ACT No. XI of 1997 AN ACT to amend the Industrial Development Act, Cap. 325.

I assent.

(L.S.)

Ugo MIFSUD BONNICI

President

10th June, 1997

ACT No. XI of 1997

AN ACT to amend the Industrial Development Act, Cap. 325.

BE IT ENACTED by the President, by and with the advice and

consent of the House of Representatives, in this present Parliament

assembled, and by the authority of the same, as follows:-

(1) This Act may be cited as the Industrial Development Short title

(Amendment) Act, 1997,·and shall be read and construed as one with ~~~mencement.

the Industrial Development Act, hereinafter referred to as "the principal C.p.325.

Acf'.

(2) This Act shall come into force on such date as the

Minister responsible for Industry may by notice in the Gazette establish

and different dates may be so established for different provisions or

different purposes thereof.

Section 2 of the principal Act shall be amended as follows

Amendment of

section 2

of the

(i) for the definition of "company" there shall be substituted

principal Act.

the following new definition

" "company" means

(a) any partnership constituted under the

Commercial Partnerships Ordinance or tIle Companies

xxv

Act

Act, 1995, being a partnership en nom collectif, en

ofI99S.

commandite or a limited liability company;

(b) any body of persons constituted, incorporated

or registereii outside Malta, and of a nature similar to

the aforesaid partnerships;

(c) any co-operative society duly registered as such

under the appropriate law for the time being in force in

Maita;";

(ii) in the proviso to paragraph (b) of the definition of "export

sales" for the words "together with a copy authenticated by him of

the relative export documents" there shall be substituted the words

"together'with an undertaking that the Corporation may examine

the relative export documents", and for the words "such declaration

and docurnepts" there shall be substituted the words "such

declaration and undertaking";

(iii) for paragraph (c) of the definition of "export sales" there

slial! be substituted the following new paragraph

"(c) the value of services rendered or performed

by a qualifying company which are exported by the same

company and in the case of a company qualifying in

terms of paragraph (e) of subsection (I) of section 3 of

this Act the value of services rendered or performed for

another qualifying company which satisfies the

provisions of paragraph (b) of subsection (1) of section

4 of this Act;" ;

(iv) immediately after the definition of "export sales" there

shaltbe added the following new definition

.. "hotel" means a hotel licensed as sucp under the Hotels

and Catering Establishments Act; or a building in the course

of construction which is intended to be. so licensed upon

completion;"; and

(v) in the definition of "Maltese company" ,immediately after

the words "Maltese citizens" there shall be, added the words

", directly or indirectly,".

Section 3 of the principal Act shall be amended as follows

Ca) in subsection (1) thereof, the words "of section 24" shall

be substiMed by.the wordS·"ofsection 24, section 24A and section

(b) in. paragraph (b) thereof, imme4iately after the words

"machinery or equipment" tilere shall be a.dded the following words

"and the recycling or treatment of waste material";

(c) for paragraph (e}of subsection (1) thereof there shall be

substitnted the following paragraph

"(e) the rendering of a service by a company to non-

resident persons or to a company which satisfies the provisions

of paragraph (b) of subsection (1) of section 4 of this Act,

whether the service is performed or renderedjn Malta orfrom

Malta, provided such service is prescribed by the Minister to

be a qualifying export service; or"; and

(d) immediately after the proviso to subsection (8) thereof,

there shall be added tile following new provisos

"Provided further that notwithstanding any other

provision of this Act in respect of qualifying companies

incorporated outside Malta, the incentives and benefits

contemplated by this Act may only be obtained by qualifying

companies registered as an oversea company in accordance

with the Companies Act, 1995 in respect of their activities

happening on or after 1st January, 1997;

Provided further that the incentives and benefits

contemplated by subsection (1) of section 6, subsection (7)

ofsection 8, section 9, section 15 and section 24B of this Act

may only be obtained by a company constitnted under Maltese

Law.".

Immediately after section 3 of the principalAct, tilere shall be Addition of new

added the following new section

se.ction 3A to the

pnnclpal Act.

;lA. (1) Where by means of an extraordinary resolution

it is decided to· transfer the trade or business of a company

constituted under Maltese Law, hereinafter referred to' as·the

first company, to a company which is registered as an oversea

company in terms of the Companies Act, 1995, hereinafter

referred to as the second company, and the Corporation is

satisfied that tile ultimate beneficial shareholders of the said

companies are tile same and are not resident in Malta,

(i) all rights and obligations of the first company

arising from tile provisions of this Act shall be deemed

to be the rights and obligations of tile second company

as if such rights and obligations had always appertained

to the second company;

(ii) the second company shall be entitled to the

incentives and benefits contemplated by this Act to the

same extent as the first company would have been

entitled had the transfer of business not taken place and

this irrespective of whether the first company was

dissolved.

(2) The provisions of subsection (1) of this section shall

apply, mutatis mutandis, where a company registered as an

oversea company in terms of the Companies Act, 1995

transfers its business to a company constituted under Maltese

Law and in subsection (1) of this section "the first company"

shall mean a company registered as an oversea company in

terms of the Companies Act, 1995 and "the second company"

shall mean a company constituted under Maltese Law.

(3) For the purposes of this section a trade or business

shall be deemed to have been transferred when'

(i) all the tangible assets of the first company are

transferred to the second company; which company uses

the said assets in carrying on the same kind of trade or

business as that carried on by the first company; and

(ii) the cuStomers of the second. company are

substantially the same as that of the first company.

(4) On being satisfied that the provisions of this section

have been complied with, the Corporation may issue a

certifiCate to that effect, which certificate ,shall ,constitute

sufficient evidence for the purpose ofrhe'application of this

section." .

