| 4/2/2012 |
HOME
FSS
Downloads
|
| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 26 |
Decided on 26 November 1959 |
   |
|
Taxation Of Clubs. Income Of Clubs Deemed Or Not Deemed To Carry On A Business
|
The charging section of the I.T.A. contains provisions as to when a club is to be deemed to carry on a business. The Court held that when a club is not to be so deemed, this did not grant exemption: after all the arrangements are in the charging section, not amongst the exemptions. Income from members (such as subscriptions), remains non-taxable, but income from third parties such as interest and rent remain taxable. Assimilated with exempt income from members in non-business cases, would be income from outsiders in club activities.
If the club is deemed to carry on a business, everything of a revenue nature goes into one pot and the balance is subject to tax. If, however, the club would have been taxed at a higher amount if it were not deemed to carry on a business, the assessment would be raised accordingly.
This case was decided at the time when the law still charged the net annual value of property used by the owner for the purpose of residence or enjoyment. The Court held that clubs were again not entitled to any exemption in this particular respect and the club was to be taxed accordingly.
Note: Although this is a leading Commonwealth case on clubs where the law, like that of Malta, is based on the Model Income Tax Ordinance, most clubs are today given exemption by the law itself.
BSC Case No: 25/58
|
|
|
|
|