Financial Incentives for the Audiovisual Industry Regulations,

L.N. 65 of 2006

MALTA FILM COMMISSION ACT

(CAP. 478)

Financial Incentives for the Audiovisual Industry Regulations,

IN exercise of the powers conferred by articles 26(1) and 33 of the

Malta Film Commission Act, the Minister for Investment, Industry and

Information Technology, after consultation with the Prime Minister and

Minister of Finance, has made the following regulations>

(1) The title of these regulations is the Financial Incentives Citation and

commencement.

for the Audiovisual Industry Regulations, 2006.

(2) These regulations shall come into force on such a date

as the Minister responsible for the film industry may by notice in the

Gazette appoint and different dates may be so appointed for the different

provisions and different purposes of these regulations.

(3) The aggregate benefits under the scheme shall be an

amount specifically appropriated in Government’s financial estimates

for a particular financial year.

In these regulations, unless the context otherwise Interpretation.

(1)

requires -

“the Act” means the Malta Film Commission Act<

“certificate of provisional approval” means the certificate

issued in terms of regulation 7 of these regulations, in the form set

out in the First Schedule to these regulations<

“the Commission” means the Malta Film Commission<

“the Commissioner” means the Film Commissioner<

“completion” means the termination of filming activity in

Malta of an audiovisual production and “completed” shall be

construed accordingly<

“cultural product” means an audiovisual production in line

with the parameters outlined in the Guidelines issued by the

Commissioner<

“eligible expenditure” means the items of expenditure incurred

by the qualifying company in relation to the qualifying production

that are eligible for the purposes of calculation in accordance with

regulation 5 of these regulations of the amount to be granted as a

financial incentive<

“final approval” means the approval granted in terms of

regulation 8 of these regulations<

“the financial incentive” means the financial benefit provided

for in regulation 5 of these regulations<

“Guidelines” means the guidelines that may be issued by the

Commissioner from time to time<

“the Minister” means the Minister responsible for the film

industry<

“principal photography” means the filming of major or

significant components of an audiovisual production which

involves lead actors<

“qualifying company” means a qualifying company as defined

in article 25 of the Act and which meets the conditions established

by regulation 4 of these regulations<

“qualifying production” means a qualifying production as

defined in article 25 of the Act and which meets the conditions

established by regulation 3 of these regulations<

“State Aid Monitoring Board” means the State Aid Monitoring

Board constituted under article 57 of the Business Promotion Act<

“undertaking” means an entity carrying out an economic

activity.

(2) Words and expressions which are also used in the Act

shall, in these regulations, have the same meanings as in the Act.

(1) An audiovisual production shall be considered a

“qualifying production” for the purposes of these regulations if the

audiovisual work -

(a) is a cultural product produced wholly or partially in Malta

on a commercial basis with a view to profit< and

(b) is produced wholly or principally for exhibition to the

public in cinemas or through television broadcasting< and

(c) makes a valid contribution to the expression of creativity

and culture in Malta through the development of production

capability skills in the media of film and television< and

(d) is based on a format approved by the Commissioner in

accordance with the Guidelines established by the Commissioner.

(2) Sub-regulation (1) of this regulation shall apply without

prejudice to the conditions established in the Schedule to the Act and

the Second Schedule to these regulations.

The qualifying company shall be the entity responsible for all Qualifying

companies.

activities involved in making a qualifying production and having access

to full financial information for the total production worldwide, which

can be made available to the Commissioner upon the latter’s request>

Provided that there shall be only one qualifying company with

respect to a given qualifying production.

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

(1) A rebate of up to twenty percent of eligible expenditure Financial incentives

for audiovisual

shall be given as a cash grant to qualifying companies upon completion productions.

of a qualifying production in Malta, in accordance with these regulations

and the Guidelines. The cash grant shall be exempt for the purposes of

the Income Tax Act.

(2) The level of the rebate shall be determined by the

Commission in accordance with article 26 of the Act and the provisions

of these regulations.

(3) The eligible expenditure shall be established by reference

to the overall budget of the production concerned>

Provided that the Commissioner may decide on the

ineligibility of individual expenditure items of which the production

budget is formed. The Commissioner may issue Guidelines on the

exclusion criteria for such individual expenditure items.

(1) The application for the financial incentive shall be Application for

submitted to the Commissioner by the qualifying company or its local provisional

approval.

branch or agent in accordance with the Guidelines.

(2) The application mentioned in sub-regulation (1) of this

regulation shall be submitted together with such documentation and

information as may be required by the Commissioner, and shall include

the documents and information listed in the Guidelines.

(3) Subject to the provisions of regulation 10, the application

must be submitted at least thirty days before commencement of principal

photography in Malta.

(1) Following the receipt of the application made in

accordance with regulation 6 of these regulations, the Commissioner

shall make a recommendation in writing to the Commission regarding

the level of the rebate to be granted to the qualifying company, stating

that the production is a cultural product and meets the requirements of

a qualifying production, and shall forward to the Commission any

documentation or information furnished by the applicant as the

Commission may require>

Provided that where the Commissioner finds that the

application is not made by or on behalf of an entity that is a qualifying

company, it shall inform the applicant that the application is rejected

and the Commissioner shall not make such recommendation.

