Declaration of prior years rental income

Declaration of prior years rental income

An individual may regularise their tax position with respect undeclared rental income for the ‘relevant period’. The relevant period relates the period of eight years preceding basis year 2013 (ie: 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005).

In order to benefit from the above, the said rental income is to have been derived from a tenement leased as a residence or garage. The tenement cannot be a tenement requiring a licence from the MTA.

The rental income is to be included in the form TA 24A which and submitted to the Malta Inland Revenue by not later than the 30 June 2015. It shall be deemed for the purpose of the ITA that such rental income was received during basis year 2014.

Where the individual exercises the said option and declares rental income for more than 1 year, the total amount that is subject to tax shall not exceed the amount which is determined as follows:

 Y = (a/b) x 2

(i)   “Y” = Amount to be determined.

(ii)  “a” = Total rental income declared in the said relevant form.

(iii) “b” = the number of years comprised in the relevant period in respect of which the rental    income is declared.

It is important to note, that where following an enquiry there is evidence that an individual exercises the option to declare prior year rental income, overstates the amount of rental income included in the form for the purpose of obtaining a tax advantage, the full amount of rental income in the form shall be taxed at 15%.

Any rental income received during 2013 should have been included in the tax return for that year and subjected to tax at normal rates.