Enterprise Support Incentives

L.N. 456 of 2012

MALTA ENTERPRISE ACT

(CAP. 463)

Enterprise Support Incentives

(Amendment) (No. 2) Regulations, 2012

IN exercise of the powers conferred upon him by article 5 of the

Malta Enterprise Act, the Minister of Finance, the Economy and

Investment, in consultation with the Malta Enterprise Corporation,

has made the following regulations:-

The title of these regulations is the Enterprise Support

Incentives (Amendment) (No. 2) Regulations, 2012, and these

regulations shall be read and construed as one with the Enterprise

Support Incentives Regulations, hereinafter referred to as "the

principal regulations".

In regulation 2 of the principal regulations, the definition

"undertaking" shall be substituted by the following

" "undertaking" means an undertaking as defined in the Act

except for the purposes of regulations 14 and 15 where

undertaking shall mean

(a) a limited liability company

constituted under the Companies Act; or

(b) a limited liability company

incorporated or registered outside Malta, and

registered as an oversea company in

accordance with the Companies Act;".

Regulation 14 of the principal regulations shall be

renumbered as regulation 16 thereof.

Immediately after regulation 13 of the principal

regulations, there shall be added the following new regulations

" Tax credits to

(1) When the Corporation is

undertakings

satisfied that an undertaking carrying on or

for restoration

intending to carry out a commercial activity

works on

protected

that may contribute to the economic

buildings used

for commercial

development of Malta, requires assistance to

activities.

restore a Grade 1 or Grade 2 scheduled

building or a building falling within an Urban

Conservation Area as defined in the

Environment and Development Planning Act,

being used or to be used for a commercial

activity as may be specified in the Guidelines,

the Corporation may provide such an

undertaking with a tax credit to be calculated

as a percentage of the eligible costs as may be

defined in the Guidelines incurred as from 1st

October 2012 of

(a)

20% for the restoration,

conservation or maintenance works on a

building used or to be used for a

commercial activity, falling within an

Urban Conservation Area;

(b) 30% for the restoration,

conservation or maintenance works on a

building used or to be used for a

commercial activity, that is a Grade 1 or

Grade 2 scheduled building.

(2) The intensity of the tax credit shall

be in accordance with the terms and

conditions of the Guidelines

Provided that this benefit shall be

calculated on the eligible costs incurred as

from the 1st October 2012

Provided further that the total amount of

the tax credit that may be granted in terms of

this regulation shall not exceed

(a)

twenty

thousand

euro

(€20,000) for restoration, conservation

or maintenance works on a building

used or to be used for a commercial

activity, falling within an

Urban

Conservation Area;

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(b) thirty

thousand

euro

(€30,000) for restoration, conservation

or maintenance works on a building

used or to be used for a commercial

activity, that is a Grade 1 or Grade 2

scheduled building.

(3) The tax credit referred to in this

regulation shall be due as a deduction from

tax payable by an undertaking on its

chargeable income derived from its trade or

business for that year of assessment

commencing on the 1st January of the year

immediately following the year in which the

eligible costs are incurred, and where the tax

credit, for that year of assessment, exceeds the

income tax payable by such undertaking for

that year, the excess in the tax credit shall be

allowed to be carried forward to the

subsequent year of assessment and deemed to

be a tax credit for that year

Provided that a tax credit shall not give

rise to a right to a refund of tax.

(4) Where

an

undertaking

has

benefited from the provisions of this

regulation, the tax credit shall be deemed to

have relieved from tax so much of that

undertaking’s chargeable income which, when

multiplied by the rates of tax at which it was

chargeable in that year, is equal to the tax

credit on the investment; and where such

undertaking or any subsequent company

distributes the income which is so deemed to

have been relieved from tax, such undertaking

or undertakings shall state in the dividend

warrant pertaining to any such distribution

that such income has been relieved from tax

by a tax credit in accordance with this

regulation; and the tax which has so been

relieved shall not be available for refund for

any purpose of the Income Tax Act.