For paragraph (a) of subsection (1) of section 4 of the principal

Act there shall be substituted the following

"(a) is a company which

(i) is constituted under Maltese Law on or after 1st June,

1987; or

(ii) is a company incorporated outside Malta and has

been registered as an oversea company in terms of the

Companies Act, 1995 registered on or after 1 st June, 1987 but

only in respect of its activities happening on or after 1st

January, 1997; and".

Section 5 of the principal Act shall be amended as follows

Amendment of

section 5 of the

.

principal Act.

(a) in subsection (1) thereof, the words "up to and including

the year of assessment 200 1" shall be deleted;

(b) in subsection (2) thereof, immediately after the words

=

" "Z" total sales in year of assessment" there shall be added the

following new paragraph

''For the purposes of this section where a qualifying

company has changed the date on which its accounting period

ends for the purposes of section 11 of the Income Tax Act

and the profits of such. accounting period fall to be charged to

tax

(a) in any year of assessment comprised in a base

period; or

(b) in any year of assessment in respect of which

the company claims the benefit contemplated by this

section or section 5A of this Act,

where the number of days'comprised in the said accounting

period is more or less than three hundred and sixty five days,

the value of the total sales, export sales and profits of such

accounting period shall be decreased or increased, as the case

may be, by multiplying the actual value of the said total sales,

export sales and profits by the proportion which three hundred

and sixty five days bears to the actual number of days

comprised in the said accounting period.";

(c) in paragraph (d) of subsection (3) thereof, immediately

after the words "was not in existence" there shall be added the

words", or in the case of a qualifying company incorporated outside

Malta, such company was not registered as an oversea company

in accordance with the Companies Act, 1995,";

(d) in subsection (4) thereof, immediately after the table

shOwing the applicable .base periods there shall be added the

following new proviso

"Provided that the base period for year of assessment 2002

and subsequent years of assessment shall be determined by

Increasing the years comprised in the base period for the preceding

year of aSSeSsment by one year."; and

(e) for the proviso to subsection (5) thereof, there shall be

substituted the folloWing new proviso

"Provided that a qualifying comp.any may benefit from the

provisions of this section fornot more than ten years of assessment,

which years need not be consecutive.".

Immediately after section 5 of the princ.i:>"ll> ~t, there shall be

added the following new section

5A. (1) Where a qualifying company incurs

expenditure in acquiring qualifying assets and the aggregate

expenditure of the company on such assets during any relevant

year and in the preceding six accounting periods

(a) is equivalent to or exceeds a percentage (in

this subsection referred to as "the qualifying percentage")

of the company's total. sales dnring the same period, the

income derived by such company, from its trade or

bnsiness, during the relevant year as is proportionately

attributable to its increased export sales as determined

in terms of subsection (2) of this section.shall be taxed

at a reduced rate of income tax as is determined by

reference to the qualifying percentage as follows

Qualifying percentage

Applicable rale of

reduced income tax

%

%

75

0.0

Izda s-sitt perjodi ta' kontjar ta' qabel is-sena

rilevanti ghandhom ikunu perjodi ta' kontjar Ii I-profitti

taghhom isiru suggetti gliall-hlas tat-taxxa fuq I-income

fis-sena ta' stima 1998 jew fis-snin ta' stima ta' wara

u, fejn il-ghadd ta' dawn iI-perjodi la' kontjar Ii jigu

qabeJ is-sena rilevanti ikun anqas minn sitta, il-

persentagg kwalifikanti msemmi aktar qabel f'dan il-

paragrafu ghandu jigi stabbilit ghall-perjodu ta' iInien

Ii jibda mill-ewwel gurnata tal-perjodu ta' kontjar Ii 1-

profitti tieghu jsiru suggetti ghall"hlas tat-taxxa fuq 1-

income fis-sena ta' stima 1998 u Ii jintemm fl-ahhar

jum tas-sena rilevanti

Jida wkoll fkaz Ji kumpannija rna kinetx tezisti

matul is-sitt snin koliha Ii jigu qabel is-sena rilevanti, il-

persentagg kwalifikanti msemmi f dan is-subartikolu

ghandu jigi stabbilit ghal perjodu Ii matulu tkun ezistiet

il-kumpannija;.

jew

(b) tkun ugwali ghal jew tkun aktar minn

LM7,000,000, I-income Ii tikscb tali kumpannija mill-

kummerc jew negozju taghha matul is-sena rilevanti Ii

jkun proporzjonalment attribwibbli gbai-zieda fil-bejgli

esportat taghha kif stabbilit skond is-subartikolu (2) ta'

dan l-artikolu ghandu jkun mehIus mit-taxxa fuq 1-

income

Izdajekk

(i) l-gliadd ta' granet kompriii fil-perjodu

ta' zmien Ii jibda mill-ewwel jum tal-perjodu ta'

kontjaril-profitti ta' liemajsiru suggetti ghall-hlas

tat-taxxa fuq I-income fis-sena ta' stima 1998 u Ii

jintcmm fl-ahhar jum tas-sena rilevanti, ikun ta'

anqas minn elfejn hames mija u hamsa u liamsin;

jew

(ii) I-gliadd ta' granet komprizi fis-sena

rilevanti u fis-sitt perjodi ta' kuntjar ta' qabel ikun

anqas jew aktar minn elfejn hames mija u hamsa u

hamsin,

I-ammont ta' LM7 ,000 ,000 ghandu jigi miijud jew

imnaqqas ghal ammont Ii tasal ghalih billi timmultiplika

I-ammont ta'LM7 ,000,000 bil-proporzjon Ii I-ghadd ta'

granet kompriii fil-perjodi msemmija jkollhom ghal

elfejn hames mija u hamsa u hamsin gurnata.

