Since the start of the COVID-19 pandemic, the Government announced additional measures to alleviate the financial burden brought about by this pandemic. Malta Enterprise has been entrusted with the processing of most of the applications related to various measures introduced to mitigate the impact COVID-19.
Tax Related Incentives
The following tax related incentives have been introduced in Malta:
- A tax deferral scheme applicable to Provisional tax, Employee taxes, maternity fund payments and social security contributions, social security contributions of self-employed persons and Value Added Tax due between the period between August 2020 and December 2021 may be settled after May 2022. Businesses experiencing a significant downturn in turnover had the opportunity to apply for such derogation by the 15 May 2021.
- Reduction of stamp duty on immovable property. The stamp duty rate on the purchase of immovable property was reduced from 5% to 1.5% on contracts signed by August 2021 on the first €400,00 of the consideration or market value of the property.
- The Final Tax due by sellers of property under development or those contracts made by 31 March 2021 was reduced from 8/10% to 5%.
- The first time buyers scheme was modified for all contracts after 9 June 2020, unless a person has benefitted from the scheme since 2013.
The following grants have been introduced in reaction to the COVID-19 pandemic:
- A one-off lump sum grant of €350 to employers having staff on mandatory quarantine leave. Employers may request a grant of €350 in respect of any member of staff who have/had to take mandatory quarantine leave. Applications need to be submitted within 30 days from the start of the quarantine of the individual.
- Grants ranging between €100 and €800 per employee to certain businesses on the wage cost. As from January 2021 the grant will be calculated on the decrease in sales as declared in the VAT returns of the company.
- A grant of up to €2,500 on the rent paid by qualifying businesses for applications filed before the 14 October 2020. This scheme is being extended to cover those businesses who were also ordered to close in 2021 by granting a further grant equivalent to 50% over and above the rent assistance provided for in 2020.
- A grant of up to €1,500 covering 50% of the electrical power costs covering any period in July, August and September 2020 for applications filed before the 30 September 2020. This scheme is being reissued in 2021 and will cover the months of June, July and August 2021.
- Grant of up to €5,000 to businesses embarking on a reengineering exercise with approved companies. This incentive shall be available until the 31 December 2023.
- A cash grant of €1,000 for those businesses that remained closed beyond 10 May 2021.
Other measures introduced which seek to support economic growth are as follows:
- A refund of 33% in port charges for those ships that bring cargo to Malta in order to support the supply chains of the economy. A 10% refund will also be given on container discharge fees for import and export but not transhipment.
- Up to 80% refund of the costs incurred by businesses participating in international fairs which where cancelled.
- Export credit guarantees to enterprises venturing into new markets.
- Assistance to small and medium-sized companies employing less than 50 to up-skill their workforce. Further information, guidelines and applications are still to be made available.
- Possibility of converting micro-invest tax credit into a cash grant giving the opportunity to businesses struggling for cash to forego their tax credit for a cash grant. A maximum support of €200,000 to enterprises in the construction industry opting to modernise their equipment. Furthermore, the periods for the utilisation of certain tax credits issued under the Micro Invest Scheme may be extended for 3 years.
- A funding mechanism to public, academic and private entities under R&D on COVID-19 with outcomes not only addressing innovative and/or improved approaches related to the current pandemic, but also potential future waves and other antiviral relevant research. Eligible projects, including those projects having received a COVID-19 specific Seal of Excellence, are those projects that have started on or after 1 February 2020, but not later than 31 December 2020. The duration of the project should be a maximum of 18 months.
- A Restart Incentive Scheme is being launched to support enterprises who faced serious challenges to their going concern. Enterprises will be offered the possibility to engage a professional business advisor. The scheme will finance advisory costs for up to €5,000 which could be increased to €10,000 to also support the implementation phase of the new business initiative.
- Incisive aid intensity in the form of a cash grant of up to €50,000 and additional 20% support in form of tax credits will be given to companies who opt to invest in new economic niches which are in line with the European Green Deal.