Submitting your Tax Return

Non-Filers

Many pensioners are considered as non-filers for tax purposes and are not required to submit a tax return. Pensioners will be considered as non-filers when the Office of the Commissioner for Malta Tax and Customs has all the necessary information to assess their taxable income for any particular year. Pensioners only in receipt of Malta State pension who are also non-filers will not be required to declare such income as the Office of the Commissioner for Malta Tax and Customs will already have such information. Taxpayers must however still file a tax return where they are required to submit a self-assessment when they earn other income upon which tax is due.

If you are an employee, and receive a pension in Malta, you are likely to be a non-filer. If you are a pensioner and you work in the same year in which you receive a pension, the MTCA will already have details of your income based on submitted FSS declarations.

In the case of a taxpayer receiving a foreign pension, you would need to submit a tax return. A pensioner who also works on a part-time basis will benefit from reduced rate of 10% withholding taxes. Income received in excess of the part-time thresholds, €10,000 in the case of employment income and €12,000 in the case of self-employment, must be declared in their tax return.

Exempt Pensions

War pensions and certain allowances and benefits payable under the Social Security Act are exempt from income tax. These exempt pensions need not be declared for tax purposes.

Contact the Department of Social Security to see if your pension is exempt from tax.

Article 50A of the Income Tax Act refers to arrears that arise from the Social Security Act. Any arrears received in terms of the Social Security Act are to be charge to tax in the year to which the contributory pensions were earned. In the case of other benefits, tax is to charge to tax in the year the payment was received.

Submission of Returns

Pensioners are subject to the same compliance and reporting obligations as other taxpayers. Pensioners must meet all deadline requirements as applicable to other taxpayers. Taxpayers receiving a pension are required to review their tax status on an annual basis and declare both income from pensions and other income earned.

Pensions and Social Security Benefits are to be declared in Section 3 of page 2 of the tax return. In this section, you are to include both local and foreign gross pension income and certain social security benefits received. For each source of pension income, you are required to include the PE number (or any other reference number you may have) and attach an FS3 or similar statement to page 3 of your tax return.

Taxpayers who have already paid their taxes in relation to these categories should not declare these sources in the tax return:

1. Rental income already paid by a TA 24 (15% final withholding tax) – submissions of TA24 for individuals are to be made through myTax,
2. Bank interest already taxed at source (15% final withholding tax),
3. Part-time employment income that the employer has already deducted the 10% tax amount (€10,000 maximum income amount at 10%),*
4. Part-time self-employment if the 10% tax has already been paid by a TA22 (€12,000 maximum income amount at 10%).*
   

*any income above the prescribed amount in case of part-time employment and part-time self-employment should be declared in the tax return.

However, remember that any income is taxable under the Income Tax Act and when in doubt please call at our offices.

Married taxpayers will receive one tax return and they can opt to either use a joint computation or a separate tax computation. In the case of a joint computation, the total income earned by both spouses is declared jointly and the married tax bracket will apply to calculate any tax due. Pensioners who opt for a separate computation, whilst still submitting one tax return, must consider the source of their income and ensure that it is allocated to that income earning spouse. Pensions received for past employment must be allocated to the spouse who had been in that employment. All other income must be declared on page 3 of the tax return, Investments, Capital gains and other Income and is chargeable in the hands of the spouse with the higher total emolument or the responsible spouse, as elected. Private pensions must also be declared on page 3 of the tax return. Taxpayers may also request a separate return wherein each spouse would be required to declare their taxable income separately. 

Payments Tax Compliance Obligations and Responsibilities

Pensioners are subject to the same compliance and reporting obligations as other taxpayers. Pensioners must meet all deadline requirements as applicable to other taxpayers. Taxpayers receiving a pension are required to review their tax status on an annual basis and declare both income from pensions and other income earned in the annual tax return. If a tax return is issued, it must be filled and submitted by the prescribed deadline, irrespective of the sources of income received. Even if you think you do not need to fill a tax return, check with our offices to confirm your responsibilities and obligations to ensure that you do not incur a fine for not filing a tax return within the prescribed period.

Bank Payments

Payments for any taxes due may be made online by accessing My Account. Where taxpayers choose to submit the form manually, cash or cheque payments can be made at any Malta Post branch. All payments are to be accompanied by a statement indicating taxes due. The lower part of the tax statement and the lower part of page 4 in the tax return can be removed and used to make the payment. Pensioners may also seek assistance from servizz.gov should they have any queries regarding payments due. Late payments will not be accepted by Malta Post.

Bank Details and Tax Refunds

Taxpayers should ensure that the correct bank details have been provided to the Commissioner for Malta Tax and Customs. Providing bank details to the Commissioner of Malta Tax and Customs will facilitate the direct payment of any tax refunds owed to taxpayers. It is the responsibility of all taxpayers to provide the Commissioner of Malta Tax and Customs with details of their bank account in which they wish any payment to be made. Bank details can be provided online using the My Account facility found on cfr.gov.mt website. Taxpayers who are unable to access their My Account can request assistance from officials of servizz.gov. by going personally to any regional office. When visiting the offices of the serivzz.gov please bring with you your bank details, including bank account number, branch details and IBAN number, a valid ID card will also be required to update your bank details. Click on the following link to find the closest regional hub, as well as office hours and google map location of your nearest servizz.gov office. 

Checking your Tax Balance  

Pensioners should confirm that they have no pending tax returns or balances with the Commissioner for Malta Tax and Customs before submitting their return. This is particularly important in the first year when they cease to be gainfully employed, if they opt to no longer work upon retirement. Taxpayers may access My Account to check their current tax balances and also make any online payment, should this be necessary.

Late Payment and Penalties

Pensioners are subject to late payment and penalties at the standard rates of tax if they fail to submit a tax return when it is required by the Commissioner or if they fail to pay their taxes due or make a late payment. Refunds which cannot be processed by the Commissioner of Malta Tax and Customs due to lack of banking details may possibly not be processed in time. It is therefore in the interest of all pensioners to ensure that the correct bank details are provided to the Commissioner.