← Malta

L.S. 463.02 Regolamenti dwar Għajnuna għall-Investiment

[ S.L.463.02 INVESTMENT AID 1 SUBSIDIARY LEGISLATION 463.02 INVESTMENT AID REGULATIONS 1st January, 2008* LEGAL NOTICE 68 of 2008, as amended by Legal Notices 169 of 2012 and 212 of

  2. The title of these regulations is the Investment Aid Regulations.
  3. In these regulations, unless the context otherwise requires: "the Act" means the Malta Enterprise Act; Citation. Interpretation. Cap.
  4. "the Corporation" means the Malta Enterprise Corporation established under the Act; "disadvantaged or disabled person" has the meaning assigned to it by the Guidelines; "Guidelines" means such guidelines as may be published by the Corporation from time to time in terms of the Act; "large undertaking", "medium-sized undertaking", "small undertaking" and "micro undertaking" shall have the meaning attributed to them by Commission Recommendation 2003/361/EC; "qualifying expenditure" means that expenditure that may qualify for assistance in terms of these regulations and in accordance with the Guidelines; "undertaking" means an undertaking as defined in the Act except for the purposes of regulations 4 and 6 where undertaking shall mean: (a) a partnership constituted under the Companies Act, being a partnership en nom collectif, en nom commandite or a limited liability company; or Cap.
  5. (b) a body of persons constituted, incorporated or registered outside Malta, and of a nature similar to the aforesaid partnerships and registered as an oversea company in accordance with the Companies Act; or Cap.
  6. (c) a co-operative society duly registered as such under the Co-operative Societies Act. Cap.
  7. 3.

