Court rules BOV must pay €160,200 to customs

The First Hall of the Civil Court presided by Mr. Justice Joseph Zammit McKeon handed a judgement in which he ordered Bank of Valletta to pay the Comptroller of Customs, a total of €160,209 in duties and VAT over furniture and equipment which were transferred from the defunct offshore company Bank of Valletta International (BOVI) to the newly merged Bank of Valletta p.l.c.

BOV had contested the claim by customs to have duty and VAT paid on the furniture and equipment which were purchased under a duty free regime between 1991 and 1995, and later transferred to the locally based Bank of Valletta p.l.c when BOVI ceased to operate as an offshore company.

The Comptroller of Customs had issued an official letter to BOV in 2007, calling on the bank to pay up €160,209 in duties and VAT on the list of objects which included, furniture and computers previously owned by a tax exempt operation, and which were subsequently transferred onto a locally-registered onshore operation.

In its judgement, the Court took note of jurisprudence which obliges any entity or person which purchases any previously tax-exempt asset, to pay duty or VAT.

The Court also noted that through the Instrument of Amalgamation which established the absorbing  of BOVI's operations into Bank of Valletta p.l.c, it was clearly stated that "BOVI delivers its rights, obligations, assets and liabilities to Bank of Valletta p.l.c in accordance with the Companies Act."

This - the Court said - "qualifies a transfer of ownership which imposes an obligation by the amalgamated operation to assume responsibility at law to pay the tax."

In his ruling, Mr. Justice Zammit McKeon said that the Comptroller of Customs was correct to bill Bank of Valletta p.l.c for outstanding duties and VAT on transferred assets belonging to BOVI.