FFF-Legal

Below are highlights of recent devlopments across the EU in the fields of indirect taxation, including referrals of Member States to the ECJ over infringements. For further information, please contact Damien Fiott on This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

1 July 2010

Liquidation of Civil Damages is regulated by Articles 1045 and 1046 of the Maltese Civil Code. These provisions have been attributed different and at times, contrasting, interpretations which lead to different methods of quantification of damages. In some cases, these provisions were also extended to award moral damages which are clearly not envisaged under our law (except in very limited cases only).

Currently, two types of damages are awarded - actual damages, costs and liabilities suffered or incurred (damnum emergens) and loss of future earnings (lucrum cessans). The quantification of loss of future earnings is based on a formula set by the Maltese Courts in the 1967 landmark case of Michael Butler v. Christopher Heard. 47 years on, this formula has also proved problematic and legislative intervention became necessary. Amendments to the Civil Code were proposed by means of Act VI of 2004 but these changes were never brought into force.

A new set of amendments have been proposed and their the aim is to:

• remove uncertainties resulting from multiplie and contrasting interpretations and enabling the Courts to decide cases quicker
• introduce the concept of moral/non-pecuniary damages
• calculate damages in the case of resulting disability by reference to pre-established percentages
• calculate damages due to heirs by reference to their degree of dependency on the deceased
• award compensation for future medical expenses

The amendments also contain proposals as to the capping of certain damages:

• €600,000 for total or partial permanent disability
• €600,000 for future medical treatment

These amendments inlcude a number of subsidiary regulations and are currently undergoing a consultation process. We will be uploading more information about this subject in due course. For more information, please contact Inger Cini or Christian Farrugia.

8 June 2010

Below are highlights of recent devlopments across the EU in the fields of direct and indirect taxation, including referrals of Member States to the ECJ over infringements. For further information, please contact  This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

1 June 2010

The Maltese Inland Revenue Department has published guidelines on the tax treatment of finance leasing of aircraft.  The guidelines apply in respect of aircraft finance leasing arrangements not exceeding 4 years - arrangements of 4 years or more are governed by different rules. 

The purpose of the new guidelines is to clarify the level of chargeable income taxable in the hands of the lessor and the type of deductions that the lessee is entitled to claim.

31 May 2010

The Maltese Inland Revenue Department has published guidelines on the tax treatment of finance leasing of yachts.  The guidelines apply in respect of yacht finance leasing arrangements not exceeding 4 years -arrangements of 4 years or more are governed by different rules. The purpose of these guidelines is to determine the level of income that is taxable in the hands of the lessor and the type of deductions that the lessee is entitled to claim.

20 May 2010

A new rule has been introduced into Maltese VAT legislation imposing a VAT charge on the letting of immovable property for a period of less than thirty days. Prior to this amendment, the letting of property was (with the exception of certain types of letting listed under numbers 1 to 4 below), exempt from VAT.

14 May 2010

Deemed source provision

One of the tax measures introduced by Act 1 of 2010 ( Budget Measures Implementation Act) deals with income derived from the ownership, leasing or operation of aircrafts or aircraft engines used in international aviation business such as transport of passengers or goods. This type of income is deemed to arise outside Malta regardless of the country of registration of the aircraft/engines or whether the aircraft calls at or operates from Malta.

8 May 2010

A number of tax measures that had been annouced in the 2010 Budget have been enacted by means of Act 1 of 2010 (Budget Measures Implementation Act) published on the 16th April 2010. This law contains a number of amendments to the Maltese Income Tax Act and other tax legislation. 

A number of measures contained in the Act are designed to improve Malta’s attractiveness to foreign investors and strengthening Malta’s position as a tax efficient jurisdiction for international business. These include measures aimed at extending the scope of international Tax Refund and Participation Exemption regime, new exemptions and other interesting features.

 19 April 2010

One of the tax measures introduced by Act 1 2010 (Budget Implementation Act) provides for an option to foreigners to be taxed at 15% on income derived from employment in Malta.

The 15% tax rate will be available to foreigners who are employed in target sectors (to be defined). Under normal rules, a foreigner deriving employment income from Malta is taxed at increasing rates up to a maximum of 35%. This new measure will be of particular interest to Maltese and international operators who require to station foreign specialised personnel to Malta.

This entitlement will be subject to a number of conditions that will be prescribed by rules that are expected to be published soon.

For further information please contact Dr Damien Fiott or Dr Antoine Fiott.

1 April 2010

Pension and retirement schemes established in Malta and regulated by the Malta Financial Services Authority (MFSA) may qualify as a Qualifying Recognised Overseas Pension Scheme (QROPS) upon recognition by the UK Revenue and Customs (HMRC). In essence, a QROPS is a pension scheme which is established and regulated outside the UK but which is recognised in the UK for tax purposes. A QROPS provides investment flexibility and with proper planning, tax benefits and tax planning opportunities to individuals who have an accumulated pension in a UK recognised scheme.

We can assist clients who wish to release funds that are tied up in a UK pension as well as assist in inheritance and estate planning. We will put at work our established tax expertise for the purpose of maximising tax benefits available to QROPS investors under Maltese law. 

For further information please visit our Pension Funds/QROPS section .