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Guidelines on Micro Invest Tax Credits

Written by Franco Falzon — Thu, 01 April 2010
Malta Enterprise has recently issued guidelines for the application of tax credits to Micro- Enterprises and self-employed individuals. The incentive aims to encourage Micro-Enterprises and individuals to innovate, expand and develop their business operations.

Eligible Enterprises

Both companies and individuals are eligible to apply for these tax credits provided that the number of employees did not exceed nine (9) on the 10th of November, 2009. Understandably, their annual turnover must not exceed €2 million and such undertakings should be fully licensed with the applicable regulatory authority. More importantly, applicants may not have any arrears due to the Commissioner of Inland Revenue or the VAT department.  
 

Eligible Costs 

Costs which may qualify for the Micro Invest Tax Credit Scheme include the following:
  • Expenses incurred for the furnishing, refurbishing and upgrading of business premises (including extensions or modifications to premises) subject to a certain threshold;
  • Acquisition of machinery, technology equipment, apparatus or instruments for the enhancement of business operations, including energy-saving equipment;
  • Investment in equipment for compliance with regulations including Health & Safety, Environmental Directives and Physical Access;
  • Investment in certain types of motor vehicles;
  • Wages costs covering a 12 month period pertaining to new jobs;

Tax Credits

The tax credit amounts to 40% of the eligible expenditure. Micro-enterprises based in Gozo shall be entitled to a further 20%, implying that the credit amounts to 60% of the approved expenditure.

Tax credits claimed over the eligible period may not exceed €25,000 in total. Furthermore an enterprise should utilise any tax credits in connection with this scheme until expiration of the Year of Assessment 2014.  

With respect to corporate enterprises, no further tax is imposed on dividends which have been distributed out of profits exempted from tax by virtue these tax credits.

 

For more information, kindly contact:

Neville Cutajar - Managing Partner: neville.cutajar@3a.com.mt

 

 

Last Updated on Thu, 30 December 2010
 

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