(1)A qualifying activity in terms of these regulations shall be an economic activity consisting of a trade or business the profits or gains from which are chargeable to tax pursuant to article 4
(1)(
  1. a)of the Income Tax Act, carried on or intended to be carried out by an undertaking in Malta which consists solely of any one or more of the following activities: (
  2. a)(
  3. i)the production, manufacture, improvement, assembly, preservation, processing of goods, *see regulation 1
(2)of these Regulations as originally promulgated. Qualifying activities. Substituted by: L.N. 169 of 2012. Cap. 123. 2 [ S.L.463.02 INVESTMENT AID (
  1. b)(
  2. c)(
  3. d)(
  4. e)(
  5. f)(
  6. g)(
  7. h)(
  8. i)(
  9. j)(
  10. k)Cap. 334. (
  11. l)materials, commodities, equipment, plant, machinery; (
  12. ii)the rendering of industrial services analogous to the activities referred to in subparagraph (i); (iii) the repair, overhaul or maintenance of pleasure crafts, yachts not having more than thirty berths, aircraft, engines or equipment incorporated or used in such vessels or aircraft; Information and Communications Technology (I.C.T.) developmental and related activities as may be prescribed in the Guidelines, but excluding telecommunications service providers and operators of online casinos and similar activities; call centres activities as may be prescribed in the Guidelines; research, development, and innovation of products and processes as may be prescribed in the Guidelines; eco-innovations, waste treatment and environmental solutions as may be prescribed in the Guidelines; biotechnology as may be prescribed in the Guidelines; formulation, development, manufacturing and preparation and packaging of pharmaceuticals as may be prescribed in the Guidelines; the development and production of audiovisual products and, or the operation and provision of facilities directly required for the development and production audiovisual products as may be prescribed in the Guidelines; the provision of private tertiary education as further defined in the Guidelines where the investment and number of jobs created exceeds the minimum parameters as may be prescribed in the Guidelines; the provision of private health-care services as further defined in the Guidelines where the investment and number of jobs created exceeds the minimum parameters as may be prescribed in the Guidelines; the provision of logistics services that include part transformation that adds value by an undertaking employing not less than two hundred and fifty fulltime employees or their equivalent as may be prescribed in the Guidelines; activities set out in article 11 of the Malta Freeports Act; (
  13. m)the provision of shared regional or global management and services as may be further defined in the Guidelines. Provided that such undertaking: (
  14. i)is established in Malta after 1st January 2012; (
  15. ii)exceeds the minimum value of investment and jobs created as may be prescribed in the INVESTMENT AID [ S.L.463.02 Guidelines; (
  16. n)the provision of knowledge intensive business services as may be further defined in the Guidelines. Provided that the undertaking: (
  17. i)is established in Malta after 1st January 2012; (
  18. ii)exceeds the minimum value of investment and jobs created as may be prescribed in the Guidelines; (
  19. o)the operation or management of a hotel or group of hotels as may be be prescribed in the Guidelines: Provided that notwithstanding the provisions of any other regulation, investment aid: (
  20. a)shall only be granted with regards to investment projects approved by the Corporation after 1st January 2012; (
  21. b)shall not exceed 15% of the qualifying expenditure incurred on an approved investment project: Provided also that an undertaking shall not qualify for any of the benefits provided by these regulations if: (
  22. a)the undertaking sells by retail and, for this purpose, an undertaking shall be deemed not to sell by retail if its sales of goods or services are made: (
  23. i)to a person who carries on a trade and the goods or services so sold to such person are either resold by such person or are used by such person for the purpose of his trade; or (
  24. ii)to a person, other than an individual, who uses those goods or services for the purpose of an undertaking carried on by such person; or (iii) to a person through e-commerce activities resulting in online transactions effected by means of a secure payment system; or (
  25. iv)such undertaking is a small sized undertaking that sells solely goods manufactured by the same undertaking; (
  26. b)the undertaking’s trade or business includes any one of the following activities: (
  27. i)dividing, sorting, packaging, mixing without changing the character of the good, drying, labelling, or other similar processes or any combination of such processes to goods which are acquired in bulk merely to prepare those goods for sale or distribution, excluding goods in respect of which the said undertaking carries on any other activity referred to in paragraph (
  28. a)of this regulation; (
  29. ii)the assembly of any goods where the Corporation determines that: 3 4 [ S.L.463.02 INVESTMENT AID 1. the final assembled good is clearly recognisable from the individual components or parts from which it is assembled without regard being had to any exterior casing of the good; and 2. the components and parts from which the good is assembled are such that the good is nearly complete and the assembly work and the supervision of such assembly work only require the employment of almost exclusively unskilled workers, such that the assembly operation is of a spurious nature when considered in the light of manufacturing activities; (iii) without prejudice to any exception as may be provided in the Guidelines, the installation, commissioning or assembly of goods on site, where the said goods have not been manufactured by the undertaking which is installing, commissioning or assembling the goods on site: Provided that the provisions of this paragraph shall not be applicable to an undertaking which carries on only any one or more of the activities set out in paragraphs (
  30. b)to (
  31. j)of this regulation; (
  32. c)the trade or business includes the preparation or production of "food in the course of catering" which is directly supplied to the final consumer. Investment tax credit. 4.
(1)An undertaking carrying on or intending to carry out a qualifying activity in terms of regulation 3 that may contribute to the economic development of Malta shall, subject to the terms and conditions of the Guidelines, be entitled to an investment tax credit, which tax credit shall, with respect to an investment project be calculated either (