(2) L-income Ii kumpannija kwalifikanti tikseb mill-

kummerc jew minn negozju taghha matul is-sena rilevanti u Ii

jkun mehIus mit-taxxa fuq I-income jew Ii jigi intaxxat b'rata

mnaqqsa ta' taxxa fuq I-income skond id-dispoiizzjonijiet ta'

subartikolu (1) ta' dan l-artikolu, ghandu jigi ikkalkulat skond n-

formula stabbilita fis-subartikolu (2) ta' artikolu 5 ta' dan I-Att

IZda kumpannija kwalifikanti rna tistax titlob xi beneficcju

tant dan I-artikolu ghal xi sena ta' stima Ii fiha tkun talbet ukol! xi

beneficcju tant I-artikolu 5 ta' dan I-Att.

(3) Kurnpannija kwalifikanti tista' tibbenefika gnall-incentiv

tab! id-dispozizzjonijiet ta' dan l-artikolu gnal mhux aktar mint!

gnaxar snin ta' stima, Iiema ghadd ta' snin m'gnandux ghalfejn

ikun konsekutti v.

Ghall-finijiet ta' dan l~artikolu

(4)

(a) gnandujigi eskluzkull income Ii majillkisbx mill-

kumpannija mill-kurnmerc jew negozju taghha;

(b) I-ammont ta' bejgh totaH uta' bejgh esportat

gnandu jigi meqjus free on board u f'ka'z ta' bejgh'Ii jsir fuq

kuntratt ta' xognIijiet, dan ghandu jinkludi I-valur uninvoiced

tal-materjal u components provduti mill-klijent.

(5)

F'dan l-artikolu:.-

"nefqa fl-akkwist ta' assi kwalifikanti" tfisser nefqa Ii

ssir fl-akkwist ta' assi rigward liema tista' ssir taiba ghalI-

allowance ghall-investiment skond artikolu 7 ta' dan I-Att,

eskluza kull spiza Ii ssir ghal1-vetturi mhux kummercjali;

"vetturi mhux kummercjali" tfisser dawk iI-vetturi Ii

ghalihom japplika s-subartikolu (3) ta'I-artikolu 14 ta'l-Att

dwar it-Taxxa fuq I-Income;

"sena rilevanti" tfisser kul! perjodu ta' kontjar ta'

kumpannija kwalifikanti Ii jaghlaq fis-sena ta' qabel is-sena

ta' stima 1998 jew kuI! sena ta' stirna sussegwenti kif jista'

jkun il-kai;;

"perjodu ta' kontjar" tfisser il-peljodu ta' kontjar kif

stabbilit b'referenza ghal artikolu II ta' I-Att dwar it-Taxxa

fuq I-Income;

"profitti" u "income" ghandhorn f'kull kaz jitqiesu kif

komprizi fl-income taxxabbli tal-kumpannija ghalI-frnijiet tat-

taxxa fuq I-income wara Ii jittiehdu in konsiderazzjoni kull

incentiv jew beneficcju Ii l-kumpannija tkun akkwistat skond

id-dispo:i:izzjonijiet ta' dan I-Att.".

8. Minflok iI-paragrafu (a) tas-subartikolu (2) ta' l-artikolu 6 ta' ~endata'!-

" al- 1 g li an d u JI "dli 0 I d an Ii" geJ

Ilrtlkolu 6 ta I,An

I-Att princlp

principali,

"(a) jekk il-Korporazzjoni tircievi t-talba gliall-

approvazzjoni gliall-finijiet ta' dan I-artikolu aktar tard minn erbglia

u glioxrin xaharwara t-tmiem tas-sena Ii tigi immedjatament gabel

is-sena ta' stima Ii fiha gliandu jigi intaxxat I-income Ii dwaru

tista' tingliata I-approvazzjoni; jew",

Minflok subartikolu (5) ta' l-artikolu 7 ta' I-Att principali E~cnd.t.'I-

.

• .

artikolU 7 ta'I-Att

gliandu jidho! dan 11 gej

prinCipali,

"(5) P'dan I-artikolu u f'artikolu 8 ta' dan I-Att

(a) proprjeta immobbili Ii tinzamm b'titolu ta'

enfitewsi; u

(b) kull attiv ielior 1i gnalih japplika dan I-artikolu u 1-

artikolu 8 ta' dan I-Att akkwistati permezz ta' kuntratt ta'

finance leasing jew permezz tl\' kuntratt ta' kiri Ii jistipuia Ii

I-proprjeta ta'l-attiv gnandha tigi jew tista' tigi trasferita lill-

inkwilin meta tkun giet iml'iallsa somma specifikata ta' flus,

liema kuntratt gliandu f'kull kaz jigi approvat mill-

Korporazzjoni,

jigu meqjusa Ii qed jinzammu b'titoIu ta' proprjeta assoIuta,",

Minnufih waraI-paragrafu (c) ta' subartikolu (3)ta' I-artikolu Emendata'l-

, .. aI' 1, g h an d u JI "dh 0 Id an 1 'I -paragra ful" 1 geJ: ,

'IA

anikolu9ta'l,An

9 ta - tt pnnclp

principaJi.

"(d) tant id-dispozizzjonijiet ta'I-artikolu 5A ta' dan I-Att,

meta ikunu qliegh jew profitti ta' kumpannija Ii tkun menlusa

mit-taxxa fug I-income ghal kwalunkwe sena tant I-iskema ta'

incentivi gnall-investiment.",

Minnufih wara I-proviso Ii hemm mal-artikoIu 15 ta' I-Att E~end.ta'l-.

"'di e dd an 1 'I -provIso

pnnclpa Ii , g Ii an d U JIZ

..

