As part of the long-term environmental and sustainability growth plans announced in Malta’s budget for 2021, the importation of single-use plastic has been banned in Malta as of January 2021. Moreover, with effect from January 2022, the sale of such plastic products will also be banned.
To this effect, the Malta Enterprise Corporation (MEC) has recently launched an incentive scheme to support retail shops and other businesses in the retail value chain to invest in in-store eco-friendly solutions that allow for the sale of their products through reusable containers, and in related investments required to implement and facilitate the reduction of single-use plastic packaging in their operations.
This Scheme is a de minimis measure and therefore any other de minimis measures availed of by a single-undertaking over a period of three years should be considered.
Any limited liability company, partnership or self-employed person engaged in the wholesale or retail of groceries, detergents, toiletries and other goods sold in bulk to the final consumer is eligible for this scheme. The applicant should employ at least one full-time employee and should not have any outstanding income tax, VAT and social security payments which are older than 12 months.
The aid awarded under this Scheme shall be in the form of a cash grant, covering 50% of eligible expenditure and capped at a maximum cash grant of €20,000 per investment project.
This scheme supports investments in solutions that allow the sale of items to the end consumer in bulk and/or through reusable containers.
Supported investments must be implemented within 12 months from the date of approval by the MEC and should be retained for at least 3 years. Any costs incurred before approval is issued by the MEC will not be considered eligible.
Eligible costs include:
Costs incurred on investments resulting in effective manually operated or automated dispensing / refillery solutions which allow end customers to purchase items in bulk in reusable containers.
The implementation of new bulk dispensing solutions is expected to occupy larger spaces. The costs incurred by a business for the renting of space, from a non-related party, to host the dispensing equipment is considered as an eligible cost for a period of up to one year.
Costs covering a specific time frame are considered eligible (e.g. monthly fee), and one-off costs (such as set up fees charged by the lessor) shall not be eligible under this Scheme.
Costs relating to the provision of reusable containers to customers may be considered eligible if:
the provision of such containers is linked to a return to base scheme through which they are prepared for reuse; or
such containers are specific to the dispensing machine providing a particular product.
Costs incurred in relation to equipment used for the collection, cleaning and sanitisation of reusable containers shall be eligible under this Scheme to the extent that such costs are incurred in line with policies and procedures that ensure quality and cleanliness.
Costs incurred by businesses to invest in software systems that will be used to implement a reward scheme encouraging customers to repeat future purchases with the original reusable containers, shall be considered to be eligible costs. Specific cappings apply.
Tax Partner, PwC Malta
Tel: +356 2564 6726
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