It is a fundamental principle of tax legislation that persons aggrieved by a decision of a competent tax authority should be granted a right to challenge that decision before an appropriate judicial forum. In the Malta VAT Act that right is set out in Articles 43 to 47:
- Article 43 provides for appeals against VAT assessments
- Article 44 provides for any question that may be referred other than VAT assessments
- Article 45 stipulates that the Administrative Review Tribunal (“Tribunal”) shall be competent to hear and determine appeals under Articles 43 and 44
- Article 46 refers to the Ninth Schedule as regards the procedures to appeal
- Article 47 provides for a right of appeal (only on a “point of law”) to the Court of Appeal against decisions of the Tribunal
Whilst it is not the scope of this write-up to explain in too much detail the mechanisms and procedures of lodging an appeal or referring a question to the Tribunal, it is of utmost importance to point out the most common mistakes or omissions that would render an appeal invalid or unsuccessful.
Based on our experience of following up on the published decisions of the Tribunal and the Court of Appeal, we are in a sound position to note that the most common factor that renders appeals against assessments invalid is the infringement of the time window allowed for lodging an appeal, which is 30 days from the notification of the assessments. The second most common factor is being blocked from producing documentation in support of the case on the strength of Article 48(5) of the VAT Act which provides that where a person does not produce the documentation when requested by the Commissioner within 30 days from when notified or without a reasonable excuse, that documentation shall not be produced as evidence at any later stage. Whilst this per se does not render an appeal invalid it would nevertheless seriously jeopardise the defence particularly when the appeal procedure requires that the onus of proof lies with the person making the appeal and not with the Commissioner. Another error is the lodging of an appeal to the Court of Appeal against a decision of the Tribunal not strictly on a “point of law”.
Whilst optimal compliance and strict adherence to the VAT rules should in principle not lead to the issuing of assessments or other administrative sanctions, yet if that situation materialises and an appeal is being considered, then it is strongly recommended that professional assistance is sought.
Our competent VAT Team and in-house lawyer at Zampa Debattista would be at your disposal to assist should you wish to discuss.
Contact: Matthew Zampa at firstname.lastname@example.org or Brandon Gatt at email@example.com.