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Malta Increases Interest Rate on Unpaid VAT and Revises Increase for Income Tax — Orbitax Tax News & Alerts

Malta published Legal Notice 227 of 2022 and Legal Notice 228 of 2022 on 14 September 2022, which contain the Value Added Tax (Rate of Interest) (Amendment) Regulations 2022 (VAT Regulations) and the Income Tax (Rate of Interest) (Amendment) Rules 2022 (Income Tax Rules).

The VAT Regulations provide that the interest rate for unpaid VAT is increased from 0.33% to 0.6% per month with effect from 1 September 2022, with balances of tax that became payable by taxable persons prior to that date remaining subject to the 0.33% rate. The regulations are deemed to have come into force on 1 September 2022.

The Income Tax Rules provide that the interest rate for unpaid income tax is increased from 0.33% to 0.6% per month or part thereof where the date by which the tax is payable is 31 August 2022 or later. It is also provided that the interest shall not exceed the amount of unpaid tax. The rules are deemed to have come into force on 1 June 2022.

Note that the Income Tax Rules replace a provision (proviso) introduced earlier in the year by the Interest and Additional Tax (Adjustment) Rules 2022, which provided for an increase in the interest rate to 0.6% per month in respect of any period or part thereof commencing on or after 1 June 2022.