Last updated - July 2021
In a continued effort to alleviate challenges encountered by businesses in Malta as a result of the COVID-19 pandemic, various authorities have announced new or extended fiscal and other measures.
We are setting out below some information on these measures.
July 2021: Updates to some of the new Business Support Measures in April 2021
This page is being revised as and when new measures are announced or relevant updates are made, and we therefore encourage you to visit this page from time to time for the updated information.
In April last year, the Malta Development Bank launched the CGS scheme under which businesses could benefit from improved access to liquidity, at lower interest rates and with a repayment period of up to six years. The CGS enabled the accredited commercial banks to provide new working capital loans to support businesses with their working capital requirements relating to operating costs.
Further information on this Scheme may be found here.
In order to continue supporting businesses in obtaining access to liquidity during these turbulent times, this Scheme has been updated as follows:
One of the first measures that was announced by the Government to assist businesses experiencing a significant downturn in turnover as a result of the COVID-19 pandemic was the postponement of certain eligible tax payments.
The scheme was extended a number of times during 2020, and has recently been further extended such that businesses that had not benefited from the scheme in 2020 now have the opportunity to apply if they experienced a significant downturn in turnover (as defined) in 2021 or 2020 when compared to the same period in 2019. The online application form must reach the Commissioner for Revenue by 15 May 2021.
Eligible taxes comprise provisional tax payable by companies and self-employed persons, social security contributions of self-employed persons and VAT, falling due between August 2020 and December 2021. Tax due on chargeable income for a year of assessment (settlement tax) is not considered eligible for deferral.
The settlement period for deferred eligible taxes will commence from May 2022.
Businesses that had already benefited from the scheme in 2020 will be automatically considered for the extended period, and therefore eligible taxes that had originally been deferred to 2021 continue to be deferred to 2022. The submission of the online application form mentioned above is not required for this to apply.
In all cases, the deferral applies only to the payment of the relative taxes. Obligations to file documents and returns remain applicable as per the relevant statutory deadlines with any default in respect thereof resulting in late filing penalties.
Another support measure that was announced aims to target certain businesses that derive capital gains from the transfer of land and/or immovable property.
This will be subject to a number of criteria and conditions, including the requirement that the promise of sale agreement in respect of such transfer is signed by 31 March 2022. Further guidelines relating to this measure are expected to be issued in due course.
Non-essential shops and services that had to close down during March and April 2021, and which are beneficiaries of the wage supplement scheme, will qualify for rent support again in 2021.
The renewed scheme, which will again be administered by Malta Enterprise Corporation (MEC), will offer a grant of 50% over and above the amount of assistance awarded in 2020. The relevant payments will be processed by MEC on the basis of information provided in 2020.
Applicants which did not avail of this Scheme in 2020 but had to close down during March and April 2021 and are availing of the wage supplement scheme, are eligible for the aid under this Scheme as follows:
|No of employees
receiving the wage supplement
|Eligible rental agreements||Maximum aid awarded|
|10-19||Up to 2||€2,000|
|20 - 29||Up to 3||€2,750|
|30 – 39||Up to 4||€3,500|
|40 and over||Up to 5||€3,750|
An application process under this Scheme is necessary only for those businesses that did not avail of the Rent Subsidy Scheme in 2020. In fact, MEC will be contacting all eligible applicants in mid-July for the submission of the application form, in the case of new applicants, or to verify the information available at MEC for existing beneficiaries.
Similarly to the top-up of the rent support scheme, the top-up of the Electricity Support Scheme is also applicable to businesses which had to close down during of March and April 2021.
The Scheme is being enhanced and will cover up to a maximum of 50% of the electricity bill for the months of June, July and August of 2021 as per the following cappings:
|No of employees receiving
the wage supplement
|No of distinct electricity
|Maximum aid awarded|
|10-19||Up to 2||€3,000|
|20 - 29||Up to 3||€4,500|
|30 – 39||Up to 4||€6,000|
|40 and over||Up to 5||€7,500|
A full application process is required for those businesses that availed of a wage supplement only during March and April 2021. A simpler application form will be sent to those beneficiaries that benefitted from the Electricity Bill Subsidy Scheme in 2020 and therefore have their ARMS account number already registered with MEC.
A one-time cash grant against loss of revenue will be provided to those businesses that are beneficiaries of the wage supplement and which had to remain closed after 10 May 2021, in terms of restrictions announced earlier this year by the Government to limit the spread of the pandemic.
The aid granted will amount to €1,000.
To simplify the application process, Malta Enterprise will send an email to the eligible beneficiaries with a link to the application form. The application form will only require information on the amount of De Minimis Aid that a beneficiary may have availed of in a three-year period. Following the vetting of the application process, the funds should then be automatically transferred to the beneficiaries’ bank account.
The Change to Grow Scheme is intended to enhance the currently prevailing Business Re-engineering and Transformation Scheme and incentivises self-employed persons and SMEs to embark on new investment projects aimed to strengthen business activities, create new products or diversify existing services, or use more sustainable practices including in technology.
