Legal Notice 148 of 2018 - Final Settlement System (FSS) Amendment Rules 2018
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Legal Notice 148 of 2018 - Final Settlement System (FSS) Amendment Rules 2018

These new rules came in effect as from 1st April 2018 and mainly relate to amended fines and penalties in terms of the Income Tax Management Act Cap. 372 of the Laws of Malta (“the Act”).


The main provisions of these new changes are the following:

  • Empowering the Commissioner for Revenue to direct any taxpayer to effect income tax payments in terms of the Final Settlement System (“FSS”) by electronic means.
  • Providing for the Commissioner the powers to charge interest on any amount of tax due or payable in terms of FSS. The said interest would be charged as per Art. 44 (2A) of the Act being the standard interest rates applicable in normal circumstances on income tax due.
  • Allowing the Commissioner for Revenue to sue any payer for recovery for tax deducted or that should have been deducted in terms of FSS rules, together with interest. Previously the law did not allow for interest to be also claimed by the Commissioner in such cases.
  • The Schedule C to the Rules providing the additional tax and interest have been amended in part to reflect the following: 
  1.      Failure to file an FS5 form in terms of the prescribed time-frames: Flat additional tax of EUR 15 (previously it was EUR 23 per month or part thereof)
  2.      Failure to file an FS7 form together with the corresponding FS3s in terms of the prescribed time-frames: Flat additional tax of EUR 200 (previously the higher of 0.54% per month or EUR 46)
  3.      Repealing of additional tax on failure to deduct tax, tax remittances or to correctly value fringe benefits. This repeal of such tax is to be viewed in line with the aforementioned right of the                       Commissioner to request interest to be paid (however removing any flat additional tax charges in the cases of such ommissions).
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