| 4/2/2012 |
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| Board of Special Commissioners - Cases |
| Case No. 9/50 |
Decided: 18 September, 1950 |
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Expenses in respect of a post-graduate course not deductible - article 10(1), now article 14(1), Income Tax Act; Definition of scientific research - article 10(1)(i), now article 14(1)(h), ITA; Interpretation of fiscal law
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Appellant, a medical practitioner, had not been allowed a deduction for the post-graduate course expenses he had to pay. He claimed that such an expense was included in the deduction for scientific research and specifically allowed by article 10(1)(i), by the general provision of article 10(1) and by article 8(1)(j) as a scholarship.
In respect of scientific research under 10(1)(i), the Board noted that the Income Tax Act did not define scientific research. In accordance with article 2(2) the Board relied on the UK definition and considered the definition found in article 31 of the Finance Act. It quoted authoritative British writers who all agreed that the cost of acquisition of professional qualifications was not allowable as a deduction. Appellant could have qualified for a deduction had he proved that the sum was expended in performing medical experiments.
Regarding the general provision of article 10(1) the Board held that appellant failed on two counts: (1) the expense had not been expended during the year preceding the year of assessment (appellant had left Malta in November of the relevant year so the whole sum could not have been wholly expended during that year); (2) the expense had not been wholly and exclusively incurred in the production of the income.
The Board also rejected appellant's claim to consider the expense under article 8(1)(j). Finally the Board noted that the interpretation of fiscal law had to be narrow rather than wide in order to protect the common good.
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