BUDGET MEASURES IMPLEMENTATION [ CAP. 457.  1
CHAPTER 457
BUDGET MEASURES IMPLEMENTATION ACT
To implement various budget measures and other administrative
measures.
1st January, 2003
ACT II of 2003.
Short title.
Implementation Act.
PART I
Coming into force 
of this Part.
2. The provisions of this Part shall be deemed to have come
into force on the 1st January, 2003.
Interpretation.
Cap. 174.
3. For the purpose of this Part, "revenue" has the same
meaning as is assigned to it in article 2 of the Financial
Administration and Audit Act, but does not include proceeds from
local loans.
Authority to raise 
loan.
4. (1) Subject to the provisions of this Act, the Government
of Malta may raise in Malta, by way of loan, a sum of money not
exceeding one hundred million Maltese liri.
Cap. 161.
(2) For the purpose of raising the aforesaid loan the Minister
responsible for finance is hereby authorised to issue stock in Malta
under the provisions of the Local Loans (Registered Stock and
Securities) Ordinance on such terms and conditions as the said
Minister may approve.
Purpose.
be appropriated and applied for the purpose of meeting excess
expenditure over revenue incurred in the Consolidated Fund during
the years 2001 and 2002, and that projected to be incurred during
the year 2003:
Provided that any amount borrowed under this Part in
excess of the amount actually required for the said purposes and
remaining as a balance in the Consolidated Fund at the end of 2003
shall be used to meet excess expenditure over revenue in the
Consolidated Fund during the first subsequent year in which such
excess is incurred.
PART II
Amendment of the 
Income Tax Act.
Cap. 123.
6. (1) This Part amends the Income Tax Act and shall be read
and construed as one with the Income Tax Act, hereinafter in this
Part referred to as "the principal Act".
(2) ( a ) The provisions of paragraph ( c ) of article 22 and
paragraph ( a ) to ( d ) of article 25 shall be deemed to have come into
force on the 1 st  January, 2001 and shall apply with respect to any
year of assessment commencing on or after 1 st  January 2002.
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( b ) The provisions of articles 9, paragraph ( b ) of article 10
and articles 12, 18, paragraph ( c ) of article 19 and article 23 shall
be deemed to have come into force on the 1 st  January, 2002 and
shall apply with respect to any year of assessment commencing on
or after 1 st  January 2003.
( c ) The provisions of paragraph ( a ) of article 10 and
paragraph ( a ) and ( b ) of article 22 shall come into force on the 1 st
January 2003 and shall apply with resepct to any year of
assessment commencing on or after 1 st  January 2004.
( d ) The provisions of article 13 shall come into force on
such date as the Minister responsible for finance may by notice in
the Gazette appoint.
Addition of article 
27A to the 
principal Act.
13. Immediately after article 27 of the principal Act, there
shall be inserted the following new article: ( this amendment is not
yet in force )
'' Tax treatment 
of mergers, 
divisions of 
companies etc.
27A.    Notwithstanding the provisions
contained in the Income Tax Acts, the
Minister may make rules regulating the
tax treatment of companies and their
members and other similar bodies or
persons concerning mergers and divisions
of companies, transfer of assets between
companies and exchange of shares
concerning companies and for the
purposes of this article:
( a ) "merger" shall mean an
operation whereby:
BUDGET MEASURES IMPLEMENTATION [ CAP. 457.  3
- one or more
companies, on being
dissolved without
going into liquidation,
transfer all their assets
and liabilities to
another existing
company in exchange
for the issue to their
shareholders of
securities representing
the capital of that other
company, and, if
applicable, a cash
payment not exceeding
such percentage as
may be prescribed of
the nominal value, or,
in the absence of a
nominal value, of the
accounting par value
of those securities,
- two or more
companies, on being
dissolved without
going into liquidation,
transfer all their assets
and liabilities to a
company that they
form, in exchange for
the issue to their
shareholders of
securities representing
the capital of that new
company, and, if
applicable, a cash
payment not exceeding
such percentage as
may be prescribed of
the nominal value, or
in the absence of a
nominal value, of the
accounting par value
of those securities,
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- a company, on being
dissolved without
going into liquidation,
transfers all its assets
and liabilities to the
company holding all
the securities
representing its
capital;
( b ) "division" shall mean an
operation whereby a
company, on being dissolved
without going into
liquidation, transfers all its
assets and liabilities to two
or more existing or new
companies, in exchange for
the pro rata issue to its
shareholders of securities
representing the capital of
the companies receiving the
assets and liabilities and, if
applicable, a cash payment
not exceeding such
percentage as may be
prescribed of the nominal
value or, in the absence of a
nominal value, of the
accounting par value of those
securities;
( c ) "transfer of assets" shall
mean an operation whereby a
company transfers without
being dissolved all or one or
more branches of its activity
to another company in
exchange for the transfer of
securities representing the
capital of the company
receiving the transfer;
BUDGET MEASURES IMPLEMENTATION [ CAP. 457.  5
( d ) "exchange of shares" shall
mean an operation whereby a
company acquires a holding
in the capital of another
company such that it obtains
a majority of the voting
rights in that company in
exchange for the issue to the
shareholders of the latter
company, in exchange for
their securities, of securities
representing the capital of
the former company, and, if
applicable, a cash payment
not exceeding such
percentage as may be
prescribed of the nominal
value or, in the absence of a
nominal value, of the
accounting par value of the
securities issued in
exchange;
( e ) "transferring company" shall
mean the company
transferring its assets and
liabilities or transferring all
or one or more branches of
its activity;
( f ) "receiving company" shall
mean the company receiving
the assets and liabilities or
all or one or more branches
of the activity of the
transferring company;
( g ) "acquired company" shall
mean the company in which
a holding is acquired by
another company by means
of an exchange of securities;
( h ) "acquiring company" shall
mean the company which
acquires a holding by means
of an exchange of securities;
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PART III
Amendment of the 
Accountancy 
Profession Act.
