{"id":152248,"date":"2026-10-16T11:19:23","date_gmt":"2026-10-16T11:19:23","guid":{"rendered":"https:\/\/www.legal500.com\/guides\/?post_type=comparative_guide&#038;p=152248"},"modified":"2026-10-16T14:29:12","modified_gmt":"2026-10-16T14:29:12","slug":"malta-tax-disputes","status":"publish","type":"comparative_guide","link":"https:\/\/www.legal500.com\/guides\/chapter\/malta-tax-disputes\/","title":{"rendered":"Malta: Tax Disputes"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-152248","comparative_guide","type-comparative_guide","status-publish","hentry","guides-tax-disputes","jurisdictions-malta"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Deloitte Legal<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2022\/04\/Deloitte_Legal_Logo_D-space-002.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Deloitte Legal<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2022\/04\/Deloitte_Legal_Logo_D-space-002.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Tax Disputes laws and regulations applicable in Malta<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it necessary for a taxpayer to register with the tax authority? Are separate registrations required for corporate income tax and value added tax\/sales tax?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Natural persons: Individuals in Malta must have a tax identification number (the \u2018TIN\u2019) to file income tax returns. For Maltese citizens and residents, the TIN is typically the same as their ID card number which is issued upon birth. Consequently, registration is not necessary for such individuals. On the other hand, individuals of non-Maltese origin who reside in Malta after their birth must register with the Commissioner for Tax and Customs (the \u2018CfTC\u2019) as taxpayers and are provided a 9-digit number for their TIN.<\/p>\n<p>Partnerships: Partnerships in Malta are required provide a \u2018Registration of a Partnership\u2019 form to the CfTC, wherein such partnerships also elect whether they are to be tax separately (i.e. as individuals) or whether they are to be treated as a company for income tax purposes.<\/p>\n<p>Companies: A taxpayer is required to register for income tax purposes in Malta in three scenarios: the company is incorporated in Malta, or its place of management and control is located in Malta, or the company carries on an activity in Malta. In such cases, the company must be registered with the Registrar. Registration is normally self-executing once a company is incorporated or a place of business is registered with the Malta Business Registry. Following such registration, the company will be registered with the CfTC, after which a 9-digit TIN is automatically assigned to such company. Special cases requiring ad hoc registration may occur where a foreign company derives income arising in Malta that is (a) not subject to deduction of tax at source provisions and (b) does not result in automatic registration with the CfTC by reason of not meeting the registration threshold (with the Malta Business Registry) under the Companies Act.<\/p>\n<p>Separately, a Malta VAT registration is required where the person makes VAT taxable supplies in Malta or is otherwise required to register in terms of VAT law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In general terms, when a taxpayer files a tax return, does the tax authority check it and issue a tax assessment, or is there a self-assessment system where the taxpayer\u2019s own assessment stands unless the tax authority intervenes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>From an income tax perspective, Malta operates a self-assessment system. A taxpayer filing an income tax return is generally required to calculate their chargeable income, as a result of which the tax to be paid by such taxpayer, or, alternatively, the tax refund which is to be provided to such taxpayer, is determined. Consequently, the self-assessment forms the basis for determining a taxpayer\u2019s tax position, which the CfTC, at first instance, assumes to be correct. The CfTC may, however, intervene should any arithmetical errors arise.<\/p>\n<p>Notwithstanding the above-mentioned assumption, the CfTC may, at a later stage, conduct an enquiry on the taxpayer\u2019s income tax return(s). The CfTC is empowered to require the taxpayer or third parties to furnish additional information as a result of such an enquiry. Furthermore, should the CfTC determine that a taxpayer has under-declared their income, the CfTC may also request additional information for an additional assessment to be undertaken.<\/p>\n<p>From a VAT perspective, a self-assessment system also applies. A VAT-registered person is generally required to file a VAT return declaring the VAT chargeable on its supplies, the input VAT which may be deducted, and the resulting net VAT payable or refundable for the relevant tax period. The self-assessment forms the basis for determining the taxpayer\u2019s VAT position.<\/p>\n<p>No formal VAT assessments are issued by the CfTC after every VAT return. However, verifications and VAT audits may be carried out by the CfTC and where the CfTC has reason to believe that the VAT return does not contain a correct declaration, the CfTC may issue an assessment in accordance with the applicable rules.