Business Promotion (Amendment) (No. 3) Regulations, 2003

L.N. 128 of 2003

BUSINESS PROMOTION ACT

(CAP. 325)

Business Promotion (Amendment) (No. 3) Regulations, 2003

IN exercise of the powers conferred upon him by section 59 of the

Business Promotion Act, hereinafter referred to as the “Act”, the Minister

responsible for Finance and Economic Affairs has made the following

regulations>-

The title of these regulations is the Business Promotion Citation.

(Amendment) (No.3) Regulations, 2003, and shall be read and construed

as one with the Business Promotion Regulations, 2001, hereinafter L.N. 135 of 2001.

referred to as “the principal regulations”.

These regulations shall be deemed to have come into force as Commencement.

follows>

(a) regulation 3 shall be deemed to have come into force on

1st November 2000<

(b) regulation 4 shall be deemed to have come into force on

1st January 2003<

(c) regulation 5 shall be deemed to have come into force on

1st January 2003< and

(d) regulations 6, 7, 8, 9, 10, 11, 12 and 13 shall be deemed

to have come into force and shall apply with effect from year of

assessment 2004 and subsequent years of assessment.

In the definition of “qualifying expenditure” in regulation 2 Amends regulation

of the principal regulations, for the words “the activities referred to in 2 regulations.

the second proviso to sub-regulation 5(12)<” there shall be substituted

by the words “the activities referred to in article 3(1) of the Business

Promotion Act<”.

In the English text only, the proviso immediately following Amends regulation

regulation 3(11) of the principal regulations shall be amended as follows> 3 regulations.

(a) for the words “Provided that this sub-regulations”, there

shall be substituted the words “Provided that this sub-regulation”<

and

(b) for the words “(ii) the other benefits such enterprises”

there shall be substituted the words “(ii) the other benefits such

enterprise”.

(1) Regulation 7 of the Business Promotion (Amendment

No. 2) Regulations, 2003, published by Legal Notice 98 of 2003, shall

be deemed as having never been made and as never having come into

force for all effects and purposes of the law.

(2) In regulation 28(1) of the principal regulations, for the

words “31 December 2002” there shall be substituted the words “30

April 2003”.

Regulation 31 of the principal regulations, shall be amended

as follows>

(a) in the marginal title thereof, for the words, “Tax credit

for life company” there shall be substituted the words “Tax credit

for large companies”<

(b) in sub-regulation (1)(a) for the words “medium-sized

enterprise<” there shall be substituted the words “medium-sized

enterprise< and”<

(c) in the English text only, in sub-regulation (1)(b)(ii)

thereof for the words “in any year of assessment subsequent to

year of assessment subsequent to year of assessment 2003 and

waives,” there shall be substituted the words “in any year of

assessment subsequent to year of assessment 2003 and waives,”<

(d) in sub-regulation (1)(b) immediately after the words “1st

January 2003<” there shall be added the word “or”<

(e) in sub-regulation (1)(c), for paragraph (ii) there shall be

substituted the following paragraph>

“(ii) pursuant to a change in legislation is no longer

entitled to benefit from the provisions of articles 4, 5 or 5A of

the Act or of articles 18 or 20 of the Malta Freeports Act<”<

(f) immediately after paragraph (ii) of sub-regulation (1)(c)

as herein amended there shall be added the following paragraph

which shall apply to the whole of sub-regulation 31(1)>

“such company shall, subject to the approval of the

Corporation, be entitled to the benefits provided by regulations

4 and 5 of these regulations and to utilize the tax credits

provided by regulations 32 to 35, as reduced by regulation

36, in accordance with the provisions of regulation 37< and

for the purpose of regulation 4 of these regulations, such

company shall, for the years of assessment in respect of which

it can utilize the aforementioned tax credits in accordance

with regulation 37, be deemed to be a company to which

regulation 4(2)(b) refers.”< and

(g) in the English text only, in sub-regulation (6) for the

word “incentive” there shall be substituted the word “incentives.”.

In regulation 33(1) of the principal regulations, for the words Amends regulation

33 of the principal

“1st January 1995 up to 31st December 2002” there shall be substituted regulations.

the words “1st January 1995 up to 31st December 2006”.

In the English text only, in regulation 35(3) of the principal Amends regulation

regulations, immediately following the words “referred to” and 35

regulations.

immediately preceding the word “sub-regulation”, there shall be added

the word “in”.

Regulation 36 of the principal regulations shall be amended Amends regulation

36 of the principal

as follows>

regulations.

(a) in the English text only, in sub-regulation (1) for the

words “articles 5, 5A, 7, 16, 19, 20 or 24C of the Act” there shall

be substituted the words “articles 4, 5, 5A, 6, 7, 16, 19, 20 or 24C

of the Act”<

(b) immediately after subregulation (3), there shall be added

the following new sub-regulation>

“(4) A deduction in respect of the benefits availed of

pursuant to articles 6, 7 or 16 of the Act or regulations 5, 8 or

9 shall only be made if the relevant company claims credits

pursuant to regulations 32, 33 or 35 in respect of expenditure

on which it was granted benefits under articles 6, 7 or 16 of

the Act or regulations 5, 8 or 9.”.

