The Maltese system is based on the self-assessment principle. As from the year of assessment 1999 onwards, the taxpayer is also obliged to include in his tax return a self-assessment showing computations of the tax payable for that relevant year of assessment.

Tax Assessments

The Commissioner is empowered to issue an assessment if he determines that a lesser amount was charged than that which should have been properly charged. The assessment is only issued after an examination of further returns and books of accounts and other evidence has been made.

An assessment may be made not later than five years from the end of the year in which a return, or further returns are required to be furnished. However, where the taxpayer has furnished an incomplete tax return or has submitted a return with the intent of avoiding tax, an assessment may be made at any time after the date on which the return is due. Note, however, that the right of the Commissioner to sue for tax that should have been due has been challenged successfully. In the relevant case, the defendant contested the indefinite prescriptive time allowed for the Commissioner to sue for tax that was due from previous assessments. It was confirmed that the action to be taken by the Commissioner may only be enforced up to 8 years from the date the assessment becomes final and conclusive.

Tax Statements

Following the filing of a tax return and self-assessment, the Commissioner proceeds to determine the tax due in accordance with the information submitted. The determination is made by the issuance of a tax statement that usually reflects the self-assessment previously filed. The tax statement will then constitute and executive act under law which creates a debt obligation in terms of law due to the Commissioner by the taxpayer.

Where a taxpayer has not filed a return for any reason, the Commissioner may proceed to determine the amount of tax due and issue an estimated tax statement accordingly. In such instances, the Commissioner may decide to issue an assessment without the requirement to notify the taxpayer that an enquiry is being conducted into any previous tax declarations. Before an assessment is formally issued, the taxpayer may make corrections to the tax return by furnishing an adjustment form, provided that such a correction may not be filed later than five years from the expiration of the relevant year of assessment.

Finality of Tax Statements

In accordance with law an assessment becomes final and conclusive in the following circumstances:

Where no objection or appeal has been lodged within the time frame prescribed above by the tax authorities;
Where the amount of tax has been agreed upon;
Where an appeal has been withdrawn or discontinued; or
Where the amount of tax payable has been determined or agreed on appeal in a court of law.

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