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a taxpayer amend their return after it has been filed? If so, are there any time limits for doing so?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>After a taxpayer files an income tax return under the self-assessment system, such taxpayer may make any necessary adjustments, corrections or additions to such a return before receiving a Tax Statement from the CfTC by way of the submission of a \u2018further return\u2019 adjustment for which is referred to as Form AF1. There is a 5-year time limit with respect to the submission of a \u2018further return\u2019 which results in a reduction in the tax payable or in an increase in the tax repayable to the taxpayer. Such a reduction\/increase shall cease to have effect if the \u2018further return\u2019 is made later than 5 years from the expiration of the relevant year of assessment.<\/p>\n<p>A taxpayer may also file a correction form, referred to as Form AF, where such taxpayerdisagrees with the CfTC\u2019s issued Tax Statement. Such Form AF may be submitted within 5 years from the date on which the taxpayer is notified about the issuance of such Tax Statement. The Form AF contains information which was previously made available to the CfTC and may be corrected by the taxpayer. If the Form AF is filed later than 3 months from the date of the notification of the Tax Statement, interest shall become payable by the CfTC on any repayment of tax that may be due only where such repayment is paid later than 1 month from the filing of the Form AF. The expiration of this time period will apply from the end of the said month.<\/p>\n<p>From a VAT perspective, a previously filed VAT return may generally be corrected either through a subsequent VAT return or by means of a VAT correction form. A correction may only be made through a subsequent VAT return where the overstatement or understatement does not exceed 5% of the relevant output tax or input VAT originally declared, and the subsequent VAT period commences no later than six months from the expiration of the VAT period to which the error relates. If either of these conditions is not satisfied, the correction must generally be made by way of a VAT correction form.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please summarise the main methods by which a tax authority may challenge the amount of tax a taxpayer has paid by way of an initial assessment\/self-assessment. Does the tax authority need any justification to commence such a challenge?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For direct tax, when a taxpayer files an income tax self-assessment tax return, the CfTC has a range of options available to it to challenge the relevant amounts. It may raise a determination based on arithmetical adjustments. The CfTC may raise assessments including additional assessments in situations where new information comes to light, when it deems the tax amount was under declared, within 5 years from the end of the year in which a return was submitted without any further justification required.<\/p>\n<p>In situations where no full disclosures were made or in cases of tax avoidance or materially incorrect or misleading returns, an assessment or additional assessment\/s can be made at any point in time however, if this is challenged the CfTC would need to prove bad faith or fraud by the taxpayer.<\/p>\n<p>For VAT, where the CfTC has reason to believe that a return does not contain a full and correct statement of the matters required to be declared, he may serve a provisional assessment within six years from the end of the tax period or from the date the return is submitted, whichever is the latest. Where a correction form is submitted, the prescriptive period will run from the date when such correction form has been submitted. The CfTC is not required to provide any further justification. After the expiration of a period of not less than thirty days and not more than six months, the CfTC may issue an assessment of the output tax, deduction and administrative penalty due.<\/p>\n<p>A taxpayer may appeal an assessment to the Administrative Review Tribunal, within 30 days from the service of the said assessment. The appeal is only valid if the VAT return has been delivered and all undisputed tax has been paid. The onus of proving that the assessed amount is incorrect lies on the taxpayer, and the tribunal may reduce, increase or cancel the assessment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the time limits for a tax authority to commence a challenge to the taxpayer\u2019s assessment\/self-assessment (disregarding any override of these limits to comply with obligations to provide relief from double taxation under a tax treaty)? Does a tax authority have any options to challenge a self-assessment after expiry of the relevant time limit?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Please see our answers to question 4 above regarding the various time limits applicable to challenges to self-assessments. In general action for the payment of tax, additional tax, interest or any penalty may be taken during any time from the date on which it becomes due and payable up to 8 years from that date or, where an assessment in respect thereof has been made, from the date on which that assessment becomes final and conclusive.