'-d'dI'"

.rttkoluI5Ial-Att

g i l gej

principali,

"Iida wkoll,f'kai iIli shareholder ta' kumpannija kwalifikanti

jkun ukoll kumpannija kkostitwita talit il-Ligi ta' Malta, id-

dispozizzjonijet ta' dan I-artikolu ghandhom ikunu japplikaw bl-

istess mod u daqs Ii kieku x-shareholders taHieni kumpannija

kienu proprjetarji diretti tal-kumpannija kwalifikanti.".

L-artikoiu 16 ta' I-Att principali ghandu jigi emendat kif

(a) minflok is-subartikolu (2) tiegliu, ghandujidliol dan Ii gej

"(2) ll-Korporazzjoni tista' taghti self kif provdut fis-

subartikolu (1) ta' dan l-artikolu, meta-

(a) I-impjant, inakkinarju jew attiv fiss iehor jigu

akkwistati bhala parti minn programm ta' investimenti

b'tul ta' mhux aktar minfi tliet snin kif jista' jigi approvat

mill-Korporazzjoni,. u

(b) tali ptogramm ta' investimcnti jkun ta' mhux

anqas minn wiehed u ghoxrin elf lira Maltija.";

(b) minflok il-paragrafu (a) tascsubartikolu (3) tieghu, ghandu

jidhol dan Ii gcj

"(a) LM1 ,000,000 fiI-kaz ta' kumpanniji Ii jissodisfaw

il-kundizzjoni msemmija fil-paragrafu (b) tas-subartikolu (1)

ta' l-artikolu 4 ta' dan I-Att, u"; u

minfiok is-subartikolu (4) tieghu, ghandu jidhol dan Ii

(c)

"(4) Ir-rata ta' imghax mitluba mill-Korporazzjoni fuq

self moghti taht dan l-artikolu ghandha tkun jew

(a) ir-rata minima ta' skont skond id-direttivi

mahruga minn zinien ghal Zmien mill-Bank Centrali ta'

Malta taht i-Att dwar ll-Bank Centrali ta' Malta,

uieqes -

(i) Zewg punti u nofs percentwali dwar self

moghti talit il-paragrafu (a) tas-subartikolu (3) ta'

dan l-artikolu, u

(U)

nofs punt percentwali dwar kun self

iehor

Izda d-dispozizzjonijiet ta' l-inciz (i) tal-paragrafu

(a) ta' dan is-subartikolu jigu applikati biss mill-

Korporazzjoni meta r-rata minima ta' skont tkun

ekwivalenti glial jew oghla minn zewg punti u nofs

percentwali, u d-dispozizzjonijiet ta' l-inciz (ii) tal-

paragrafu (a) ta' dan is-subartikolu jigu applikati biss

mill-Korporazzjoni meta r-rata minima ta' skont tkun

ekwivaleriti ghal jew oghla minn nofs punt percentwali

jew

(b) dik ir-rata Ii tista' tigi stabbilita mill-Ministru

b'avviz fil-Gazzetta,",

L-artikoIu 18 ta' I-Att prinCipali ghandu jigiemendat kif gej; Emend. ta'l-

artikolu 18 la'I-Att

principali.

(a) fis-subartikolu (4) tieghu, wara l-kliem "ivarja r-rati"

ghandhomjidliIu I-kliem "u I-metodita' aggustament ta' dawk ir-

rati"; u

(b) minnufih wara s-subartikolu (5) tiegnu, ghandu jidhol

dan is-subartikolu gdid Ii gej;

"(6) Il-Korporazzjoni tista' tikseb ukoll ghall-

kumpannija kwalifikantibini il strutturi industrijali b'titolu

ta' enfitewsi temporanja u art fi.stat mhux zviluppat b'titolu

ta' kera tabt dawk it-termini u kundizzjonijiet Ii jistghu jigu

preskritti mill-Ministru minn zmien ghat zmien,",

Mirtnufih wara I-artikolu 18 ta' I-Att principali ghandu Zieda la' arlikelu

d I 'k 0 1 u g 'd'd

I' , "

' g d i d 18A rna' I-Au

J1 110 an -

I .1 geJ,

arti·

principali.

18A, (1) Il-Korporazzjoni tista' ,safejn dan ikunjaqbel

rna' l-ghanijiet u l-objettivi tal-pjan industrijali tal-Gvern,

taghti lil kumpannija kwalifikanti wahidha jew flirnkicn rna'

kumpanniji kwalifikanti ohra, struttura jew bini b'titolu ta'

kera biex jigi uzat bhala I;hild day care centre ghal

beneficcju ta' genituri-impjegati ta' I-istess kumpannija

kwalifikanti, ta' kumpanniji kwalifikanti ohra jew ta' fornituri

ta' servizzi flcoqsma industrijali tal-Overn kifilcKorporazzjoni

tista' tapprova skond it-terminiul-kundizzjonijiet hawn spec

ifikati

(a) I-ebda. kera rna tkun dovuta ghall-ewwel tliet

snin tal-kirja;

(b) wara dan, kera annwali tkun dovuta b'rata kull

metru kwadru Ii rna tkunx taqbei: il-25 fil-mija tal-kera

annwali kull rnetru kwadru Ii tkun dovuta ghall-fabbrika

allokata skond l-artikolu 18 ta' dan l-Att;

(e) n,Korporazzjoni tista' tipprovcIi minghajr hlas

design package Ii jkun jinkIudi .I-pjanti tal-layout, Iisti

ta' ghamara u taghmir li jkunu mehtiega gnac-centro u

l-ispecifikazzjonijiet gnall-arja. kundizzjonata,

ventilazzjoni u facilitajiet sanitruji;

Cd) il-Korporazzjoni tista' wkoll tiffinanzja l-ispiza

ghat-twaqqif ta' centro bhal dan sa massimu ta' 50 fil-

mija tan-nefqa totali, eskIuzi l-isPbjjez ghall-arja

kundizzjonata u 1-ventilazzjoni Ii jistghu jigu ffinanzjati

mill-Korporazzjoni sar-rata massirria ta' 25 fil-mija ta'

l-ispiZa totaIi.

