MICRO INVESTMENT REGULATIONS

MICRO INVESTMENT

SUBSIDIARY LEGISLATION 463.09

MICRO INVESTMENT REGULATIONS

3rd June, 2014

LEGAL NOTICE 187 of 2014, as amended by Legal Notice 36 of 2016,

and 140 of 2017, 121 of 2018, 444 of 2020, 211 of 2021, 81 and 324 of

2024.

The title of these regulations is the Micro Investment

Regulations.

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;

"family business" shall have the meaning assigned to it by the

Family Business Act;

"female owned undertaking" means a female owned undertaking

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;

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

in the Commission Regulation (EU) 2023/2831 of 13 December 2023

on the application of Articles 107 and 108 of the Treaty on the

Functioning of the European Union to de minimis aid ;

"undertaking" means any entity engaged in an economic activity

regardless of its legal form or the way it is financed. Where legally

distinct natural or legal persons constitute an economic unit, which is

the case when they have a common source of control, they are to be

considered as a single undertaking.

(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 the total amount of tax credits that may be

granted in terms of this regulation shall not exceed fifty thousand euro

(€50,000) over any period of three (3) consecutive years under the

terms and conditions specified in the guidelines

Provided further that undertakings established in Gozo,

female owned undertakings and family businesses as may be defined

in the guidelines, may be granted a total amount of tax credits in terms

of this regulation that shall not exceed seventy thousand euro

(€70,000) over any period of three (3) consecutive years, under the

terms and conditions specified in the guidelines;

MICRO INVESTMENT

Provided further that the total amount of de minimis aid

awarded to a single undertaking before or on 31 st December 2023 may

not exceed two hundred thousand euro (€200,000), or one hundred

thousand euro €100,000) in case of undertakings performing road

freight transport for hire or reward, over any period of three (3)

consecutive fiscal years. The total amount of de minimis aid awarded

to a single undertaking after 31 st December 2023 may not exceed three

hundred thousand euro (€300,000) over any period of three (3)

consecutive years.

(2) Without prejudice to any further restrictions imposed by the

Corporation in the Guidelines, 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)

Provided that as from 1 st January 2018, in order to qualify for

the benefit under sub-regulation (1), the undertaking shall not employ

more than fifty full-time employees, in its trade or business.

(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 established in accordance with the terms and conditions

set out in the Guidelines, 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

Provided further that any tax credits shall be utilized by the

year of assessment established in accordance with the terms and

conditions set out in the Guidelines.

(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; 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 respective tax accounts of the company

MICRO INVESTMENT

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 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) No assistance in accordance with these regulations shall be

granted by the Corporation on costs incurred after 31st December

2025. No aid shall be granted by the Corporation in accordance with

these regulations after 31st December 2027.