L.S. 478.05 Regolamenti dwar Inċentivi Finanzjarji għall-Industrija Awdjovisiva

(1)In these regulations, unless the context otherwise "Act" means the Malta Film Commission Act; Cap. 478. "certificate of provisional approval" means the certificate issued in terms of regulation 5 following receipt of relevant application and supporting documentation and duly assessed in accordance with the relevant Guidelines; "Commission" means the Malta Film Commission established by article 3 of the Act; "Commissioner" means the Malta Film Commissioner appointed under article 5

(1)of the Act; "completion" means the termination of filming activity, animation or VFX together with post-production in Malta of an audiovisual production, and "completed" shall be construed accordingly; "co-production" means a qualifying production which is the subject of a co-production agreement between two

(2)or more co-producers; "difficult audiovisual works" means an audiovisual production as established by the Commissioner in accordance with the Guidelines; "eligible expenditure" means the items of expenditure incurred by the qualifying company in relation to the qualifying production that are eligible as established by the Commissioner in accordance with the Guidelines; "EU Member State" means a Member State of the European Union in accordance with the European Union Act; "final approval" means the approval granted in terms of regulation 7; Cap. 460. 1 2 FINANCIAL INCENTIVES FOR THE AUDIOVISUAL INDUSTRY [ S.L. 478.05 "financial incentive" means the financial benefit provided for in regulation 3; "Guidelines" means the guidelines that may be issued by the Commission from time to time; "Minister" means the Minister responsible for the film industry; "principal photography" means the filming of major or significant components of an audiovisual production which involves lead actors or the commencement of animation or VFX work partially or wholly completed together with post production in Malta; "qualifying company" means the entity responsible for all activities involved in making a qualifying production and having access to full financial information for the total production worldwide, which shall be made available to the Commissioner upon the his request. Where the qualifying production is a coproduction, the co-producers shall appoint one

(1)of the coproducers amongst them to act as the qualifying company in respect of the qualifying production for the purposes of these regulations and the appointed co-producer shall be deemed to be the entity responsible for all activities involved in making the qualifying production: Provided that:

(1)there shall be only one

(1)qualifying company with respect to a particular qualifying production;

(2)in the case of a co-production, the financial incentive granted shall be apportioned between the coproducers as agreed between them, or in the absence of any agreement to that effect, in proportion to their share in the overall budget of the qualifying production; and

(3)any co-producers shall be jointly and severally liable for their obligations under the Act and these regulations: Provided further that when the qualifying company is:

(1)a foreign qualifying company, it shall be either a special purpose corporate vehicle or a company which carries on, or intends to carry on in Malta, a trade or business which is considered as a qualifying FINANCIAL INCENTIVES FOR THE AUDIOVISUAL INDUSTRY [ S.L. 478.05 production; or

(2)a local qualifying company, it shall be either a special purpose vehicle or a company that is duly registered in Malta as an audiovisual production company and intends to produce a qualifying production as its main purpose and activity; "qualifying production" means an audiovisual production that meets the conditions established in article 25 of the Act, the Schedule to the Act and the Guidelines which the Commissioner may publish from time to time; "Regulation No 651/2014" means 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, as amended, and as may be subsequently amended; "State Aid Monitoring Board" means the State Aid Monitoring Board constituted under article 57 of the Business Promotion Act; Cap. 325. "undertaking" means an entity carrying out an economy activity; "VFX" means visual effects.

(2)The words and expressions which occur in the Act shall, unless otherwise defined in these regulations, have the same meaning as assigned to them in the Act. 3.

(1)A rebate of up to forty percent (40%) of eligible expenditure may be given as a cash grant, which shall be exempt for the purpose of the Income Tax Act, to qualifying companies upon completion of a qualifying production, in accordance with these regulations and the Guidelines: Provided that identifiable eligible costs claimed under any other publicly funded scheme in Malta, shall not be claimed under this scheme: Provided further that the total State aid from which a qualifying production may benefit under this regulation, or any other source shall not exceed the ceiling provided for in the Guidelines.

(2)The level of financial incentive shall be determined by the Commission in accordance with article 26 of the Act, the provisions of these regulations and the Guidelines. Financial incentives. Cap. 123. 3 4 [ S.L. 478.05 Cap. 123. FINANCIAL INCENTIVES FOR THE AUDIOVISUAL INDUSTRY

(3)Notwithstanding the provisions of sub-regulation

(1), rebates of up to fifty percent (50%) of eligible expenditure for difficult audiovisual works may be given as a cash grant, which shall be exempt for the purpose of the Income Tax Act, to qualifying companies, upon completion of a qualifying production, in accordance with these regulations and the Guidelines.