(2) ll-Korporazzjoni tista', safejn dan ikun jaqbel rna'

l-ghanijiet u l-objettivi tal-pjan industrijali tal-Gvern,

tippermetti lil kumpannija kwalifikanti tuia parti minn

struttura jew bini miksuba gilal tali kumpannija skond id-

dispoiizzjonijiet ta' l-artikolu 18 ta' dan I-Att bhala child day

care centre ghal beneficcju ta' genituri-irnpjegati ta' I-istess

ktimpannija kwalifikanti, ta' kumpanniji kwalifikanti ohra jew

ta' fornituri ta' servizzi fl-oqsrna·industrijali tal-Gvern taht!-

istess termini u kundizzjonijiet konternplati·fil-paragrafi (a),

(b), (c) u (d) tas-subartikolu (1) ta' dan l-artikolu.

(3) Kumpannija kwalifikanti Ii twaqqaf child day care

centre fi stn.lttura jew bini miirnum minnha b'titolu ta'

propIjeta' assoluta, enfitewsi jew kera minghand terzi persuni,

tista' tinghata mill-Korporazzjoni l-istess beneficcji, U

assistenza konternplati fil-paragrafi (c) u (d) ta' subartikolu

(1) ta' dan l-artikolu.

(4) ll-Korporazzjoni tista' tipprovdi wkollI-assistenza

Ii gejja lil kumpanniji kwalifikanti Ii jwaqqfu child day care

centre skond id-dispoiizzjonijiet tas-subartikoli (1), (2) jew

(3) ta' dan l-artikolu;

(a) il-finanzjament sa rhassimiJ ta' 50 fiI-mija ta'

I-ispizarikorrenti approvata ghal child-care· f'tali Centru,

b'dan i:i;da Ii l-genituri-impjegati rna jintalbiJx ihallsu

aktar mirin dik is-somma fis-sena Ii tista' tistabbilixxi 1-

Kotporazzjoni;

(b) il-finanzjament ta' I-ispejjei approvati ghal

tahrig inizjali u ta' aggornament gilal staff Ii jkun

adegwatament kwalifikat.

(5) Kumpannija kwalifikanti Ii twaqqaf child day care

centre skond id-dispozizijonijiet tas-subartikoIi (1), (2) jew

(3) ta' dan I-artikolu, tista' tingnata permess mill-

Korporazzjoni biex tidhol fi ftehim rna' kumpanniji

kwalifikanti oura jew rna' formturi ta' servizzi f'oqsma

industrijali tal-Gvern rigward J-eccess ta' postijiet ftaIi centri.

(6) TI-Korporazzjoni tista' ,fid-diskrezzjoni tagliha tagnti

IiU-knmpannija kwalifikanti Ii topera child day care centre

skond id-dispozizzjonijiet tas-subartikoli (1), (2) jew (3) ta'

dan l-artikolu nelsien mid-dazju skond I-artikolu 17 ta' dan 1-

Att fuq gnamara jew taghmir uzati ftali centru.

(7) Il-Korporazzjoni tista' fl-guoti la' kulJ gnajnuna tabt

id-dispozizzjonijietta' dan I-artikolu timponi kull kundizzjoni

Ii jidhrilha Ii tkun xierqa rigward il-hlasijiet Ii jistgnu jintalbu

glial tali servizz ta' child day care mingliand il-genituri-

impjegati." .

Minflok I-artikohi 24 ta' I-Att principali ghandu jidliol dan E~enda ta' 1-,

. ik I ' d'd I' , '.

.rt.kolu 24 ta I-At!

I -!lIt 0 u g I l geJ-

principali_

50

8.75

0.00

Provided that the six accounting periods preceding

the relevant year shall be accounting periods the profits

of which fall to be charged to income tax in year of

assessment 1998 or subsequent years of assessment and,

where the number of such accounting periods preceding

the relevant year are less than six, the qualifying

percentage referred to in this paragraph shall be

determined for the period of time commencing from

the first day of the accounting period the profits of which

fall to be charged to income tax in year of assessment

1998 and ending on the last day of the relevant year

Provided further that where a company was not in

existence during ail of the six years preceding the relevant

year, the qualifying percentage referred to in this

subsection shall be detennined for the period of time

during which such company was in existence;

or

(b) is equal to or exceeds LM7,OOO,OOO, the

ineome derived by such company from its trade or

business during the relevant year as is proportionately

attributable to.its increased export sales as detennined

in terms of subsection (:4) of this section shall be exempt

from income tax

Provided that

(i) if the number of days comprised' in the

period of time commencing from "the first day of

the accounting period the profits of which fall to

be charged to income tax iiI year of assessment 1998

and ending on the last day of the relevant year, is

less than two thousand five hundred and fifty five;

or

(ii). the number of days comprised in the

relevant year and in the preceding six accounting

periods is less or more than two thousand five

hundred and fifty five,

the amount of LM7,OOO,OOO shall be increased or

reduced to an amount arrived at by multiplying

LM7,OOO,OOO by the proportion which the number of

the days comprised in the aforementioned periods bears

to two thousand five hundred and fifty five days.

(2) The income derived by a qualifying company

from its tr'ade or business during the relevant year and which

shall be exempt from income tax or taxed at the reduced rates

of tax in accordance with the provisions of subsection (1) of

this section, shall be calculatedin accordance with the formula

set out in subsection (2) of section 5 of this Act

Provided that a qualifying company may not claim a

benefit under this section for any year of assessment in which

it has also claimed a benefit under 'section 5 of this Act

(3) A qualifying company may benefit from the

incentive provided for by this section for not mote than ten

years of assessment which,years need not be consecutive.

