011 (an unofficial extension of one month has been granted with respect to VAT returns that were due to be filed by the 15 November 2011);

4.  Withdraws all appeals lodged before the VAT Appeals Board, the Administrative Law Tribunal or the Court of Appeal by 15 January 2012;

5. Submits payments by the dates indicated in the amnesty agreement (refer to Table 1):

The percentage by which the interest and administrative penalties will be decreased is determined by the option taken by the VAT registered person either to pay all the VAT and reduced interest and penalties by 15 March 2012 or pay the amounts due over a period of time between March 2012 and February 2013 as per Table 1 below.

 

 

 

Where the balance due to the VAT Department is equal to or greater than the total interest and administrative penalties due, the percentage reduction is calculated on the interest and administrative penalties only. However, where the balance due is less than the total interest and administrative penalties due, the percentage reduction is calculated on the balance due.

Numerical Example 1

Total outstanding balance due is €15,000

Total interest and administrative penalties accrued is €10,000

In this case the total outstanding balance is more than the total interest and administrative penalties accrued and the remission will affect the €10,000 interest and administrative penalties as follows: Table 2

 

 

 

 

 

 

Numerical Example 2

Total outstanding balance due is €5,000

Total interest and administrative penalties accrued is €10,000

 

 

In this case the total outstanding balance is less than the total interest and administrative penalties accrued and the remission will affect the €5,000 balance due as follows:

Table 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A person registered under article 11 or 12 of the VAT Act would be eligible for the scheme where he:

1. Submits all pending declarations/notices by 15 January 2012;

2. Pays €10 in respect of each default by 15 January 2012

Importantly, in all the above cases: The remission shall only have effect in the account of the registered person once final payment in accordance with the amnesty agreement is effected to the satisfaction of the VAT Department;

Where the registered person complies with the relevant conditions of the amnesty all interest that may accrue during the repayment period will be remitted;

The amnesty does not entitle a registered person to make a claim for a refund in respect of interest and penalties already paid;

If interest is remitted under the scheme, the VAT Department reserves the right to deduct the interest so remitted from any interest payable to that person on VAT refunds due to him in the next six years that are not paid by the due date.

Info from Deloitte

What we can do for you

INFORMATION POINT

BUSINESS SERVICES

MEMBERSHIP BENEFITS

LOCAL ISSUES & LEGISLATION

B2B NETWORKING EVENTS

LEGAL ADVICE

FUNDING ASSISTANCE

COURSES

BECOME A MEMBER

The Malta Chamber of SMEs represents over 7,000 members from over 90 different sectors which in their majority are either small or medium sized companies, and such issues like the one we're experiencing right now, it's important to be united. Malta Chamber of SMEs offers a number of different services tailored to its members' individual requirements' and necessities. These range from general services offered to all members to more individual & bespoke services catered for specific requirements.

A membership with Malta Chamber of SMEs will guarantee that you are constantly updated and informed with different opportunities which will directly benefit your business and help you grow. It also entails you to a number of services which in their majority are free of charge and offered exclusively to its members (in their majority all free of charge).