The following is an overview of the Guidelines:
Which taxes does the Scheme apply to?
- Provisional tax,
- Employee taxes,
- Maternity fund payments and social security contributions,
Which payments have been deferred?
The payment of the above taxes which fall due in March and April 2020.
What about returns and forms due during March and April 2020?
The deferral applies to the taxes only. All forms due must be submitted on time.
Who may benefit from this scheme?
The Guideline states that companies and self-employed persons who suffer a significant downturn in their turnover as a result of the economic constraints arising from the coronavirus pandemic and, as a result face substantial cash flow difficulties, may benefit from the scheme, specifically those listed in the application form. The application contains a drop-down menu which lists the following sectors available to be selected by the applicant for deferral:
- Hospitality and tourism
- Hairdressing, beauty treatment and physical well-being activities
The application form also gives the option to select ‘other’, for businesses not operating in one of the above sectors.
The Guidelines encourage businesses that have not been adversely hit by COVID-19 not to avail themselves of the deferral scheme and to continue two pay the relevant taxes every month.
Who may not avail themselves of the tax deferral scheme?
Companies and self-employed persons who have failed to comply with their tax obligations (submission of documents / returns and payments) falling due by 31st December 2019.
When will the deferred taxes fall due?
VAT: the Guidelines state that VAT dues are to be settled in two equal instalments with the two quarterly returns immediately following the quarter whose dues would have been deferred.
Presumably this means the following:
- The deferred VAT which was due by those that had a March deadline (i.e. for the VAT period November 2019 – January 2020), must be settled at the time when the VAT for the two subsequent quarters falls due (February to April due 15 June 2020, and May-July due 15 September 2020) [two equal instalments].
- The deferred VAT due by those that had an April deadline (i.e. for the VAT period December 2019 – February 2020) must be settled t the time when the VAT for the two subsequent quarters falls due (March-May due 15 July 2020, and June – August due 15 October 2020) [two equal instalments].
It is unclear from the guidance whether deferred VAT which is payable in the manner described above can be set off automatically against excess input VAT claimed by the tax payer in the VAT return for the tax period in which the repayment falls due.
Other taxes: All other eligible taxes which were originally due in March and April must be settled in four equal monthly instalments between May and August 2020.
The application to benefit from this scheme is to be made online by not later than 15th April 2020.
The above summary reflects the CCPS Malta’s understanding of the guidelines and should not be construed as advice on the scope of the tax deferral scheme nor the deadline for repayment. Certainty can only be achieved by obtaining clarification from the authorities.