(4)

For the purposes of this section

(a) there shall be excluded any income which is

not derived by the company from its trade or business;

(b) the amount oflotal sales and export sales shall

be calculated free on board and where the sale is made

pursuant to a contract of works, it shall include the

uninvoiced value of any materials and components

provided by the customer.

(5)

In this section:-

"expenditure in acquiring qualifying assets" means

expenditure incurred 'in acquiring assets in respect of

which an investment allowance can be claimed in terms

of section 7 of this Act. excluding any expenditure

incurred on non-commercial motor vehicles;

"non-commercial motor vehicles" means those

vehicles to which subsection (3) of section 14 of the

Income Tax Act applies;

"relevant year" means any accounting period of a

qualifying company which ends in the year preceding

year of assessment 1998 or any subsequent year of

assessment as the case may be;

"accounting period" means the accounting period

as determined by reference to section 11 of the Income

Tax Act;

"profits" and "income" shall in all cas'es be taken

as comprised in the company's chargeable income for

income tax purposes after account has been taken of any

incentive or benefit obtained by the company under the

provisions of this Act.".

8. For paragraph (a) of subsection (2) of section 6 of the Am;ndmentof

=~~~~

principal Act there shall be substituted the following

"(a) in respect of any application for the purpose of this

section flIed with the Corporation later than twenty Jour months

after the end of the year immediately preceding the year of

assessment in which the income in respect of which approval may

be given falls to be charged to tax; or".

9. For subsection (5) of section 7 of the principal Act there Am 7 ndinent of

~~n

shall be substituted the following

principal Act.

In this section and in section 8 of this Act

"(5)

(a)

immovable property held by title of emphyteusis;

and

(h) any other. asset to which this section and section 8

of thi.s Act applies acquired under a: finance lease contract or

a contract of hire which stipulates that ownership of the asset

shall or may pass to the lessee when a specified sum of money

has been paid, which contract is in each case approved by the

Corporation,

shall be deemed to be held in full ownership.".

