Regulations, 2014

L.N. 187 of 2014

MALTA ENTERPRISE ACT

(CAP. 463)

Tax Credits for Micro Enterprises and the Self-Employed

Regulations, 2014

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

Malta Enterprise Act, the Minister for the Economy, Investment and

Small Business, in consultation with the Malta Enterprise

Corporation, has made the following regulations:-

The title of these regulations is the Tax Credits for Micro

Enterprises and the Self-Employed Regulations, 2014.

In these regulations, unless the context otherwise requires

"the Act" means the Malta Enterprise Act;

"the Corporation" means the Malta Enterprise established under

the Act;

"eligibile costs" means such costs as defined in the Guidelines;

"Guidelines" means such guidelines as may be published by the

Corporation from time to time in terms of the Act;

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

(1) Where the Corporation is satisfied that an

undertaking carrying out a trade or business requires assistance to

expand, innovate or invest in its business in Malta, the Corporation

may provide such an undertaking with a tax credit. The intensity of

the tax credit shall be in accordance with the terms and conditions set

out in the Guidelines

Provided that this benefit shall be calculated on the eligible

costs incurred as from 1st January 2014 till the 31st December 2020

Provided further that the total amount of tax credits that

may be granted in terms of this regulation shall not exceed thirty

thousand euro (€30,000) over any period of three consecutive years

under the terms and conditions specified in the Guidelines

Provided further that start-up companies established in

Gozo may be granted a total amount of tax credits in terms of this

regulation that shall not exceed fifty thousand euro (€50,000) over

any period of three consecutive years, under the terms and conditions

specified in the Guidelines.

(2) In order to qualify for the benefit under sub-regulation (1),

the undertaking

(a)

shall not employ more than thirty full-time

employees, or equivalent, in its trade or business; and

(b) shall have a turnover or annual balance sheet total

that does not exceed ten million euro (€10,000,000).

(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 undertaken, and, where the tax

credit, for that year of assessment, exceeds the income tax payable by

such an 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 the undertaking

is a company and 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)

In the case of an undertaking which is a company,

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 Cap. 123.

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 is 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.

(6) In case of a company, no tax credit shall be due to an

undertaking under this regulation unless it is claimed in the

appropriate section of a tax return submitted by electronic means by

not later that the relative tax return date.

(7) Applications for assistance under this regulation shall

reach the Corporation by not later than the 26th March 2021.

€0.27