(2) Following the Commission’s determination of the level

of the rebate to be granted to the qualifying company, which shall not

exceed the amount recommended in terms of sub-regulation (1) of this

regulation, the Commissioner shall issue a certificate of provisional

approval, in the form set out in the First Schedule to these regulations,

to the qualifying company which shall state the percentage of

expenditure rebated to the production concerned and the conditions that

must be met in order to obtain the final approval under regulation 8 of

these regulations.

(1) Upon completion of the qualifying production in respect

of which a certificate of provisional approval was issued in accordance

with regulation 7 of these regulations, and no later than six months

after completion thereof, the qualifying company or its local branch or

agent shall submit an application for final approval to the Commissioner

in accordance with the Guidelines.

(2) The application mentioned in sub-regulation (1) of this

regulation shall be submitted together with such documentation and

information as may be required by the Commissioner, and shall include

the documents and information listed in the Guidelines.

(3) Following the receipt of the application made in

accordance with sub-regulations (1) and (2) of this regulation, the

Commissioner shall make a recommendation in writing to the

Commission regarding the amount of the incentive to be granted to the

qualifying company and he shall forward to the Commission any

documentation or information furnished by the applicant as the

Commission may require.

(4) The Commission shall inform the Commissioner in

writing of its decision on the amount of the incentive to be granted to

the qualifying company>

Provided that the amount of the financial incentive determined

by the Commission shall not exceed the amount recommended by the

Commissioner in terms of sub-regulation (3) of this regulation.

(5) The Commissioner shall make the necessary

arrangements for the implementation of the Commission’s decision on

the amount of the financial incentive to be granted to the qualifying

company.

(1) Where after submission of the application for provisional Significant budget

changes.

approval in terms of regulation 7 of these regulations, the final overall

budget of the qualifying production, to be indicated in the application

for final approval in terms of regulation 8 of these regulations, is expected

to differ significantly from the estimated overall budget indicated in

the application for provisional approval, a new application for

provisional approval shall be submitted>

Provided that there shall be deemed to be a significant

difference where the final overall budget to be indicated in the application

for final approval exceeds or goes below the estimated overall budget

indicated in the application for provisional approval by more than ten

percent.

(2) New applications for provisional approval in terms of

sub-regulation (1) of this regulation, shall be submitted and determined

in accordance with regulations 6 and 7 of these regulations, which shall

apply mutatis mutandis>

Provided that sub-regulation (3) of regulation 6 shall not apply

to the submission of such new applications.

(3) If no new application is submitted as required by sub-

regulation (1) of this regulation and the Commissioner finds that the

final overall budget of the qualifying production, as indicated in the

application for final approval in terms of regulation 8 of these

regulations, differs significantly from the estimated overall budget

indicated in the application for provisional approval, the amount of the

incentive to be granted to the qualifying company shall be determined

by reference to the estimated overall budget indicated in the application

for provisional approval or the final overall budget indicated in the

application for final approval, whichever is the lowest.

These regulations shall apply to audiovisual productions that

Time of initiation of

have been initiated after 1 st June, 2005 and [in respect of which an

application for provisional approval is made in accordance with

regulation 6 of these regulations] before 31 st December, 2008.

The qualifying company or its local branch or agent shall

provide the Commissioner with any information and documentation

which he may request for the exercise of his functions and those of the

Commission for the purposes of these regulations, either on the initiative

of the qualifying company or of its local branch or that of the agent

himself, or upon the request of the Commissioner>

Provided that the Commissioner may specify the on-going reporting

requirements of the qualifying company or of its local branch or that of

its agent in the Guidelines.

Any information furnished by the qualifying company or its

local branch or agent shall at all times be treated as confidential and

shall be used solely by either the Commission or the Commissioner, or

both, for the purpose of carrying out their respective functions for the

purposes of these regulations>

Provided that the information furnished by the qualifying company

or by its local branch or agent may be disclosed if and to the extent

required by or pursuant to any enactment, including but not limited to

fiscal legislation, or with the permission in writing of the legal or natural

person providing such information.

(1) The qualifying company, including its local branch or

agent, if any, shall ensure compliance with the conditions and

requirements set out in the certificate of provisional approval and in the

Guidelines.

(2) If the qualifying company or its local branch or agent,

if any, fails to meet any of the conditions and requirements as referred

to in sub-regulation (1) of this regulation, the Commissioner may

withdraw its provisional or final approval for the grant of the financial

incentive. If the qualifying company or its local branch or agent has

already received the financial incentive and the Commissioner

establishes that the conditions and requirements as referred to in sub-

regulation (1) of this regulation have not been complied with, it shall

refund to the Commissioner the amount of the financial incentive

received upon the Commissioner’s request.

Where the financial incentive has been provided in terms of Examination of

records.

these regulations to an undertaking, the Commissioner may –

(a) from time to time make or cause to be made such

examination of books, documents, premises and all other things

and matters of that undertaking, its local branch or agency, as the

case may be, as may be necessary to ensure that the provisions of

these regulations, and the conditions and requirements set out in

the certificate of provisional approval and in the Guidelines are

complied with< and

(b) request such financial statements from the undertaking,

its local branch or agency, as the case may be and as may be

required.

The Commissioner shall keep, for a minimum of five years, Database of

a database of all the financial incentives provided to, or claimed by, assistance provided.

undertakings in terms of these regulations in order to enable it to –

(a) verify whether the provisions of the Act and of these

regulations have been complied with< and

(b) provide the State Aid Monitoring Board with such

information as it may require.

SCHEDULE 1

SCHEDULE 6

SCHEDULE 9