Cap. 281.
All amendments are in force and have been inserted in the Act
accordingly.
PART IV
Amendment of the 
Import Duties Act.
Cap 337.
All amendments are in force and have been inserted in the Act
accordingly.
PART V
Amendment of the 
Duty on 
Documents and 
Transfers Act.
Cap. 364.
All amendments are in force and have been inserted in the Act
accordingly.
PART VI
Amendment of the 
Motor Vehicle 
Registration Tax 
Act.
Cap. 368.
All amendments are in force and have been inserted in the Act
accordingly.
PART VII
Amendment of the 
Income Tax 
Management Act.
Cap. 372.
40. (1) This Part amends the Income Tax Management Act,
and shall be read and construed as one with the Income Tax
Management Act, hereinafter in this Part referred to as "the
principal Act".
(2) ( a )  The provisions of article 48 shall come into force on the
1 st  January, 2002 and shall apply with respect to any year of
assessment commencing on or after 1 st  January, 2003.
(b) The provisions of paragraph ( a ) of article 41, of article 42
and of paragraph ( c ) of article 44 shall come into force on such date
as the Minister responsible for finance may by notice in the Gazette
appoint.
Amendment of 
article 4 of the 
principal Act.
41. Article 4 of the principal Act shall be amended as follows:
( a ) subarticle (3) thereof shall be substituted by the
following new subarticle:
"(3) Nothing contained in this article shall prevent
the disclosure to any authorised representative
of any other Government of such information as
is required to be disclosed in terms of -
( a ) any arrangement made under article 76 of
the Income Tax Act including the disclosure
of such facts as may be necessary to enable
proper relief to be given in Malta or
elsewhere under any such arrangement or
( i ) "branch of activity" shall
mean all the assets and
liabilities of a division of a
company which from an
organizational point of view
constitute an independent
business, that is to say an
entity capable of functioning
by its own means.".
BUDGET MEASURES IMPLEMENTATION [ CAP. 457.  7
under article 89 of the Income Tax Act;
( b ) any other arrangement between Malta and
other States or their tax authorities
providing for the reciprocal exchange of
information for tax purposes."; and
( b ) Amendment is in force and has been inserted in the Act
accordingly.
Addition of new 
article 10A to the 
principal Act.
42. Immediately after article 10 of the principal Act there shall
be inserted the following new article:
Amendment of 
article 23 of the 
principal Act.
44. Article 23 of the principal Act shall be amended as
follows: 
( a ) Amendment is in force and has been inserted in the Act
accordingly ;
( b ) Amendment is in force and has been inserted in the Act
accordingly ; and
( c ) immediately after the second proviso to subarticle (3)
thereof, there shall be added the following new
proviso:
"Provided also that the provisions of this
subarticle shall not apply where the deductions
of tax made under this article refer to income
chargeable under article 4(1)( a ) of the Income
Tax Act, and that the amount of deduction in
respect of such income that may be prescribed
under subarticle (1) of this article may not
exceed 15 cents in every Lira of the gross
income paid and no person shall be charged to
further tax in respect of such income, but such
income shall be declared by the person to whom
it is paid and all the other income of such person
shall be deemed to constitute the last part of that
person’s income for that year.".
'' Commissioner 
may request 
information .
10A.    The Commissioner may, when
and as often as he deems necessary, give
notice in writing to any person to furnish
him, within a reasonable time stated in
such notice, not being less than thirty
days, such information as may be
necessary in order to provide information
to foreign tax authorities where
arrangements between Malta and the
respective State or its tax authorities
exist for the reciprocal exchange of
information for tax purposes and where
the information is such that the
Commissioner could collect for the
purposes of the Income Tax Acts.".
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PART VIII
Excise Duty Act.
Cap. 382.
49. All amendments are in force and have been inserted in the
Act accordingly.
