Financial Incentives for the Audiovisual Industry Regulations, 2023

L.N. 17 of 2023

MALTA FILM COMMISSION ACT

(CAP. 478)

Financial Incentives for the Audiovisual Industry Regulations, 2023

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

of the Malta Film Commission Act, the Minister responsible for the

film industry, after consultation with the Minister responsible for

finance, has made the following regulations:-

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

commencement.

Incentives for the Audiovisual Industry Regulations, 2023.

(2) These regulations shall be deemed to have come into force

on the 1st January 2023.

(1)

In these regulations, unless the context otherwise Interpretation.

"Act" means the Malta Film Commission Act;

"certificate of provisional approval" means the certificate

issued in terms of regulation 5 following receipt of relevant

application and supporting documentation and duly assessed in

accordance with the relevant Guidelines;

"Commission" means the

Malta

Film

Commission

established by article 3 of the Act;

"Commissioner" means the Malta Film Commissioner

appointed under article 5(1) of the Act;

"completion" means the termination of filming activity,

animation or VFX together with post-production in Malta of an

audiovisual production, and "completed" shall be construed

accordingly;

"co-production" means a qualifying production which is the

subject of a co-production agreement between two (2) or more

co-producers;

"difficult audiovisual works" means an audiovisual

production as established by the Commissioner in accordance

with the Guidelines;

"eligible expenditure" means the items of expenditure

incurred by the qualifying company in relation to the qualifying

production that are eligible as established by the Commissioner

in accordance with the Guidelines;

"EU Member State" means a Member State of the European

Union in accordance with the European Union Act;

"final approval" means the approval granted in terms of

regulation 7;

"financial incentive" means the financial benefit provided

for in regulation 3;

"Guidelines" means the guidelines that may be issued by

the Commission from time to time;

"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 or the commencement of animation or VFX

work partially or wholly completed together with post

production in Malta;

"qualifying company" means the entity responsible for all

activities involved in making a qualifying production and having

access to full financial information for the total production

worldwide, which shall be made available to the Commissioner

upon the his request. Where the qualifying production is a co-

production, the co-producers shall appoint one (1) of the co-

producers amongst them to act as the qualifying company in

respect of the qualifying production for the purposes of these

regulations and the appointed co-producer shall be deemed to be

the entity responsible for all activities involved in making the

qualifying production

Provided that

(1) there shall be only one (1) qualifying company

with respect to a particular qualifying production;

(2) in the case of a co-production, the financial

incentive granted shall be apportioned between the co-

producers as agreed between them, or in the absence of any

agreement to that effect, in proportion to their share in the

overall budget of the qualifying production; and

(3) any co-producers shall be jointly and severally

liable for their obligations under the Act and these

regulations

Provided further that when the qualifying company

(1) a foreign qualifying company, it shall be either

a special purpose corporate vehicle or a company which

carries on, or intends to carry on in Malta, a trade or

business which is considered as a qualifying production; or

(2) a local qualifying company, it shall be either a

special purpose vehicle or a company that is duly registered

in Malta as an audiovisual production company and intends

to produce a qualifying production as its main purpose and

activity;

"qualifying production" means an audiovisual production

that meets the conditions established in article 25 of the Act, the

Schedule to the Act and the Guidelines which the Commissioner

may publish from time to time;

"Regulation No 651/2014" means Commission Regulation

(EU) No 651/2014 of 17 June 2014 declaring certain categories

of aid compatible with the internal market in application of

Articles 107 and 108 of the Treaty, as amended, and as may be

subsequently amended;

"State Aid Monitoring Board" means the State Aid

Monitoring Board constituted under article 57 of the Business Cap. 325.

Promotion Act;

"undertaking" means an entity carrying out an economy

activity;

"VFX" means visual effects.

(2) The words and expressions which occur in the Act shall,

unless otherwise defined in these regulations, have the same meaning

as assigned to them in the Act.

(1) A rebate of up to forty percent (40%) of eligible Financial

expenditure may be given as a cash grant, which shall be exempt for incentives.

the purpose of the Income Tax Act, to qualifying companies upon Cap. 123.

completion of a qualifying production, in accordance with these

regulations and the Guidelines

Provided that identifiable eligible costs claimed under any

other publicly funded scheme in Malta, shall not be claimed under this

scheme

Provided further that the total State aid from which a

qualifying production may benefit under this regulation, or any other

source shall not exceed the ceiling provided for in the Guidelines.