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is tax fraud defined under the laws of your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no singular definition of tax fraud in Maltese tax legislation as fraudulent conduct is identified over a number of different tax statues including Income Tax, VAT, Excise Duty, Duty on Documents and Transfers through various mechanisms. In general, fraudulent conduct is based on an intentional or wilful act\/omission designed to evade tax, mislead the tax authorities or obtain an unlawful tax advantage. By way of example, under Income Tax laws, acts committed wilfully with intent to evade or to assist any other person to avoid tax constitute a criminal offense.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is tax fraud treated? Will the tax authority conduct a criminal investigation with a view to seeking prosecution and a custodial sentence?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In most scenarios, fraudulent conduct vis-\u00e0-vis tax laws can constitute a criminal offence which can be prosecuted by the executive police and lead to a custodial sentence. Since 2025, there have been a number of reforms that incentivise out of court administrative settlements, allowing individuals and business facing such charges to regularise their affairs by means of monetary penalties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the tax authority have to abide by any standards or a code of conduct when carrying out audits? Does the tax authority publish any details of how it conducts audits in practice?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The CfTC must act within the powers conferred upon him by law and comply with applicable procedural safeguards. These include statutory confidentiality requirements and conditions governing requests for information and access to business premises, including, <em>inter alia<\/em>, that any person employed with the CfTC is mandated to regard and deal with all documents, information, returns and assessments relating to Maltese income tax law as secret and confidential.<\/p>\n<p>The Ministry for Finance also publishes a Taxpayers\u2019 Charter, which sets out the standards taxpayers can expect in their dealings with the revenue departments. These include fair and impartial treatment, respect for privacy and confidentiality, and the ability to appoint a representative and challenge tax decisions.<\/p>\n<p>The CfTC has not published any details of how it conducts audits in practice.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the tax authority have the power to compel the production of information? Does this extend to emails? Is there a right of appeal against the use of such a power?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the tax authorities have the right to compel the production of various information including electronic information through specific formal mechanisms. If a taxpayer fails to provide the requested information within the applicable term they would be legally barred from exhibiting that information as evidence later in a tribunal or a court of law. Information subject to professional secrecy may not be produced. In general, these powers to compel the production of documents are not appealable <em>per se<\/em>; however, there are remedies available in circumstances where the tax authorities have acted <em>ultra vires<\/em> for instance. Under some tax laws, the presence of a police inspector is enough for inspections in residential habitations, and under other tax laws, search warrants are required.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the tax authority have the power to compel the production of information from third parties? Is there a right of appeal against the use of such a power?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the CfTC possesses broad statutory powers across Maltese tax legislation to compel third parties such as banks, fiduciaries, employers, notaries, and record holders to produce information, accounts, and documentation concerning a taxpayer. There is no direct appeal but there are legal remedies which can be used in exceptional situations which merit judicial review such as when administrative powers are abused and natural law principles are breached.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to settle an audit by way of a binding agreement, i.e. without litigation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A taxpayer may reach an agreement with the CfTC to resolve matters arising from a tax auditwithout the need for litigation. When enquires are carried out by the CfTC, the CfTC and the taxpayer may agree in writing on any adjustments that are required to be made to the taxpayers\u2019 income tax return.<\/p>\n<p>Furthermore, a taxpayer may raise an objection in writing with the CfTC with regards to the amount of their chargeable income and the amount of tax payable as determined by the CfTC pursuant to the issuance of a Tax Statement, wherein a request to review and revise such Tax Statement may be made. Such an objection must be made within 30 days from the date of the service of the notice of the Tax Statement.<\/p>\n<p>Should an agreement be reached with the CfTC, the Tax Statement shall be amended accordingly and notice of the tax payable shall be served upon the taxpayer. If there is no such agreement, the CfTC shall determine the tax by means of an order in writing to the taxpayer.