Regulation 37 of the principal regulations, shall be amended

as follows>

(a) in sub-regulation (1)(b) for the words “in the absence of

that incentive>” there shall be substituted the words “in the absence

of that incentive, and deducting the fraction so obtained from the

integer one (1), and multiplying the result by 100>”<

(b) in sub-regulation (1)(c) for the words “in the absence of

that incentive>” there shall be substituted the words “in the absence

of that incentive, and deducting the fraction so obtained from the

integer one (1), and multiplying the result by 100>”<

(c) in sub-regulation (1)(d)(iv) for the words “article 5A

subsequent to year of assessment 2003 shall, in the case of a

company to which paragraph (c)(ii) of sub-regulation 31(1)” there

shall be substituted the words “articles 5 and 5A subsequent to

year of assessment 2003 shall, in the case of a company to which

paragraph (c)(i) of sub-regulation 31(1)”<

(d) in sub-regulation (1)(e) for the words “the amount of

the tax credits and where the tax credits, for year of assessment

2007” shall be deleted and substituted by the words “the amount

of the tax credits and where the tax credits, for year of assessment

2004”.

Regulation 38 of the principal regulations shall be amended

as follows>

(a) in sub-regulation (1)(b) for the words “paragraph (b)

and (c) of sub-regulation (1) of regulation 31 hereof<” there shall

be substituted the words “paragraph (b) or (c) of sub-regulation

(1) of regulation 31 hereof<”<

(b) in the proviso to sub-regulation (1) for the words “the

provisions of this regulations” there shall be substituted the words

“the provisions of this regulation”.

(c) in sub-regulation (3) for the words “in the absence of

that incentive>” there shall be substituted the words “in the absence

of that incentive, and deducting the fraction so obtained from the

integer one (1), and multiplying the result by 100>”<

(d) in sub-regulation (4) for the words “in the absence of

that incentive>” there shall be substituted the words “in the absence

of that incentive, and deducting the fraction so obtained from the

integer one (1), and multiplying the result by 100>”.

In regulation 41 of the principal regulations immediately after Amends regulation

the words “ entitlement to a tax credit under” and immediately before 41

regulations.

the words “these regulations” there shall be added the words “regulations

32 to 35 of”.

Immediately after regulation 42 of the principal regulations, Adds new

regulation 43 to the

there shall be added the following new regulation>

principal

regulations.

“43. (1) With effect from year of assessment 2004 the

profits which shall be taxed at the reduced rates of tax in accordance

with the provisions of regulation 4 or 6 of these regulations shall

not, in any relevant year of assessment, exceed the amount produced

by multiplying the number of employees by>

a) Lm25,000 or such higher amount as may result from

the adjustments referred to in sub-regulations (2) and (3)

hereof, where the profits are taxed at the rate of 5%<

b) Lm28,000 or such higher amount as may result from

the adjustments referred to in sub-regulations (2) and (3)

hereof, where the profits are taxed at 10% or 15%<

(2) The amounts of Lm25,000 and Lm28,000 referred

to in sub-regulation (1) hereof are stated at 2002 prices and these

amounts shall in respect of year of assessment 2004 be increased

by a percentage equal to the percentage increase in the inflation

index, established in terms of article 13 of the Housing (Decontrol)

Ordinance, during 2003. For subsequent years of assessment these Cap. 158.

amounts shall be increased by a percentage equal to the percentage

increase in the inflation index, established in terms of article 13 of

the Housing (Decontrol) Ordinance, from 2002 to the year Cap. 158.

preceding the relevant subsequent year of assessment.

Provided that if the inflation index for a particular year has not

been published before the date that a company submits its income tax

return for a year of assessment the inflation index for that year shall be

provisionally deemed to be the inflation index of the previous year and

once the inflation index for the year in question is published the company

may make a further return in accordance with article 13 of the Income

Tax Management Act.

(3) Where in a relevant year of assessment the amount

of profits which are taxed at a reduced rate of income tax in

accordance with regulation 4 or 6 of these regulations is less than

the applicable amount set out in sub-regulation (1) hereof as

adjusted by>

a) sub-regulation (2) hereof< and

b) this sub-regulation in respect of the year of

assessment preceding the relevant year of assessment, such

shortfall shall be increased by the percentage referred to in

the first proviso to regulation 5(12) of these regulations and

such increased amount shall be added to the amount set out

in sub-regulation (1) hereof as adjusted by sub-regulation (2)

hereof for the year of assessment following the relevant year

of assessment.

(4) The number of employees referred to in sub-

regulation (1) hereof shall be the employees employed by the

company, claiming the benefit provided by regulation 4 or 6 of

these regulations, during the accounting period ending in the year

preceding the relevant year of assessment and such number of

employees shall be determined in accordance with the provisions

of regulations 3(8) and 3(9) of these regulations.

(5) In this regulation “relevant year of assessment”

means the year of assessment in respect of which the provisions of

regulation 4 or 6 of this regulation are to be applied.

(6) Within the scope of the provisions of the third

proviso to regulation 4(1) and the third proviso to regulation 6(1)

of these regulations, the Minister hereby determines that the last

year of assessment in respect of which the provisions of regulations

4 and 6 shall be applicable shall be year of assessment 2009.”

Mitbug[ fl-Istamperija tal-Gvern – Printed at the Government Printing Press