(4)The maximum aid incentives outlined in sub-regulations

(1)and

(3)shall also apply for co-productions. Application for provisional approval. 4.

(1)The application for the financial incentive shall be submitted to the Commissioner by the qualifying company or its local branch or agent in accordance with the Guidelines.

(2)The application specified in sub-regulation

(1)shall be submitted together with such documentation and information as may be required by the Commissioner and shall include any documents and information listed in the Guidelines.

(3)The application shall be submitted at least thirty

(30)working days before the planned commencement of the qualifying production in Malta: Provided that if the application is submitted less than thirty

(30)working days before the commencement of the qualifying production in Malta, it may only be accepted at the discretion of the Commissioner. Certificate of provisional approval. 5.

(1)Following the receipt of the application in accordance with regulation 4, the Commissioner shall complete an assessment of this application within thirty

(30)working days after which a certificate of provisional approval shall be issued: Provided that where the Commissioner requests additional information in respect of the application, the thirty

(30)working days shall resume after the relevant information has been received.

(2)In case of any changes to the application presented for provisional approval, the Commissioner shall be informed prior to the final approval. Significant budget changes. 6.

(1)Where, after the submission of the application for provisional approval, the budget of the Malta spend and estimated eligible expenditure as indicated in the provisional certificate, increases by over ten percent (10%) of the original estimations prior to the final completion of the submission, the Commissioner shall be informed in writing immediately of such changes.

(2)If it becomes apparent that the threshold has been exceeded, the Commissioner reserves the right to award the final FINANCIAL INCENTIVES FOR THE AUDIOVISUAL INDUSTRY [ S.L. 478.05 5 incentive on not more than ten percent (10%) over and above the overall qualifying expenditure, as outlined in the provisional certificate.

(3)For the purpose of this regulation, if further allowances are made which are found to be justifiable, said shall be made solely at the discretion of the Commissioner. 7.

(1)Upon completion of the qualifying production in respect of which a certificate of provisional approval was issued in accordance with regulation 5, the qualifying company shall submit its final submission detailing expenses of the qualifying production where a benefit is being sought as outlined in the Guidelines. A full audit of expenses shall be carried out by an auditor. Final approval.

(2)The submission mentioned in sub-regulation

(1)shall be submitted together with such documentation and information as may be required by the Commissioner and shall include the documents and information listed in the Guidelines.

(3)Following receipt of the final submission made in accordance with sub-regulation

(1)and

(2), the Commissioner shall issue a final certificate. 8.

(1)The qualifying company shall ensure compliance with the conditions and requirements set out in the certificate of provisional approval and, or the final certificate and in the Guidelines. Obligations of the qualifying company.

(2)If the qualifying company or its local branch or agent fails to meet any of the conditions and requirements as referred to in sub-regulation

(1), the Commissioner may withdraw its provisional or final approval for the grant of the financial incentive. If the qualifying company has already received the financial incentive and the Commissioner establishes that the conditions and requirements as referred to in sub-regulation

(1)have not been complied with, it shall refund the Commissioner the amount of the financial incentive received upon the Commissioner's request. 9. When the financial incentive has been provided in terms of these regulations to an undertaking, the Commissioner may:

(1)from time to time make or cause to be made such examination of books, accounts, documents, premises, and all other things of that undertaking, its local branch or agency, as the case may be, as may be necessary to ensure that the provisions of these regulations, of the Guidelines, and the provisional approval on which a certificate was issued are complied with; and

(2)request such financial statement from the undertaking, its local branch or agency, as the case may be and Examination of records. 6 [ S.L. 478.05 FINANCIAL INCENTIVES FOR THE AUDIOVISUAL INDUSTRY as may be required. Database of assistance provided. 10. The Commissioner shall keep, for a minimum of ten

(10)years, a database of all the financial incentives provided to, or claimed by, undertakings in terms of these regulations so the Commission may:

(1)verify whether the provisions of the Act and of these regulations have been complied with; and

(2)provide the State Aid Monitoring Board with such information as it may require. Applicability. 11. These regulations shall apply to audiovisual productions in respect of which the aid was granted by 31st December 2023.