The scheme will provide aid at the rate of 75% of eligible costs (capped to €10,000), incurred in two phases, the Advisory Stage and a subsequent Implementation Phase.
Businesses may be supported at the rate of €120/hour (including VAT) capped to a maximum of €5,000, on the ‘Qualifying Advisory Service’ provided, including:
Such qualifying advisory services should be provided by an individual (or a team led by an individual) who meets a distinct criteria (as prescribed in the incentive guidelines) in terms of qualifications or experience.
The Advisory services needs to be fully completed within 6 months from date of approval by MEC. Upon completion, the beneficiary is required to submit prescribed documents to MEC, including an Advisory Report setting out inter alia the main findings and recommendations, and a list of investments required to implement the changes in the business processes.
Interested applicants should submit the application form to MEC by 31 October 2022.
Depending on the outcome and recommendations included in the Advisory Report, further support may be provided to implement the required changes and restart the business activity. The Implementation Phase provides support of an additional €5,000 for the eligible costs incurred. The corresponding Guidelines consider the following eligible costs as long as these have a value of at least €500:
Furthermore, an amount of €500 (from the said €5,000) can be used to finance additional advisory services that are required during this Phase. Certain costs, such as items / services acquired from related parties and advertising costs are not considered eligible for assistance under this Scheme.
Moreover, any costs which are incurred on the Implementation Phase before MEC issues an approval letter on the Advisory Report, are also considered ineligible.
A claim for support on the eligible implementation costs incurred by the beneficiary should be submitted within 12 months from an endorsement signed by the advisor stating that the beneficiary is implementing the agreed changes.
The ReStart Incentive Scheme is very similar to the Change to Grow Scheme, the main difference being that it specifically targets entrepreneurs that experienced a drastic decrease in business activities and/or a permanent closure of their business due to the COVID-19 pandemic.
The scheme will provide financial support to such entrepreneurs in order to engage professional business advisory services to restart their business activities by adapting to new and sustainable business models, and similarly supports an ‘Advisory Stage’ and an ‘Implementation Phase’ following recommendations provided by the engaged business advisors.
Businesses may be supported at the rate of €120/hour (including VAT) capped to a maximum of €5,000, on the ‘Qualifying Advisory Service’ provided. A ‘Qualifying Advisory Service’ should be provided by an individual (or a team led by an individual) who has past experience in advising and supporting businesses to start or restructure operations, and meets a distinct criteria (as prescribed in the incentive guidelines) in terms of qualifications or experience.
Beneficiaries to this Scheme should complete the Advisory stage, which includes obtaining a report from the advisor highlighting the main recommendations and eligible costs that MEC may consider supporting during the Implementation phase, within 3 months from the date of approval of the assistance by MEC.
Interested applicants should submit the application form to Malta Enterprise Corporation by 31 October 2022. Upon the completion of the Advisory Service, the beneficiary should submit all the documentation required to make a claim for the approved costs, which include fiscal documentation, timesheets and an Advisory Report.
Depending on the outcome and recommendations included in the Advisory Report, further support may be provided to implement the required changes and restart the business activity. The Implementation Phase provides support of an additional €5,000 for the eligible costs incurred by a business, including rent, marketing, recruitment services and other similar costs that are identified in collaboration with the advisor as required for restarting the business. Furthermore, an amount of €500 (from the said €5,000) can be used to finance additional advisory services that are required during this Phase.
Costs relating to assets, stocks, items / services acquired from related parties, advertising costs, and other costs as set out in the Guidelines, are not considered eligible for assistance under this Scheme. Moreover, any costs which are incurred on the Implementation Phase before MEC issues an approval letter on the Advisory Report, are also considered ineligible.
A claim for support on the eligible implementation costs incurred by the beneficiary should be submitted within 6 months from the date the implementation costs are approved by MEC.
The Smart and Sustainable Investment Scheme is intended to assist businesses in all sectors of the economy to embark on new investment opportunities which lead to a more sustainable and digital economy.
The aid granted will be a combination of cash grants amounting to a maximum of €50,000, which may be topped up with an additional 20% support in the form of tax credits.
Higher cash grants may be available for businesses operating in Gozo, start-ups, and investments that directly create new green jobs.
Under the rules of the MicroInvest scheme, tax credits awarded to beneficiaries may be utilised over a period of three years.
In view of the downturns experienced by businesses as a result of COVID-19 and the resulting likelihood that such period will not be sufficient to allow the beneficiary to utilise the intended aid, the said period is being extended by an additional three-year period for MicroInvest certificates which are due for expiry in 2021, 2022 and 2023. As a result, such certificates will now instead expire in calendar years 2024, 2025 and 2026 respectively.
Tax Partner, PwC Malta
Tel: +356 2564 6897
Senior Manager, Tax, PwC Malta
Tel: +356 2564 6739
Tax, PwC Malta
Tel: +356 2564 6789
Senior Manager, Tax, PwC Malta
Tel: +356 2564 2526