The Commissioner for Revenue has published on its website a clarification on the application of the 15% final reduced tax rate on rental income derived from the letting of residential tenements during 2014 and subsequent years and for the scheme for the regularisation of undeclared rental income from 2005 to 2012.
The clarifications are the following:
(a) If the lease arrangement is made indirectly through a third party, i.e. the immediate tenant is not the individual/s residing in such a tenement, such an arrangement may still qualify for the 15% final tax;
(b) One of the conditions for the applicability of the 15% final tax on rental income is that the tenement should not be licensed under the Malta Travel and Tourism Services Act (MTTSA). However it has now been clarified that this condition should be interpreted to mean that the tenement must not be a commercial tenement but must consist of either a dwelling house occupied as a home or residence by the occupier or a garage. This is irrespective of whether the tenement has an MTTSA license or otherwise.