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(5) (a)

The chargeable income

which is deemed to have been relieved from

tax in accordance with sub-regulation (4)

shall, for the purposes of the Income Tax Act,

be allocated to the Final Taxed Account of the

company in question and any dividends, or

part thereof, distributed from such income

shall be exempted from income tax in the

hands of the members of the company on

receipt of such distribution.

(b) Where a dividend referred to

in paragraph (a) is distributed to a member

which is also a company, in this sub-

regulation referred to as ''the second

company'', the said dividend shall likewise be

distributed by the second company to its

members in the form of dividends exempt

from income tax in the hands of the

recipients, and where a member of the second

company is again a company, the preceding

provisions shall apply mutatis mutandis as

though references to the first company were

references to the second company, and as

though references therein to the second

company were references to that member, and

the principle set out in this sub-regulation

shall continue to be applied for as long as

such income or part thereof to which this

regulation applies are distributed by way of

dividends.

(1) When the Corporation is

Tax credits to

undertakings

satisfied that an undertaking carrying on or

for digital

applications

intending to carry out a commercial activity

development.

that may contribute to the economic

development of Malta, requires assistance for

digital applications development as may be

specified in the Guidelines, the Corporation

may provide such an undertaking with a tax

credit to be calculated as a percentage of the

eligible costs as may be defined in the

Guidelines incurred as from 1st October 2012

of 100% for the subcontracted development

of a single digital game project that serves as

a promotional tool and informs users about

the undertaking’s products or services in

accordance with the terms and conditions as

may be set in the Guidelines.

(2) The intensity of the tax credit shall

be in accordance with the terms and

conditions of the Guidelines

Provided that this benefit shall be

calculated on the eligible costs incurred as

from the 1st October 2012

Provided further that the total amount of

the tax credit that may be granted in terms of

this regulation shall not exceed fifteen

thousand euro (€15,000).

(3) The tax credit referred to in this

regulation shall be due as a deduction from

tax payable by an undertaking on its

chargeable income derived from its trade or

business for that year of assessment

commencing on the 1st January of the year

immediately following the year in which the

eligible costs are incurred, and where the tax

credit, for that year of assessment, exceeds the

income tax payable by such undertaking for

that year, the excess in the tax credit shall be

allowed to be carried forward to the

subsequent year of assessment and deemed to

be a tax credit for that year

Provided that a tax credit shall not give

rise to a right to a refund of tax.

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(4) Where

an

undertaking

has

benefited from the provisions of this

regulation, the tax credit shall be deemed to

have relieved from tax so much of that

undertaking’s chargeable income which, when

multiplied by the rates of tax at which it was

chargeable in that year, is equal to the tax

credit on the investment; and where such

undertaking or any subsequent company

distributes the income which is so deemed to

have been relieved from tax, such undertaking

or undertakings shall state in the dividend

warrant pertaining to any such distribution

that such income has been relieved from tax

by a tax credit in accordance with this

regulation; and the tax which has so been

relieved shall not be available for refund for

any purpose of the Income Tax Act.

(5) (a)

The chargeable income

which is deemed to have been relieved from

tax in accordance with sub-regulation (4)

shall, for the purposes of the Income Tax Act,

be allocated to the Final Taxed Account of the

company in question and any dividends, or

part thereof, distributed from such income

shall be exempted from income tax in the

hands of the members of the company on

receipt of such distribution.

B B 4712

(b) Where a dividend referred to

in paragraph (a) is distributed to a member

which is also a company, in this sub-

regulation referred to as ''the second

company'', the said dividend shall likewise be

distributed by the second company to its

members in the form of dividends exempt

from income tax in the hands of the

recipients, and where a member of the second

company is again a company, the preceding

provisions shall apply mutatis mutandis as

though references to the first company were

references to the second company, and as

though references therein to the second

company were references to that member, and

the principle set out in this sub-regulation

shall continue to be applied for as long as

such income or part thereof to which this

regulation applies are distributed by way of

dividends.''.

€0.63