10. Immediately after paragraph ( c) of subsection (3) of section Am;ndment of

~~~~n 9

9 of the principal Act, there shall be added the following paragraph

principal Act

H( d) under the provisions of section 5A of this Act, being

gains or profits of a cOlnpany relieved from income tax for any

year under the investment incentive scheme.".

11. Immediately after the proviso to section 15 of the Amendmentof

principal Act, there shall be added the f~lIowing new provIso

~~c:n 15

principal Act.

"Provided further that where a member of a qualifying

company is also a company incorporated under Maltese Law, the

provisions of this section shall apply to the same extent as if the

members of the latter company had owned the shares directly in

the qualifying company.".

12. Section 16 of the principal Act shall be amended as follows

Ca) for subsection (2) thereof there shall be substituted the

following

"(2) The Corporation may grantloans as provided under

subsection (1) of this section when-

(a) the plant, machinery or fixed assets are acquired

as part of an investment programme of not more than

thrce years duration as may be approved by the

Corporation. and

(b) such investment programme is of not less than

twenty one thousand Malta 1m.";

(b) for paragraph (a) of subsection (3) thereof, there shall be

susbstituted the following

"Ca) LM1,OOO,OOO in case of companies satisfying the

condition laid down in paragraph (b) of subsection (1) of

section 4 of the Act, and"; and

(c) for subsection (4) thereofthere shall be substituted the

following

"(4) The rate of interest charged by the Corporation

on loans granted under this section shall be either

(a) the minimum discount rate in terms of

directives issued from time to time by the Central Bank

of Malta under the Central Bank of Malta Act, less

(i) two and a half percentage points in respect

of loans made under paragraph (a) of subsection

(3) hereof, and

(ii) half a percentage point in respect of other

loans

Provided that the provisions of item (i) of paragraph

Ca) of this subsection shall be applied by the Corporation

when the said minimum discount rate is at an equivalent

or higher level than two-and half percentage points, and

the provisions of item (ii) of paragraph Ca) of this

subsection shall only be applied by the Corporation when

the said minimum discount rate is at an equivalent or

higher level than half a percentage point;

or

(b) such other rate as may be prescribed by the

Minister by notice in the Gazette.".

13. Section 18 ofthe principal Act shall be amended as follows: section

Amendment of

of the principal Act.

(a) in subsection (4) thereof, after the words "vary the rates",

there shall be inserted the words, "and the method of revision of

such rates"; and

(b) immediately after subsection (5) thereof, there shall be

inserted the following new subsection

"(6) The Corporation may also procure for a qualifying

company industrial buildings and structures by title of

temporary emphyteusis or undeveloped land by title of lease

at such terms and conditions as may be prescribed by the

Minister from tillie to time.".

14. Immediatelly after section 18 of the principal Act, there shall Addition of new

. .

section J8A to the

be added the foIIowmg new sectIon

principal Act.

(1) The Corporation may, consistently with the

aims and objectives of the industrial policy of the Government,

grant on lease to a qualifying company, on its own or jointly

with other qualifying companies, a structure or building to

be used as a child day care centre for the benefit of parent-

employees of such a qualifying company, other qualifying

companies or service providers in government industrial

estates'as may be approved by the Corporation in accordance

with the terms and conditions herein specified

(a) no rent shall be charged for the first three years

of the lease;

(b) thereafter an annual rent shall be charged at a

rate per square metre which shall not exceed 25 per

centum of the rent per square metre per annum charged

for the factory allocated in accordance with section 18

of this Act;

(c) the Corporation may also provide free of charge

a design package which shall include detailed lay-out

plans, lists of furniture and equipment required for the

centre and specifications for air conditioning, ventilation

and sanitary facilities;

(d) the Corporation may also finance the cost of

the setting up of such a ceritre up to a maximum of 50

per centum of the total cost, excluding the costs for the

air conditioning and ventilation, which may be fmanced

by the Corporation up to a maximum rate of 25 per

centum of the total cost.

(2) The Corporation may, consistently with the aims

and objectives of the industrial policy of the Government,

allow a qualifying company to use a portion of an industrial

stmcture or building procured for such company in accordance

with section 18 of this Act, as a child day care centre for the

benefit of parent-employees of such a qualifying company or

other qualifying companies, or parent-employees of service

providers in government industrial estates subject to the same

tenUs and conditions contemplated under paragraphs (a), (h),

(c) and (d) of subsection (1) of this section.

(3) A qualifying company which sets up a child day

care centre in a structure or building which is held by such

company in full ownership, on emphyteusis or lease from

third parties, maybe granted by the Corporation the same

benefits and assistance. as provided in paragraphs (c) and (d)

of subsection (1) of this section.

(4) The Corporation may also provide the following

assistance to qualifying companies setting up child day care

centres in accordance with the provisions of subsection (1),

subsection (2) or subsection (3) of this section

(a) the financing of up to a maximum of 50 per

centum of the approved recurrent costs for child care at

such a centre, provided that the parent-employees may

not be charged more than a maximum sum per year as

may be determined by the Corporation;

(b) the financing of approved initial and refresher

training costs of suitably qualified staff.

(5) A qualifying company which sets up a child day

care centre in accordance with subse-ction (1), subsection (2)

or subsection (3) of this section, may be allowed by the.

Corporation to enter into agreements with other qualifying

companies or with service providers in government industrial

estates regarding vacancies in such a centre.

(6) The Corporation may, in its discretion grant to a

qualifying company operating a child day care centre in

accordance with the provisions of subsections (1), (2) or (3)

of this section relief from customs duty as provided in section

17 of this Act regarding furniture or equipment to be used in

such a centre.

(7) The Corporation may in granting any assistance in

accordance with 'the provisions of this section, impose any

conditions it may deem fit regarding the fees which may be

charged for such child day care service on the parent-

employees.".

15. Section 24 of the principal Act shall. be substitued by the Substitution of

section 24

ofthe

principal A1.':1.

(1) The Corporation may, at its discretion, grant

to a small enterprise

Ca) relieffrom customs duty as provided in section

17 of this Act;

Cb) industrial buildings, structures and land on

such conditions as the Corporation may from time to

time determine;

soft loans as provided in section 16 of this Act;

(c)

or

(d) any other incentive or benefit as would be

consistent with the aims and objectives of the industrial

policy of the Government, as may be prescribed by the

Minister by notice in the Gazette.

(2) In subsection (l) of this section "small enterprise"

means a person or a company constituted under Maltese Law

which

(a) carries on or carries out a trade or business

contemplated under paragraphs (a) to (h) of subsection

(1) of section 3 of this Act or such other trade or business

as the Minister may prescribe by notice in the Gazzette;

and

(b) has at least two of the following criteria not

exceeding the threshold as the Minister may prescribe

from time to time by notice in the Gazette

(i) the turnover;

(ii) the number of employees;

(iii) the balance sheet total;

(iv) the total investment

Provided that the Minister may vary the threshold

levels in relation to the type of trade or business Carried

out which the Minister may specify in the said notice.".

16. Immediately after section 24 of the principal Act, there shall

be added the following new sections

Where the Corporation is satisfied that in

(1)

.. <onneenon" h

f

f

.

l'f .

wilh energy t e case 0 a qua 1 ymg company or 0 a company which

carries on or carries out, in Malta, a trade or business consisting·

