L.S. 463.40 Regolamenti dwar Għajnuna għall-Investiment 2021

(1)The title of these regulations is Investment Aid 2021 Regulations. Citation and applicability.

(2)These regulations shall apply in respect of an eligible initial investment in favour of carrying out of a qualifying economic activity.

1. requires: In these regulations, unless the context otherwise "Act" means the Malta Enterprise Act; Cap.
2. "aid intensity" means the gross aid amount expressed as a percentage of the eligible costs, before any deduction of tax or other charge; "Corporation" means established under the Act; the Malta Interpretation. Enterprise Corporation "guidelines" means the 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 Annex I of the 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; "relocation" means a transfer of the same or similar activity or part thereof from an establishment in one contracting party to the EEA Agreement (initial establishment) to the establishment in which the aided investment takes place in another contracting party to the EEA Agreement (aided establishment). There is a transfer if the product or service in the initial and in the aided establishments serves at least partly the same purposes and meets the demands or needs of the same type of customers and jobs are lost in the same or similar activity in one of the initial establishments of the beneficiary in the EEA; "start of works" means the earlier of either the start of construction works relating to the investment, or the first legally binding commitment to order equipment or any other commitment that makes the investment irreversible. Buying land and preparatory works such as obtaining permits and conducting feasibility studies are not 1 2 [ S.L. 463.40 INVESTMENT AID 2021 considered start of works. For take-overs, "start of works" means the moment of acquiring the assets directly linked to the acquired establishment; "undertaking" shall have the same meaning as assigned to it in the Act. Eligible projects. 3.

(1)The initial investment project shall be considered for support if the investment shall result in the development, expansion, diversification or a fundamental change in the carrying out of a qualifying economic activity.

(2)(

1. a)Cash grants may only be awarded to eligible projects for which an application is submitted and approved before Start of Works and during the validity of the scheme.       S.L. 463. 10. (
2. b)Projects starting before 1st January 2021 or having a start of works prior to the approval of the Corporation may only be awarded aid in the form of tax credits. Such projects shall only be considered where the activity was covered by the scheme implemented on the basis of the Investment Aid (July 2014) Regulations. (
3. c)Eligible investments projects only be awarded aid in respect of projects commencing after the 31st December 2021 but in no case later than 31st December 2023 or later if the Start of Works was delayed due to factors outside the control of the aid beneficiary as shall be determined by the Corporation, as long as the beneficiary submits an application for assistance and the aid in respect of such projects is approved by the Corporation during the validity of the scheme which in no case shall be later than 31st December 2021.

(3)The investment and the qualifying economic activity shall be retained in Malta for a minimum period of at least five years or three years in the case where the beneficiary is an SME, after completion of the investment project.

(4)The beneficiary is to provide a financial contribution of at least twenty-five per cent (25%) of the eligible costs, either through its own resources or by external financing, in a form, which is free of any public support.

(5)The applicant confirms that is has not carried out a relocation to the establishment in which the initial investment for which aid is requested is to take place, in the two

(2)years preceding the application for aid and gives a commitment that it will not do so up to a period of two

(2)years after completion of the initial investment for which aid is requested is completed. INVESTMENT AID 2021 [ S.L. 463.40 3 4. 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)(a) of the Income Tax Act, carried on or intended to be carried out by an undertaking in Malta which consists solely of one or more qualifying activity as may be prescribed in the guidelines. Qualifying activities.    Cap. 123. 5.

(1)An undertaking carrying on or intending to carry out a qualifying activity that may contribute to the economic development of Malta, shall be assisted by means of a tax credit (which may be claimed against future tax bills) or a cash grant calculated as a percentage of the qualifying expenditure subject to the terms and conditions of the guidelines. Form of assistance.

(2)Cash grants may only be awarded to eligible projects for which an application is submitted and approved before start of works.

(3)The assistance shall be calculated as a percentage of: (

1. a)the qualifying eligible expenditure as established in the guidelines incurred by an undertaking in respect of an eligible project for the carrying out of a qualifying activity; or (
2. b)wage costs for jobs directly created as a result of the eligible project as shall be further specified in the guidelines. 6.

(1)The amount of investment aid that may be awarded in terms of this regulation for a specific investment project shall not exceed: (

1. a)thirty per cent (30%) of the qualifying expenditure for an undertaking which qualifies as a "Small" undertaking; (
2. b)twenty per cent (20%) of the qualifying expenditure for an undertaking which qualifies as a "Mediumsized" undertaking; (
3. c)fifteen per cent (15%) in respect to initial investment projects carried out by "Small" and "Medium-sized" undertakings in the development of hotels, guest houses and their amenities as licensed by the Malta Tourism Authority. (
4. d)ten per cent (10%) of the qualifying expenditure for an undertaking which qualifies as a "Large" undertaking.

(2)For large undertakings the costs of intangible assets as defined in the guidelines are eligible only up to a limit of fifty per cent (50%) of the total eligible investment costs for the initial investment.

(3)The maximum aid amount for a large investment project shall be calculated as prescribed in the incentive guidelines. Aid intensities. 4 [ S.L. 463.40 INVESTMENT AID 2021 Utilisation of tax credits.

1. Any tax credits awarded may only be utilised by the beneficiary as long as the qualifying activity supported is still being carried out. The applicant shall give consent in his tax return to the Commissioner for Revenue to extract tax credits data from the Corporation. The Corporation shall annually provide the beneficiary with a statement of any tax credit balance until all allocated tax credits are utilised. Distribution and dividends. Added by: L.N. 390 of 2021. Amended by: L.N. 188 of 2024.          Cap.
2. 8.

(1)Where an undertaking has benefited from the provisions of regulations 5 and 6, 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 regulations 5 and 6 and that tax which has so been relieved shall not be available for refund for any purpose of the Income Tax Act.    Cap. 123.   

(2)The chargeable income which is deemed to have been relieved from tax in accordance with sub-regulation

(1)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. S.L. 123.101.

(3)Where a dividend referred to in sub-regulation

(1)is distributed to a member which is also a company (in this subregulation 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 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 subregulation 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. Transitory provision. Renumbered by: L.N. 390 of 2021. S.L. 463. 10. 9. The provisions of the Investment Aid (July 2014) Regulations shall remain applicable for assistance awarded by the Corporation prior to the coming into force of these regulations. INVESTMENT AID 2021 [ S.L. 463.40 10. No aid will be granted under these regulations by the Corporation after 31st December, 2021. 5 Deadline for submission of applications for assistance. Renumbered by: L.N. 390 of 2021.