Assignments of Rights Acquired under a Promise of Sale Agreement Rules published
The Assignments of Rights Acquired under a Promise of Sale Agreement Rules, 2020 were published in virtue of LN 191 of 2020.
The rules, inter alia, set out the criteria that must be satisfied for an assignment to be regarded as valid for the purposes of the rules, the deductions allowable when computing the income derived from an assignment and the criteria to be satisfied for such deductions to be allowable.
The rules also establish the parameters for the computation of tax at 15% on the first eur100,000 and the provisional tax of 7% due on the excess on account of the tax chargeable in accordance with article 56 of the Income Tax Act.
The rules furthermore provide that where an assignment is not a valid assignment or is not reported as required and in the manner set out in terms of the rules, the full amount of the income derived from the assignment shall be charged to tax at the rate of 35%.
LN 191 of 2020 also amends Rule 9 of the Capital Gains Rules (S.L. 123. 27) and deletes Rule 24(1) of the Tax on Property Transfers Rules (S.L. 123.92).
The Assignments of Rights Acquired under a Promise of Sale Agreement Rules apply to any assignment of rights acquired in terms of a promise of sale of immovable property situated in Malta as referred to in article 5A(2)(d) of the Income Tax Act made on or after 1 January 2020.
Visit MITAX in the Members Area for a summary of the rules.