 | Published Date: 14 Jan 2009
FAQ No: 0028
FS7 & FS3 Submission for 2008
The end of year reconciliation information (FS7 & FS3s) for basis year 2008, is due for filing by not later than 15 February 2009. Late submissions are subject to the penalties contemplated by the FSS Rules.
The Inland Revenue Department is continuing the initiative whereby it identifies taxpayers who are not required to file their annual income tax return. This scheme affects positively those taxpayers who derive their income from employment. The success of this initiative is fully dependent upon employers’ compliance both as to timely filing and correctness of the end of year documentation. Compliance will benefit your own employees who will avoid the inconvenience of filling and filing their income tax return.
Employers, who have enrolled to use the on-line services, are encouraged to use the service regularly to ensure that there are no access problems prior to the actual submission. On-line users, have to apply for an Electronic ID (e-ID) The e-ID enables efficient and secure access to various services provided by the Public Service. One can register for an e-ID at the Identity Management Office, (e-ID Section), Evans Buildings, Merchants Street, Valletta or at the Passports Office, Ministry for Gozo, St Francis Square Victoria. Make sure that you take with you your ID card, as only ID Card holders may possess an e-ID. The e-ID username and password are sent to you by e-mail and the PIN activation code (similar to the one used for using a bank’s ATM) is sent by normal mail. When the PIN is sent by post the user needs to activate the account but instructions on how to do this are sent with the PIN. Once the e-ID has been activated the user may download his/her digital certificate. Further information regarding the e-ID registration and Activation may be obtained Online from http://www.mygov.mt.
The Department had introduced a spreadsheet to facilitate the submission process for employers. Through this facility an employer can validate his data and correct any errors on his desktop. This spreadsheet and related further information may be downloaded from: http://www.ird.gov.mt/services/fss/fssOn-line.asp
In case of difficulties to access the On-line services (login, passwords, digital certificates etc...); an e-mail, specifying the problems and any related error messages may be sent, to ird.services@gov.mt .
Data Validation
It is important to include all FS3s of each PE number in a single submission, as every submission overwrites the previous information for the PE number and year. Employers who have two sets of information for the same PE number should merge the files using the spreadsheet indicated above. Furthermore, company directors in receipt of a salary or fee, should include their FS3 with the rest of the data being submitted.
Personal and accounting data must be filled correctly and all required fields should be completed. Particular attention should be given to the Social Security Contribution (SSC) information where the basic wage and the number of weeks worked together with the contribution paid by both the employer and employee must be completed. The contribution paid must relate to the rate of the applicable category that is derived from the basic wage and age of the employee. More information on the calculation of Social Security Contributions and an on-line calculator are available at the Inland Revenue website at www.ird.gov.mt.
All information submitted shall be verified according to the electronic lodgment specifications as stipulated by the Department. While an acknowledgement will be issued to employers who file correct data, incorrect or incomplete information will generate an On-line report that can be viewed by the employer. Unless data will be resubmitted correctly in the stipulated time, the employer will be considered as a defaulter and penalties as contemplated by the FSS Rules shall be applied. Employers who need support in resolving submission errors are to send an e-Mail to noel.a.agius@gov.mt or glenn.a.dimech@gov.mt quoting the related error messages. If the error is directly linked to the employees’ ID number, then the correspondence should be referred to amanda.buttigieg@gov.mt
Some important validations to remember:
- Whenever a female employee notifies the employer in changes of her civil status (e.g. : marriage, separation etc…..), two FS3s must be compiled for the same year, with the data split accordingly. The FS3 of a married female (prior to separation, prior to husband’s death or after marriage), should have her spouse’s ID reported in the allocated field.
Example: In the case of a women marrying in September, two FS3s should be prepared to cover the periods:
1. from January to September as a single person (with spouse ID left blank), and
2. from October to December as a married person (with spouse ID quoted in the allocated field).
- The Department will not accept duplicate FS3s pertaining to the same individual under a particular PE number for the same year (except cases explained above). That is one line for each employee in the ‘F3’ file. However, whenever the basic weekly wage or category change, these must all be reported in separate lines in the ‘SS’ file.
- Whenever part time emoluments exceed the € 7000 threshold, the surplus amount should be reported in the same FS3 as main emoluments. The relative 15% withholding tax must be split just the same (maximum of € 1050) part time tax).
The whole list of all the validations is available on the Department’s website.
Employees who satisfy the conditions stipulated in article 56(17) of the Income Tax Act may opt to have their income from overseas employment taxed at a flat rate of 15%. However, notwithstanding the 15% flat rate, such emoluments should be reported on the FS3 as main employment and not as part-time.
Payments due
Every FSS Tax and Social Security Contribution payment effected by an employer should be supported by the prescribed FS5 form. An FS5 is also to be submitted where the payment is in discrepancy resulting from the yearly reconciliation data.
Cheques supported by FS5 forms should be sent to the Cash Office Block 5, whilst all FS7 and FS3
documentation should be sent directly to the FSS Section Block 1.
Income derived from part time employment
As from 1 January 2005, there was a major change in the part time rules (Legal Notice 105/2005). This change affects those married persons, where one of the spouses has a full time employment income, and the other is employed on a part time basis. In order for part time employees to benefit from the new rules, the 15% withholding tax should be deducted from the total yearly emoluments. These payments should reach the Department through the employer by the end of January 2009 (attached to the December 2008 monthly remittance). If the employer fails to effect the payment, the employee is still eligible for this benefit by paying personally the 15% withholding tax by not later than the 15 February 2009 using the prescribed form TA23.
Share Options (LN 147/07):- As from basis year 2006
When an employee exercises the option to acquire shares in the company in which he/she is employed the taxable value of the fringe benefit is calculated at 42.85% of the excess, if any, of the market value of the shares on the date of the exercise of the option over the option price of the same shares.
Childcare Facilities (Rule 39 (2) (r) of the Fringe Benefits Rules)
Employers will be asked to indicate on Form FS7 whether they have paid or reimbursed the cost of childcare facilities for the benefit of their employees. If a ‘yes’ is indicated, the aggregate amount paid or reimbursed by the employer and the total number of employees enjoying the benefit have to be indicated.
The payment or reimbursement of the cost of childcare facilities for the benefit of the employees is not considered as fringe benefits so long as the employees receiving the benefit do not claim a deduction against their income. If an employee elects to claim the deduction for childcare services under Article 14C of the Income Tax Act, then the payment or reimbursement by the employer constitutes a taxable fringe benefit and must be reported on form FS3.
Deregistration of PE number
Whenever an employer has ceased to employ individuals, the proper Deactivation Form should be completed. If
employments were terminated within a particular year, the end of year data for that year should still be submitted. Failing to submit the Deactivation Form will hold employers liable to continue submitting FSS documentation.
Category: |
End of Year |
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