(2) The level of financial incentive shall be determined by the

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

these regulations and the Guidelines.

(3) Notwithstanding the provisions of sub-regulation (1),

rebates of up to fifty percent (50%) of eligible expenditure for difficult

audiovisual works may be given as a cash grant, which shall be exempt

for the purpose of the Income Tax Act, to qualifying companies, upon

completion of a qualifying production, in accordance with these

regulations and the Guidelines.

(4) The maximum aid incentives outlined in sub-regulations

(1) and (3) shall also apply for co-productions.

(1) The application for the financial incentive shall be

submitted to the Commissioner by the qualifying company or its local

branch or agent in accordance with the Guidelines.

(2) The application specified in sub-regulation (1) shall be

submitted together with such documentation and information as may

be required by the Commissioner and shall include any documents and

information listed in the Guidelines.

(3) The application shall be submitted at least thirty (30)

working days before the planned commencement of the qualifying

production in Malta

Provided that if the application is submitted less than thirty

(30) working days before the commencement of the qualifying

production in Malta, it may only be accepted at the discretion of the

Commissioner.

(1) Following the receipt of the application in accordance

with regulation 4, the Commissioner shall complete an assessment of

this application within thirty (30) working days after which a

certificate of provisional approval shall be issued

Provided that where the Commissioner requests additional

information in respect of the application, the thirty (30) working days

shall resume after the relevant information has been received.

(2) In case of any changes to the application presented for

provisional approval, the Commissioner shall be informed prior to the

final approval.

(1) Where, after the submission of the application for Significant

provisional approval, the budget of the Malta spend and estimated budget changes.

eligible expenditure as indicated in the provisional certificate,

increases by over ten percent (10%) of the original estimations prior to

the final completion of the submission, the Commissioner shall be

informed in writing immediately of such changes.

(2) If it becomes apparent that the threshold has been

exceeded, the Commissioner reserves the right to award the final

incentive on not more than ten percent (10%) over and above the

overall qualifying expenditure, as outlined in the provisional

certificate.

(3) For the purpose of this regulation, if further allowances are

made which are found to be justifiable, said shall be made solely at the

discretion of the Commissioner.

(1) Upon completion of the qualifying production in Final approval.

respect of which a certificate of provisional approval was issued in

accordance with regulation 5, the qualifying company shall submit its

final submission detailing expenses of the qualifying production where

a benefit is being sought as outlined in the Guidelines. A full audit of

expenses shall be carried out by an auditor.

(2) The submission mentioned in sub-regulation (1) 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 receipt of the final submission made in

accordance with sub-regulation (1) and (2), the Commissioner shall

issue a final certificate.

(1) The qualifying company shall ensure compliance Obligations of

with the conditions and requirements set out in the certificate of the

company.

provisional approval and, or the final certificate and in the Guidelines.

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

to meet any of the conditions and requirements as referred to in sub-

regulation (1), the Commissioner may withdraw its provisional or final

approval for the grant of the financial incentive. If the qualifying

company has already received the financial incentive and the

Commissioner establishes that the conditions and requirements as

referred to in sub-regulation (1) have not been complied with, it shall

refund the Commissioner the amount of the financial incentive

received upon the Commissioner's request.

When the financial incentive has been provided in terms of

these regulations to an undertaking, the Commissioner may

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

examination of books, accounts, documents, premises, and all

other things 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, of the Guidelines, and the provisional approval

on which a certificate was issued are complied with; and

(2) request such financial statement 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 ten (10)

years, a database of all the financial incentives provided to, or claimed

by, undertakings in terms of these regulations so the Commission may

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

regulations have been complied with; and

(2) provide the State Aid Monitoring Board with such

information as it may require.

These regulations shall apply to audiovisual productions in

respect of which the aid was granted by 31st December 2023.

The Financial Incentives for the Audiovisual Industry

Regulations are hereby repealed without prejudice to anything done or

omitted to be done thereunder.

€0.54