<\/p>\n<p>For VAT, it is possible to accept a provisional VAT assessment without litigation. In this regard, where, a person co-operates with the CfTC, accepts an agreement and within one month from the signing of the agreement pays the amount of tax due, the agreed administrative penalty and the interest due, that person shall be liable to an administrative penalty in an amount equivalent to 10% of the amount of tax due which penalty is reduced from 20%.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If a taxpayer is concerned about how they are being treated, or the speed at which an audit is being conducted, do they have any remedies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>If the matter cannot be resolved internally, a taxpayer may complain to the Parliamentary Ombudsman, subject to the applicable admissibility requirements. The Ombudsman can investigate cases of maladministration, unnecessary delays, unfair treatment, and failure to follow proper procedures.<\/p>\n<p>Complaints are to be generally submitted within 6 months of becoming aware of the matter complained of. The Ombudsman may recommend corrective action, although these recommendations are not legally binding.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If a taxpayer disagrees with a tax assessment, do they have a right of appeal?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, in general there is a right of appeal to the Administrative Review Tribunal. Depending on the nature of the applicable tax laws, some mandate following a notice of objection procedure before formal escalation (such as Income Tax and Excise Duty) whilst others provide a direct escalation line to the Tribunal.<\/p>\n<p>In VAT, you can object to a provisional assessment (within 30 days as aforementioned) and the objection will be reviewed by MTCA before the assessment is finalised and confirmed or amended \/ withdrawn.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the right of appeal to an administrative body (independent or otherwise) or to a judicial body (i.e. a tribunal or court)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The right of appeal is generally to the Administrative Review Tribunal which is presided by a magistrate. The Administrative Review Tribunal is an independent judicial body. A further right of appeal on points of law is also provided to the Court of Appeal sitting in its inferior or superior jurisdiction (depending on quantum) before a judge or judges.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the hearing in public? Is the decision published? What other information about the appeal can be accessed by a third party\/the public?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, hearings are held in public, and decisions are published.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the procedure mainly written or a combination of written and oral?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The procedure before the Administrative Review Tribunal is a combination of written and oral hearings. The statement of claim is written accompanies by the appropriate documentary evidence however the case is conducted orally in an adversarial manner, and oral submissions are also conducted where applicable including during final submissions and any other submissions that might be necessary during the conduct of the case.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a document discovery process?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no standard pre-trial \u201cdiscovery\u201d in the common-law sense between opposing parties however, the law establishes a framework for compelling, presenting and excluding documentary evidence before the tribunal which is empowered to examine evidence, enforce the attendance of witnesses and compel the production of documentary evidence subject to the statutory bar on the preclusion of introducing records which were not exhibited before in the course of an investigation as explained in question 9 above.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are witnesses called to give evidence?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, when and where necessary witnesses can be called to give evidence and can also be subjected to cross examinations. This depends on the parties to the case.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the burden of proof rest with the taxpayer on an appeal against an assessment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The burden of proof to show that a tax assessment is excessive or incorrect lies on the taxpayer based on the general presumption that an assessment made by the CfTC is considered correct. Case law has also provided for the reversal of the burden of proof in situations where assessments are carried out ex officio and\/or where the taxpayer succeeds in setting up an argument in situations of additional tax imposed on the taxpayer, which is found to be equivalent to a criminal penalty and therefore subject to the provision of the rights afforded by Article 6 of the European Convention on Human Rights.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How long does an appeal usually take to conclude?