RESEARCH AND DEVELOPMENT ACTIVITIES [ S.L. 463.17 1 SUBSIDIARY LEGISLATION 463.17 RESEARCH AND DEVELOPMENT ACTIVITIES REGULATIONS 1st January, 2017 LEGAL NOTICE 166 of
- The title of these regulations is the Research and Development Activities Regulations. Citation.
- requires: Interpretation. In these regulations, unless the context otherwise "the Act" means the Malta Enterprise Act; Cap.
- "the Corporation" means Malta Enterprise established under the Act; "the Guidelines" means such guidelines as may be published by the Corporation from time to time in terms of the Act; "Small and Medium Sized Enterprises" (SMEs) shall having the meaning attributed to it by Annex I of 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; The terms "Large Enterprises", "Fundamental Research", "Experimental Development", "industrial research", "highly qualified personnel" and "research and knowledge-dissemination Organisation" shall have the meanings attributed to them by 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; "Research and Development activity" is any activity that constitutes experimental development and/or industrial research as may be further described in the Incentive Guidelines.
- Where the Corporation is satisfied that an undertaking has carried out a Research Activity the Corporation may assist such an undertaking by means of a tax credit in accordance with the terms and conditions set out in the Guidelines. Tax Credits to support undertakings carry out a Research Activity. 4.
(1)Where the Corporation is satisfied that an undertaking requires assistance to carry out a project for the development of products, services or processes that necessitates the execution of experimental development and/or industrial activities, Assistance to support undertakings carry out a Research Project 2 [ S.L. 463.17 RESEARCH AND DEVELOPMENT ACTIVITIES the Corporation may assist such an undertaking by means of a tax credit or a cash grant as a percentage of the eligible costs incurred by such undertaking in relation to the experimental development and/or industrial activities and in accordance with the terms and conditions set out in the Guidelines.
(2)This assistance may be provided only if the project together with the relative costs have been approved a priori in writing by the Corporation. Assistance for feasibility studies. 5.
(1)Where the Corporation is satisfied that an undertaking requires assistance to carry out feasibility studies in preparation for an industrial research or an experimental development activities, the Corporation may assist such an undertaking by means of a cash grant as a percentage of the eligible costs incurred by such an undertaking in accordance with the terms and conditions set out in the Guidelines.
(2)This assistance may be provided only if the feasibility studies with the relative costs have been approved a priori in writing by the Corporation. Tax credits for SME for the loan of highly qualified personnel. 6. Where the Corporation is satisfied that an SME requires assistance for the loan of highly qualified personnel from large undertakings or a Research and Knowledge-dissemination Organisations, the Corporation may assist such an undertaking by means of a tax credit in accordance with the terms and conditions set out in the Guidelines. Utilisation of Tax Credits. 7.
(1)An undertaking benefiting from tax credits in terms of these regulations and the respective Guidelines shall 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 years of assessment following the award of the benefit an amount equivalent to the Tax credit awarded.
(2)An undertaking that in any year of assessment does not utilise any tax credit awarded 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 awarded shall carry forward the unutilised tax credit for the following years of assessment and so on for subsequent years.
(3)Tax credits awarded in terms of these regulations and the respective Guidelines shall not give rise to a right to a refund of tax. RESEARCH AND DEVELOPMENT ACTIVITIES [ S.L. 463.17
(4)When an undertaking has benefited from the provisions of these regulations, 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 or any subsequent undertaking 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 these regulations; and the tax which has so been relieved shall not be available for refund for any purpose of the Income Tax Act.
(5)(
- a)The chargeable income which is deemed to have been relieved from tax in accordance with these regulations shall, for the purposes of the Income Tax Act, be 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. Cap. 123. Cap. 123. (
- b)Where the dividend referred to in subregulation
(4)is distributed to a member which is also a company (hereinafter referred to a s "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)No tax credit shall be due to an undertaking under these regulations for a year of assessment unless it is claimed in the appropriate section of a tax return submitted.
- The provisions of Assistance for Research and Development and Innovation Regulations shall remain applicable for assistance awarded by the Corporation prior to the coming into force of these regulations. Transitional Provision. S.L. 463.
- Applications for assistance under these regulations shall reach the Corporation by not later than the 31st December,
- Deadline for submission of applications for assistance. 3