conservaUon.

mainly of the operation or management of a hotel or group of

hotels, it would be consistent with the aims and objectives of

the policy of the Govermnent regarding "energy and water

conservation, the Corporation may grant loans to the said

company for the acquisition of related plant, equipment,

machinery and other fixed assets, but excluding land. and for

the financing of the necessary civil engineering and

infrastructural works, in accordance with the terms and

conditions herein specified.

(2) The Corporation may grant loans as provided under

subsection (1) of this section when the plant, equipment,

machinery or fixed assets are acquired as part of an investment

prograrmne for the conservation of energy or water as may

be approved by the Corporation.

(3) Loans under the provisions of this section shall in

no case exceed thirty-three per cent of the projected investment

programme for the conservation of energy or water as

approved by the Corporation, but no loan shall exceed

Lm200,OOO,

(4) The rate of interest charged by the Corporation on

loans granted under this section shall be the minimum disconnt

rate in tenus of directives issued from time to time by the

Central Bank of Malta under the Central Bank of Malta Act,

less two and a half percentage points

Provided that the provisions of this subsection may only

be applied by the Corporation when the said minimum

discount rate is at an equivalent or higher level than two and

half percentage points.

(5) The provisions of subsections (4), (5), (6), (7), (8),

(9) and (10) of section 16 of this Act shall apply mutatis.

mutandis to loans granted by the Corporation under the

provisions of this section.

(1) Where it appears to the Corporation in the

JWuce<! .. tes

or::: case of a company which carries on or carries out, in Malta, a

:.roisbi~g trade or business consisting mainly of the operation· or

f h ote I s, th at th e gams

management 0 f a h ote I or group 0

. or

orrenovabOn

profits or part thereof derived by that company from its trade

or business or part thereof in the year of assessment

commcncing on 1st January, 1997. or in subsequent years of .

assessment, have been set aside for the exclusive purpose of

financing a project for the upgrading, refurbishing or

renovation of a hotel or hotels owned, operated or managed

by such a company and as shall have been approved by the

Corporation, and that the gains or profits or part thereof have

in fact been used for the purposes for which they were set

aside, the Corporation shall issue· to such company a certificate

showing compliance and thereupon the rate of income tax

charegeable on the gains or profits or part thereof so used

shall be reduced by seventeen and a half percentage points,

and in any such case the tax chargeable shall be assessed, or

reassessed and where necessary refunded, as the case may

require.

(2) The provisions of subsection (2) of section 6 of

this Act shall apply mutatis mutandis to companies qualifying

for assistance under the provisions of subsection (1) of this

section." .

17. Section 25 of the principal Act shall be amended as follows: Amendment of

section 2S of the

(a) immediately after subsection (3) thereof there shall be principal Act.

added the following new subsections

He 4) Notwithstanding any other provision of this Act, in

releasing a certificate in accordance with the provisions of

subsection (3) of this section, the Corporation may impose

any conditions it may deem fit including a reduction in the

term of the tax holiday contemplated by section 4 of this Act.

(5) The Corporation may at its discretion issue a

certificate. ex.empting a qualifying company from the

requirements of paragraph (c) of subsection (1) of section 4

of this Act under such terms and conditions it may deem fit to

impose where

(a) the company is a joint venture between an

existing qualifying Maltese company or companies (in

this subsection referred to as "the f!fst partner company")

and a company which carries on its trade or business

outside Malta (in this subsection referred to as "the

second partner company") and which, if it were not for

the said joint venture, would satisfy the conditions

established in paragraph (c) of subsection (1) of section

4 of this Act; and

(b) the second partner company holds at least 20%

of the ordinary and voting share capital of the joint

venture company; and

(c) the Corporation is satisfied that the second

partuer company would bring into the joint venture

company innovative technology, new production

processes or access to new foreign markets."; and

(b) subsections (4) and (5) thereof shall respectively be

renumbered as subsections (6) and (7).

18. Section 34 of the principal Act shall be amended as follows

(a) in subsection (2) thereof, for the words "on account of

which it has been made." there shall be substituted the words "on

account of which it has been made:"; and

(b) immediately at the end of subsection (2), there shall

be inserted the following proviso

"Provided that, notwithstanding anything contained in

subsection (1) of section 45 of this Act, a qualifying company which

so elects not to be granted or to take any incentive or benefit

otherwise due to it under the provisions of this Act, shall not be

precluded from being granted any incentive or benefit of a similar

nature granted under the provisions of the Aids to lndnstries

Ordinance.".

19. Subsection (2) of section 35 of the principal Act shall be Amendmentof

~t.~n 35

substituted by the following new subsection

principal Act.

"(2) A qualifying company shall not be entitled to any

incentive or benefit contemplated under the provisions of this

Act unless its annual rman<;ial statements,. and in the case of

a company not incorporated under Maltese Law the annual

financial statements of its operations in Malta, are audited by

a certified pubIicaccountant and aUditor in accordance with

the provisions of the Commercial Partnerships Ordimince,

1962 or the Companies Act, 1995, as applicable, whether or

not such audit is required under the said Ordinance or Act

and unless all other statements, accounts or documents

submitted for the purpose of acquiring any such incentive or

benefit are also <;ertified by a certified public accountant and

auditor to the same effect that the company's financial

statements are to be certified under the provisions of the said

Ordinance or Act as afores.aid.".

20. Section 36 of the principal Act shall be amended as follows: ~::~~~nt of

of the

(a) in the proviso to subsection (2) thereof, whenever the principalAcl

words "section 6" occur, there shall be added thereto the words

"and section 24B";

(b) in paragraph (a) of subsection (4), immediately after the

words "of section 6" there shall be added the words "and section

24B"; and

(c) immediately after subsection (5) thereof, there shall be

added the following two new subs'ections

"(6) Where a qualifying company is a company

incorporated outside Malta, such company shall show the

Incentive and Benefits Reserve on its balance shGet in respect

of its business activities in Malta until the company's place

of business in Malta, in respect of which the reserve is

required, ceases to exist.

(7) The provisions of subsections (2), (3) and (5) of this

section shall only apply to companies constituted under

Maltese Law.".

21. Immediately after section 44 of the principal Act, there shall

be added the following new section

. . 44A.

T~e ~orporati?n may, with the approval of the

COIpOrotion's MinIster, exercise Its functIOns and powers under this Act

through the agency of other persons

Provided that any delegation of powers .or functions made

in accordance with the provisions of this section will not be

effective unless definitely approved by the Corporation.".

Passed by the House of Representatives at Sitting No. 72 of

Tuesday, 27th May, 1997.

Myriam Spiteri Debono

Speaker

RICHARD J. CAUCHI

Clerk to the House a! Representatives.

lppubblikat mid.Dipartimenl ta' I-lnromw.zjoni - 3. Pjazza Knstilja - PltbJisfu:d b,l' rhe DepamlJcm t!f illfimmHiolf _ 3. Cusfille PktCt

Milbugh f1-lsmmpcrija tnl-Gvern - Prillfed {It tIle Gm"crllllJel1l Printill.~ Press

Il-Korporazzjoni tista', bl-approvazzjoni tal-

Ministru, tezercita I-funzjonijiet u s-setghat taghha taht dan

I-Att permezz ta' l-agenzija ta' persuni ohra

B'dan izda kull delega ta' poteri jew funzjonijiet Ii ssir

skond id~dispozizzjonijietta' dan l-artikolu rna tkunx effettiva

sakernrn rna tigix approvata b'rnod definittiv rniIl-

Korporazzjoni." .

Mghoddi rriill-Kamra tad-Deputati fis-Seduta Nru. 72 tat-Tlieta,

27 ta' Mejju, 1997.

MYRlAM SPITERI DEBONO

Speaker

RICHARD J. CAUCHI

Skrivan tal-Kamra tad-Deputati.