Malta: Reduced Tax on Rental Income

The Government has recently launched a new withholding tax on rental income which is applicable to income received as from 1 January 2014. The new tax rate is a rate of 15% on the total gross income received as opposed to the previous 35%. The previous 35% rate was charged on the difference between gross income and allowable deductions.

The new rate is optional, and taxpayers, whether companies or individuals, can opt to retain the existing tax regime for rental income.

In order to take advantage of the reduced rate, form TA24 needs to be prepared and submitted together with the payment of tax to the Inland Revenue Department by the 30th June of the following year in which the income was received.

Apart from the above reduced rate, the Government is also giving the opportunity to individuals to regularise their position with regards to any previous undeclared rents relating to the years 2005-2012. Such individuals will pay a 15% tax on a two year averaged rental revenue received during the above mentioned years. In such case, no interest or penalties will be charged as long as such declaration and payment is made on Form TA 24A by the 30 June 2015.

 

For any further information please contact Nicky Gouder