Recently a new exemption from income tax has been added to list of exemptions. The new exemption was introduced by means of Act XXXVII of 2014 which amended the Income Tax Act Cap. 123, whereby a new section was introduced in Article 12, namely Article 12(1)(x).
The new exemption from income tax seeks to exempt interest received by an individual from:
1. A person carrying on the business of banking in accordance with the laws of any EU Member State in respect of a sum of money deposited into a special individual saving account as recognized by the Commissioner; and
2. A Government of an EU Member State, any of its agencies or a corporation or authority established by law, or in respect of a public issue by a company, entity or other legal person, where the interest bearing securities are credited for the benefit of an individual to a special individual saving account recognized by the Commissioner.
By means of LN 469 of 2014, the Maltese tax authorities have published new rules to define what an Individual Savings Account (ISA) is and to establish new compliance requirements for payors of investment income.