Research and Development (2024) Regulations, 2024

L.N. 53 of 2024

MALTA ENTERPRISE ACT

(CAP. 463)

Research and Development (2024) Regulations, 2024

IN EXERCISE of the powers conferred by article 5 of the Malta

Enterprise Act, the Minister responsible for Malta Enterprise, with the

concurrence of the Minister responsible for finance, has made the

following regulations:-

(1) The title of these regulations is the Research and

Development (2024) Regulations, 2024.

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

on 1st January 2024.

In these regulations, unless the context otherwise requires

"Act" means the Malta Enterprise Act;

"aid intensity" means the gross aid amount expressed as a

percentage of the eligible costs before any deduction of tax or

other charge;

"Corporation" means Malta Enterprise as established by

article 7 of the Act;

"eligible costs" means that expenditure that may qualify for

assistance in terms of these regulations and as shall be further

established in the Guidelines;

"experimental development" shall have the same meaning

as assigned to it in 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 from time to time;

"Guidelines" means such Guidelines as may be published

by the Corporation from time to time in terms of the Act,

establishing the parameters of implementing the aid granted by

virtue of these regulations;

"industrial research" shall have the same meaning as

assigned to it in 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 from time to time;

"undertaking" shall have the same meaning as assigned to it

in the Act.

Where the Corporation is satisfied that an undertaking Assistance to

requires assistance to carry out a project for the execution of undertakings

carry out a

experimental development and, or industrial research, the Corporation research

activity.

may assist such an undertaking by means of a tax credit or a cash grant

or a combination thereof, as a percentage of the eligible costs in

accordance with the terms and conditions set out in the Guidelines.

The assistance provided shall not exceed eighty per cent Aid intensity.

(80%) of the eligible costs. The Corporation shall establish the aid

intensity in the Guidelines based on the aid intensities established in

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 from

time to time.

(1) An undertaking benefiting from tax credits in Utilisation of

accordance with these regulations and the respective Guidelines shall tax credits.

be entitled to deduct from the amount of income tax which is due on its

chargeable income derived from its trade or business in the year of

assessment immediately following the granting of the tax credit, an

amount equivalent to the tax credits granted.

(2) An undertaking that in any year of assessment does not

utilise any tax credit granted to it or deducts a value from the amount

of income tax which is due on its chargeable income derived from its

trade or business that is less than the tax credit granted to it, may carry

forward the unutilised tax credit for the subsequent years of

assessment.

(3) Tax credit granted in accordance with these regulations and

the respective Guidelines shall not give rise to a right to a refund of

tax.

(4) Where an undertaking has benefited from a tax credit

granted in accordance with these regulations, the tax credit shall be

deemed to have relieved from tax that part of the 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, 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 shall state in the dividend warrant

pertaining to any such tax distribution that such income has been

relieved from tax by a tax credit in accordance with this regulation.

(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 be, for the purposes of the

Income Tax Act, allocated to the respective tax accounts of the

company in question in accordance with the Tax Accounts (Income

Tax) Rules 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 also 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 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) Tax credit shall not be due to any undertaking under this

regulation unless it is claimed in the appropriate section of a tax return

submitted by not later than the relative tax return.

(1) The Corporation shall establish in its Guidelines a

deadline for the submission of applications for assistance.

(2) Assistance shall not be granted in accordance with these

regulations by the Corporation after the 31st December 2026.

In the eventuality that a new scheme is issued, the provisions

in respect of which the assistance was granted prior to the issuance of

the new scheme shall continue to apply thereto.

€0.27