SCREEN MALTA FINANCIAL INCENTIVES REGULATIONS

SUBSIDIARY LEGISLATION 478.06

SCREEN MALTA FINANCIAL INCENTIVES

REGULATIONS

14th June, 2024 *

LEGAL NOTICE 186 of 2024, as amended by Legal Notice 305 of

2024.

(1)

The title of these regulations is the Screen Malta

Financial Incentives Regulations.

(2)

The scope of these regulations is to provide for financial

incentives for qualifying productions, excluding reality programmes and

game shows.

(1)

In these regulations, unless the context otherwise

requires

"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 following the

due assessment in accordance with the relevant Guidelines;

"Commission" means the Malta Film Commission

established by article 3 of the Act;

"Commissioner" means the Film Commissioner

appointed in accordance with article 5(1) of the Act;

"completion" means the termination of filming activity,

animation, VFX or Virtual Production 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;

*Vide Regulation 2 of Legal Notice 305 of 2024.

SCREEN MALTA FINANCIAL INCENTIVES

"final approval" means the approval granted in

accordance with regulation 7;

"financial incentive"

means

the

financial

benefit

provided for in regulation 3;

"Guidelines" means the guidelines that may be issued by

the Commissioner from time to time;

"qualifying company" means the ultimate beneficiary

and the entity responsible for all activities involved in making a

qualifying production and having access to the full budget and

full financial information for the total production worldwide,

which shall be made available to the Commissioner upon 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

(a)

there shall be only one (1) qualifying

company with respect to a given qualifying production;

(b)

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

(c)

any co-producers shall be jointly and

severally liable for their obligations in accordance with

the Act and these regulations

Provided further that when the qualifying

company is

(i)

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

(ii)

a local qualifying company, it shall be

either a special purpose vehicle or a company that is duly

registered 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;

"State Aid Monitoring Board" means the State Aid

Monitoring Board constituted in accordance with article 57 of

the Business Promotion Act;

"undertaking" means an entity carrying out an economic

activity;

"VFX" means visual effects.

(2)

Without prejudice to the provisions of sub-regulation (1),

terms and expressions used in these regulations which are not herein

defined, shall unless the context otherwise requires, have the same

meaning assigned to them in the Act.

(1)

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

expenditure 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

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

following 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

provisional approval the expenditure budget of Malta and estimated

eligible expenditure as indicated in the provisional certificate,

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

completion and final 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 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 allowances shall be

made solely at the discretion of the Commissioner.

(1)

Upon completion of the qualifying production in

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-regulations (1) and (2), the Commissioner shall

issue a final certificate.

(1)

The qualifying company shall ensure compliance

with the conditions and requirements set out in the certificate of

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 his 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 to an

undertaking in accordance with these regulations, the Commissioner

may

(a)

from time to time make or cause to be made such

examination of books, accounts, documents, premises and all

other things appertaining to such 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

(b)

request such financial statements 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 accordance with these regulations in order that the

Commission may

(a)

verify whether the provisions of the Act and of

these regulations have been complied with; and

(b)

provide the State Aid Monitoring Board and the

European Commission with such information as they may

require.

Undertakings that are subject to an outstanding recovery

order following a previous Commission decision declaring an aid

illegal and incompatible with the internal market are excluded from

benefiting from assistance under this incentive.

These regulations shall apply to audiovisual productions

in respect of which the aid is granted by 29 th October 2028.