| 21/8/2008 |
Bil-Malti
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| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 65 |
Decided on 1 August 1966 |
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Double Taxation Relief. Administrative Arrangements Which One Of The Treaty Partners Requires To Grant Relief / Exemptions Do Not Bind The Other
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The taxpayer asked the Commissioner of Inland Revenue to certify a form which the U.K. Inland Revenue required to grant him exemption on certain royalty income. The Commissioner refused as his own requirements were not satisfied. Taxpayer sought redress and damages in the Courts. The Courts refused his claims.
The Commissioner is not legally bound either by the arrangement which forms part of the Double Taxation Relief Agreement with the United Kingdom, or by any other law, to issue the certificate as demanded by the appellant in connection with his claim for exemption from the U.K. tax on royalties remitted to Malta. The appellant could in no way lay any responsibility on the Commissioner for any inconvenience or hardship allegedly suffered by him as there was no failure whatsoever in any duty or obligation on the part of the Commissioner, who had actually done his best to help.
The administrative arrangements which one of the treaty partners institutes to give effect to the treaty in its own territory do not bind the other party unless specifically so agreed in the treaty. Case referred to royalties which were exempt in U.K. if subject to tax in Malta. As the taxpayer was not domiciled in Malta, he was only taxable on a remittance basis. The Commissioner of Inland Revenue refused to release a certificate required by the U.K. authorities confirming taxpayer's residence in Malta and the amount of the taxable royalty. This could only be done when, in the relative year of assessment, a return would have been filed by the taxpayer. The income which was chargeable to tax in the taxpayer's hands for any year of assessment was the income accrued or derived in the preceding or basis year in so far as it was remitted to Malta. The Court also agreed with the Commissioner that, in any case, no part of the UK/DTA required the local authorities to issue certificates, while the Exchange of Information Article in the treaty could not be given such an extended meaning.
This was not an appeal from the Board of Special Commissioners (Income Tax), but from a decision delivered by the Civil Court, First Hall, to which appellant had had recourse
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