EURO CHANGE-OVER IN MALTA

Legal Framework 

 

By virtue of Council Decision of 10 July 2007 in accordance with Article 122(2) of the Treaty on the adoption by Malta of the single currency on 1 January 2008 (2007/504/EC), it was established that Malta fulfils the necessary conditions for the adoption of the single currency and that it would adopt the euro as its official currency with effect from 1 January 2008. 

 

Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro (including Council Regulation (EC) No 836/2007 of 10 July 2007 amending Regulation (EC) No 974/98 as regards the introduction of the euro in Malta) and Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro, are directly applicable in Malta. 

 

The Euro Adoption Act (Chapter 485 of the Laws of Malta) gives enabling powers to the Minister for Finance to make subsidiary legislation (regulations) in order to facilitate the adoption of the euro and generally for the purpose of carrying into operation any of the provisions of the said Act and of the EC Treaty and the Protocol on the Statute of the European System of Central Banks and of 

the European Central Bank annexed to the Treaty in respect of the adoption of the euro. To date, the following subsidiary legislation was issued on the basis of the Euro Adoption Act: 

 

The Deductions (Euro Related Expenditure) Rules (Legal Notice 93 of 2007) were published under the Income Tax Act (Chapter 123 of the Laws of Malta), permitting businesses to claim a 200% tax deduction (up to a Lm1,000 / Euro 2,329.37 threshold) against their euro changeover costs related to the enhancement or replacement of electronic equipment which store monetary values. 

 

Timing and parallel circulation 

 

Malta will adopt the euro as its official currency on the 1st of January 2008; this is also the cash change over date and there will be no phasing out period. From the 1st of January 2008 until 31st January 2008, payments can be made in euro or Maltese Lira, but change is to be provided in euro. Cheques are only accepted in euro. All bank accounts and investments will be converted to euro on Euro-day. 

 

Credit institutions will exchange Lm notes and coins until the end of March 2008. However, it will be possible to exchange any remaining Lm coins and notes at the Central Bank of Malta until 1 February 2010 for coins and 31 January 2018 for notes. 

 

The mandatory dual display period commenced on in July 2007 and will end on 30th June 2008 (unless otherwise prescribed). Any person accepting payment in euro both during the voluntary dual display period as well as during the mandatory dual display period, must apply the fixed conversion rate (0.4293 Maltese lira to the euro) without the addition of any charges whatsoever. Any person, accepting euro notes as a deposit for, or into, an account of any type which is denominated in euro shall do so without the addition of any charges.