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Every appeal is decided on a case-by-case basis, but the typical timeline of 5 years has improved recently to an average of 3 years. Typically, this is greatly affected by the case complexity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the taxpayer have to pay the assessment pending the outcome of the appeal?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Where an appeal against a Tax Statement issued by the CfTC is submitted, payment of the disputed tax may be held in abeyance. Any tax which is undisputed remains payable.<\/p>\n<p>For VAT, when a valid appeal is lodged, the disputed part of the assessment may be held in abeyance pending the outcome of the appeal. Any amount not in dispute must still be paid for the appeal to be valid.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on who may conduct or appear in the appeal on behalf of the taxpayer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>At first instance parties can appear before the Administrative Review Tribunal in person or can choose to be represented typically by an advocate, legal procurator or other professional representative. A taxpayer must be represented by an advocate in appeals to the Court of Appeal.<\/p>\n<p>Parties can appear before the ART in person or can be represented through an advocate, a legal procurator or another person.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a cost-shifting system whereby the losing party pays the winning party\u2019s legal and professional costs of an appeal?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Court or Tribunal has discretion to give an order on costs. Typically, the losing party bears the legal costs as set out in the relevant taxed bill of costs which is issued strictly in terms of the court tariff. Extra judicial professional fees are not included in this order.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to use alternative forms of dispute resolution, such as voluntary mediation or binding arbitration? Are there any restrictions on when such alternative forms of dispute resolution may be pursued?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Since amendments made to a number of laws in 2025 through the Various Revenue Laws (Amendment) Act it is now possible to enter into out-of-court settlements covering outstanding liabilities with the CfTC or the Director of Social Security which will in turn extinguish criminal liability if the full terms of the settlement are adhered to.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a right of onward appeal? If so, what are the levels of onward appeal before the case reaches the highest appellate court?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, there is a right of further appeal solely on points of law to the Court of Appeal sitting in its Inferior Jurisdiction if the total quantum of tax, additional tax, fines and interest in dispute at the time when the appeal was lodged is less than \u20ac1,165,000. If the quantum exceeds this amount, the appeal is heard by the Court of Appeal sitting in its Superior Jurisdiction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the main penalties that can be applied when additional tax is charged? What are the minimum and maximum penalties?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>An understatement of tax or the submission of an incorrect tax return may give rise to an additional tax, payable alongside any underlying tax shortfall. Unpaid assessed amounts accrue statutory interest, typically at the rate of 0.6% per month, which runs from the relevant tax settlement date. The interest which may be charged as a result of unpaid tax is capped at the amount of the unpaid tax.<\/p>\n<p>Additional tax (a form of tax penalty) applies <em>ex lege<\/em>. Every person who without reasonable excuse, makes an incorrect return by omitting or understating any income of which he is required by the Income Tax Acts to make a return; or gives any incorrect information in relation to any matter or thing affecting his own liability to tax or the liability of any other person or of a partnership shall on conviction be liable to a fine of not less than \u20ac58 and not exceeding \u20ac465, and in addition, to double the amount of tax which has been undercharged in consequence of such incorrect return, or information, or would have been so undercharged if the return or information had been accepted as correct.<\/p>\n<p>If an entity fails to pay the chargeable tax by the settlement date, it may be liable to a fine between \u20ac116 and \u20ac1160, and to a further fine between \u20ac11 and \u20ac116 for every day during which the offence continues.<\/p>\n<p>From a VAT perspective, where additional VAT is found to be due because a VAT return contains an understatement of output tax or an overstatement of deductions, the taxpayer may be liable to an administrative penalty in addition to the underlying VAT.<\/p>\n<p>Under article 37(1) of the VAT Act, the standard administrative penalty is 20% of the total of the understated output tax and the overstated deductions. Where the taxpayer corrects the position before being served with a provisional assessment, the penalty is reduced to 10% of that amount.