Personal tax deadlines – 30 April 2022

As the 30 April deadline for a number of Malta personal income tax compliance obligations draws near, we are setting out below the salient obligations on taxpayers under the various schemes.

Income from part-time self-employment and employment

Individuals earning income from part-time self-employment may benefit from a flat rate of tax of 15% on the first €12,000 of profits. Tax is calculated on the profit rather than on turnover (i.e. revenue less expenses that were wholly and exclusively incurred in the production of the income).

Similarly, individuals having a part-time employment, who may have not elected and instructed their employer to have the eligible part-time income earned during 2021 taxed at part-time rate of 15%, may still opt to benefit from the flat rate of tax of 15% on the first €10,000 of income arising from their part-time employment.

This is applicable to individuals who are (i) in full time employment or (ii) pensioners or (iii) full time students/apprentices. The part-time employment must be registered as such with Jobsplus and for VAT purposes, where required for self-employment. Furthermore, the self-employment activity must not engage more than two employees, themselves also on a part-time basis.

With respect to the year of assessment 2022 (with reference to part-time activities carried on during 2021), the self-employed and employed individuals opting for this tax treatment are required to prepare and submit the TA22 form or TA23 form respectively, to the Commissioner for Revenue, and settle the tax payment due, by no later than the 30 April 2022.

As from year of assessment 2023, basis year 2022, individuals earning income from part-time self-employment or part-time employment may benefit from a further reduced flat rate of tax of 10% on the first €12,000 of profits, or on the first €10,000 income, respectively, as set out within our Budget Measures Implementation Act tax alert.

Rental income

Taxpayers earning rental income in the course of 2021 may opt to be taxed on such income at a flat rate of 15%, must file the prescribed online TA24 form and submit payment by 30 April 2022.

Tax is calculated on the gross amount received, without the possibility to claim any deductions. Furthermore, as previously set out in our tax alert on Private Residential Leases, persons who derived rental income from a long private residential lease of at least two years duly registered as such, are eligible for a tax rebate. This rebate may be claimed through the aforementioned TA24 form.

The option to be taxed at a flat rate of 15% may be availed of both in case of commercial and residential rents, and is open to both individual and corporate taxpayers, whether resident in Malta or not.

Provisional tax, special tax programmes, and social security contributions

Taxpayers requested to pay provisional tax by the Commissioner for Revenue are expected to settle the first payment by the 30 April 2022.

The first provisional tax payment amounts to 20% of the provisional tax benchmark, which is established on the tax charge with respect to year of assessment 2021, basis year 2020.

Beneficiaries under the the High Net Worth Individuals Rules, the Malta Retirement Programme Rules, the Residence Programme Rules, the Global Residence Programme Rules and the United Nations ("UN") Pensions Programme Rules are required to settle the minimum amount of tax payable in terms of the respective rules, also by 30 April 2022.

Self-employed and self-occupied individuals need also settle their first payment of Class 2 Social Security Contributions with respect to 2022, by the 30 April 2022. Payments are to be made to the Commissioner for Revenue.

Class 2 social security contributions falling due on 30 April 2022, are calculated on the basis of net income for the preceding taxable year i.e. 2021, and number of contributions paid are based on the number of Mondays from January to April 2022, i.e. 17 contributions.