  1. a)as a percentage of the qualifying expenditure incurred by such undertaking in the year preceding the year of assessment in question; or (
  2. b)as a percentage of wage costs for jobs directly created by the investment project in accordance with the provisions of sub-regulations
(4)to
(7): Provided that the total amount of investment tax credits that may be granted in terms of this regulation for a specific investment project shall not exceed: (
  1. i)in the case of an undertaking which qualifies as a small undertaking, fifty per cent of the qualifying expenditure; (
  2. ii)in the case of an undertaking which qualifies as a medium undertaking, forty per cent of the qualifying expenditure; (iii) in the case of an undertaking which qualifies as a large enterprise, thirty per cent of the qualifying expenditure: INVESTMENT AID [ S.L.463.02 Provided further that in the case of large investment projects, the investment tax credit to be granted in terms of this sub-regulation shall never exceed: 1. fifteen per cent (15%) of the qualifying expenditure for that amount in excess of 50 million euro; and 2. ten point two per cent (10.2%) of the qualifying expenditure for that amount in excess of 100 million euro.
(2)In the case of an investment project that may make a substantial contribution to the economic development of Malta, the Corporation may convert the investment tax credit referred to in sub-regulation
(1)into other forms of assistance, including cash grants.
(3)For the purposes of this regulation the terms ‘tangible assets’ and ‘intangible assets’ shall have the meaning attributed to them in the Guidelines.
(4)The amount of investment tax credit based on job creation which an undertaking may claim in a year of assessment in terms of sub-regulation
(1)(b) shall be based on the wage cost incurred by that undertaking in the accounting period ending in the year preceding that year of assessment.
(5)An undertaking shall, subject to the terms and conditions of the Guidelines, be considered to have created a job as a result of an investment project for those individuals who are employed by the undertaking, if the job is directly connected with the activity to which the investment project relates and is created within three years from the completion of the investment project and as long as the employment of any such individual is not in replacement of another individual and provided that such employment is not terminated before the lapse of five years from the date of employment in the case of large undertakings and not before the lapse of three years from the date of employment in the case of small and medium sized undertakings: Provided that for the purpose of determining whether jobs have been created, individuals who are employed by the undertaking on a part-time basis shall be deemed to be a number of full-time employees as is produced by dividing the number of hours worked by such part-time employees by one thousand and seven hundred and sixty: Provided further that where the accounting period ending in the year preceding a year of assessment is more or less than twelve months, the number of hours worked by part-time employees shall be divided by an amount which shall be arrived at by dividing the amount of one thousand and seven hundred and sixty, by three hundred and sixty-five, and then multiplying the result by the number of days comprised in that accounting period.
(6)An undertaking which is entitled to an investment tax credit in respect of a year of assessment shall be entitled to deduct from the amount of income tax which is due on its chargeable income 5 6 [ S.L.463.02 INVESTMENT AID derived from its trade or business for that year of assessment the amount of the investment tax credit and, where the investment tax credit, for any year of assessment, exceeds the income tax payable by such an undertaking for that year, the excess shall be added to the investment tax credit for the following year and deemed to be part of that investment tax credit, or if there is no such investment tax credit for that year, be deemed to be the investment tax credit for that year and so on for subsequent years: Provided that so much of the investment tax credit which is not so utilised at the end of any year and which is therefore carried forward to be added to the investment tax credit of the following year of assessment and deemed to be the investment tax credit for that year, shall be increased by such rate as may be prescribed in the Guidelines; and where any part of the investment tax credit as so increased is again not utilised, so much of it as is not utilised shall be further increased by the said percentage and carried forward to the following year, and so on for subsequent years: Provided further a tax credit shall not give rise to a right to a refund of tax. Cap. 123.
(7)Where an undertaking has benefited from the provisions of this regulation, the investment 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 investment 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 an investment 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.
(8)Cap. 123. (a) The chargeable income which is deemed to have been relieved from tax in accordance with sub-regulation
(7)shall, for the purposes of the Income Tax Act, be allocated to the Final Taxed Account of the company in question 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 sub-regulation
(1)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 INVESTMENT AID [ S.L.463.02 7 continue to be applied for as long as such income or part thereof to which this regulation applies are distributed by way of dividends.
(9)Where for a year of assessment, an undertaking qualifies for a tax credit under the Business Promotion Act and also under the provisions of these regulations, it shall avail itself of the tax credit due under the Business Promotion Act before any set-off is made in respect of the tax credit due under these regulations. Cap. 325.
(10)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 by electronic means by not later than the relative tax return date.
  1. (Deleted by Legal Notice 169 of 2012). Employment of disadvantaged or disabled persons.
  2. (Deleted by Legal Notice 169 of 2012). Investment aid cash grants to Gozo based undertakings.
  3. Applications for assistance under these regulations shall reach the Corporation by not later than the 30th June,
  4. Final date for submission of applications for assistance under these regulations. Added by: L.N. 212 of 2015.

🔗 Għas-sors uffiċjali

AI explanation based on the official legal text. Indicative, not a substitute for legal advice.