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VAT: Remission of Interest and Administrative Penalties Rules - Extension of scope existing rules

Deloitte Malta Tax Alert

Remission of interest and administrative penalties

Remission of interest…  

On 28 March 2014, rules for the remission of interest (due by virtue of late payment of Malta VAT) had been introduced. In terms of these rules, the Commissioner for Revenue may, at his discretion, remit wholly or in part, any interest incurred by a taxpayer by virtue of late payment of VAT due if he is satisfied that the VAT due was not paid due to a reasonable cause.

… and administrative penalties

The scope of the rules has now been extended to also cover administrative penalties that may become due under any of the provisions of article 37 to 41 of the Malta VAT Act (i.e. administrative penalties that may become due – for example – for reasons of failure to (timely) register for VAT, failure to (timely) submit a VAT return / recapitulative statement, failure to correctly declare VAT due in a VAT Form 004, etc.).

The Commissioner for Revenue may impose additional conditions to allow the reduction of the interest/administrative penalties, such as:

  • the requirement for no further defaults within a specified period; and
  • the requirement to pay any outstanding VAT amount within a specified period.

It may also be possible to agree a payment plan with the VAT Department in respect of any outstanding VAT amounts.

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How can Deloitte help?

If you have been imposed interest and/or administrative penalties for failure to comply with the rules imposed in terms of the VAT Act, and Malta VAT due was not paid on time due to a reasonable excuse, you may be eligible to obtain a remission of any such interest and/or administrative penalties.

We can:

  • review individual scenarios and help you determine whether you are eligible to apply for a remission;
  • provide guidance on why your situation/circumstances would constitute a ‘reasonable excuse’;
  • assist you with the preparation of your application and the submission thereof to the VAT authorities; and
  • deal with the local tax authorities if required.
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