<\/p>\n<p>In certain cases involving persons making only exempt supplies, a fixed administrative penalty of \u20ac150 may apply.<\/p>\n<p>Furthermore, where the taxpayer co-operates during an investigation, reaches an agreement with the CfTC and settles the tax, penalty and interest within the prescribed time, the administrative penalty may also be reduced to 10% of the tax due.<\/p>\n<p>In addition, statutory interest is chargeable on any unpaid VAT at the rate of 0.6% for every month or part thereof during which the VAT remains unpaid.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If penalties can be mitigated, what factors are taken into account?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Administrative penalties may be reduced or remitted depending on when an omission is corrected and the circumstances giving rise to it. Correcting an income tax return before notification of an enquiry is usually ideal and may attract more favourable treatment, while a reduced penalty also applies where correction follows that notification but precedes notification of an assessment charging the penalty.<\/p>\n<p>The CfTC may also grant partial or full remission where the taxpayer proves, by the relative tax return date, that they relied upon the written advice of a tax professional, and that such omission is connected to such written advice. Alternatively, partial or full remission may be granted where the taxpayer proves that the omission did not arise from fraud, art, contrivance or gross or wilful neglect.<\/p>\n<p>From a VAT perspective, administrative penalties may be mitigated in certain instances.<\/p>\n<p>Where a taxpayer corrects an understatement of output tax or an overstatement of deductions in accordance with article 28(1) of the VAT Act before being served with a provisional assessment for the relevant period, the administrative penalty is reduced from 20% to 10% of the relevant amount.<\/p>\n<p>A reduced administrative penalty may also apply where, during the course of an investigation, the taxpayer co-operates with the CfTC, accepts an agreement and, within one month from the signing of the agreement, pays the tax due, the agreed administrative penalty and the interest due. In such cases, the administrative penalty is 10% of the tax due.<\/p>\n<p>The main factors taken into account therefore include whether the taxpayer corrected the position voluntarily, the timing of the correction, whether the correction was made before the issue of a provisional assessment, whether the taxpayer co-operated with the CfTC, and whether the tax, interest and penalty were settled within the prescribed time.<\/p>\n<p>Furthermore, no administrative penalty is due where the taxpayer proves that there is a reasonable excuse for the default; for the avoidance of doubt, insufficiency of funds to pay the relevant tax due, or reliance on a third party, does not constitute a reasonable excuse. The CfTC may remit in part or in full, the administrative penalty for a default if he is of the view that the default resulted from circumstances that merit mitigation or from a genuine mistake.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Within your jurisdiction, what areas do you think are most likely to be subject to challenge over the next 12 months?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>VAT disputes are expected to remain the most predominant area of tax disputes in Malta over the next 12 months, reflecting their consistent prevalence in recent years.\u00a0 Most cases involve failure to issue fiscal receipts, EPOS\/X-reading discrepancies, late\/omitted returns, and registration lapses, plus frequent input-VAT denials for invalid invoices or poor records. Many matters also turn on procedural validity (provisional vs final estimates, notification\/service defects, appeal form\/timeliness), and a steady stream of criminal prosecutions with mixed outcomes.<\/p>\n<p>Income tax challenges are also expected to continue, particularly concerning capital-accretion, undeclared income projections, and disallowed deductions. Property transfers tax as well as customs \/ excise duty matters are also likely to remain relevant in the tax controversy area over the next 12 months.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In your opinion, are there any areas that taxpayers are currently finding particularly difficult to deal with when faced with a challenge by the tax authorities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Taxpayers face particular difficulties with delays in resolving tax disputes. Protracted proceedings leave taxpayers uncertain about their liabilities for extended periods, increase professional costs and, where disputes remain unpaid, expose them to continuing interest charged.<\/p>\n<p>For VAT, additional issues arise in disputes concerning the tax authorities\u2019 allocation of VAT payments and pending balances, particularly where statutory interest is unduly imposed. Unresolved disputes increase uncertainty of taxpayers regarding their VAT liabilities, and in certain circumstances, adversely affect VAT registration or de-registration status.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4606<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/152248","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=152248"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}