The deadline for the submission of a revised provisional tax calculation for 2023 (if needed) and the payment for the second provisional tax instalment for 2023 is at 31 December 2023.
Taxpayers are reminded that the 2023 temporary tax assessment may be revised by any time before the deadline of 31 December 2023.
Provisional tax payment obligation
The following persons should re-consider whether they should submit a provisional/temporary tax calculation and pay provisional tax:
- Individuals with taxable income other than salaries, pensions, dividends, and interest, and
- Companies with taxable income.
It worth’s to mention that in case the tax payer does not expect to have any taxable income for the year 2023, there is no requirement to pay provisional tax.
Deadline for the second provisional tax instalment
A taxpayer can pay the second provisional tax instalment (as per the initial provisional tax calculation), within one month from the payment deadline (i.e. until 31 January 2024) without interest or penalties. In case a taxpayer revises its provisional tax calculation, any outstanding provisional tax will need to be settled until 31 December 2023.
Method of payment
The timely payment of the second provisional tax instalment can be made via JCC Smart or online banking, by using the unique Payment Reference Number (PRN) made available by the Tax Portal of the Tax Department (TD). Such PRN should be automatically created following the payment of the first provisional tax instalment. The payment of delayed tax instalments can be made only via online banking.
If the estimated taxable income is revised upwards, interest at 1.75% per annum is payable on the difference between the revised amount payable and the amount initially declared from the due date of payment of the first instalment plus a 5% penalty on the tax due. An additional penalty of 5% may be imposed by the TD, if the tax remains unpaid two months after the above due date.
Option to revise provisional tax calculation and payment of remaining provisional tax due
In case of a downwards revision of the provisional taxable income declared, forms T.D.5 (Individuals) and T.D.6 (Companies) should be sent to the local District Tax Collection Offices via e-mail. Any outstanding provisional tax can be settled until 31 January 2024 without interest or penalties.
In case of an upward revision of the provisional taxable income declared, the additional amount of the first provisional tax instalment will need to be settled until 31 December 2023 with interest at 1,75% per annum applicable on late payments and imposed for each complete month of delay. The amount of the second provisional tax instalment can be settled until 31 January 2024 without interest or penalties.
In case the provisional taxable income declared is less than 75% of the final taxable income for the year, an additional tax is imposed, equal to 10% of the difference between the final tax due and the provisional tax paid.
Imposition of 10% additional tax if final tax is underestimated
It is important to note that as per Circular 54, for employees and pensioners whose emoluments are higher than their other income and they have paid the tax which relates to at least 75% of the total income through withholding by the employer (under the PAYE system), the additional tax of 10% is not imposed.
We remain at your disposal for any further clarifications may be needed.