Malta Tax Credit Schemes - Eligibility Criteria, Exclusions and Qualifying Costs
Small and medium sized businesses and self-employed individuals form the backbone of most economies. In order to incentivise growth of these businesses and provide assistance to self-employed individuals, there are specialised Malta tax credit schemes being offered by Malta Enterprise, to encourage businesses and individuals to innovate, expand, invest and develop their operations. Eligible enterprises can benefit from a tax credit of up to €25,000 for the duration of the incentive.
The MicroInvest scheme, which runs until 31 March 2012, shall be eligible to all micro enterprises including micro start ups and must satisfy the following criteria cumulatively:
- The enterpise must not employ more than nine (9) persons full time;
- The annual turnover of the enterprise must no exceed EUR 2 million;
- Enterprises should be registered with the VAT Department and in possession of regulatory licences and permits where applicable;
- Applicants must have paid all VAT, income tax and social security dues, if any
The incentive will not apply to the following:
- Aid granted to undertakings active in the fishery and aquaculture sectors;
- Aid granted to undertakings in the primary production of agricultural products;
- Aid to export-related activities toward third countries or Members States, namely aid directly linked to the quantities exported, to the establishment and operation of a distribution network or to other current expenditure linked to the export activity;
- Aid contingent upon the use of domestic over imported goods;
- Aid granted to undertakings in difficulty
Applicable enterprises may be eligible for a tax credit of up to 40% of eligible expenditure, up to a maximum of €25,000. Enterprises based in Gozo (Malta) shall be eligible for up to 60% of eligible expenditure, up to the same capping of €25,000.
Eligible costs include:
- Investments in refurbishing and upgrading of business premises;
- Investment in machinery, technology, apparatus and plant to enhance operations, reduce energy expenditure;
- Investment required for compliance of Health and Safety regulations;
- Investment in one motor vehicle used for the carrying of goods;
- Wages covering a 12 month period.
Conversely, the follows costs are excluded:
- Purchase of land and/or property;
- Acquisition of works of art, antiques and assets not directly related to the trade and business of applicant;
- Costs that are assisted (even partly) through other incentive measures.
Effectively, the microinvest tax credit helps to further incentivise investment in Malta, by complementing the already highly attractive tax treatment applicable to Maltese companies.
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