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Availing yourself from the Micro Invest tax credit

19-Feb-16

Objective of the Scheme

The objective of the scheme is to incentivize undertakings to innovate, expand, develop or implement compliance directives within their organization, through the granting of a tax credit to eligible organisations.

Claim Submission / Duration of incentive

Micro Invest Applications are based on the costs incurred in the preceding year, thus the 2016 Micro Invest applications will cover costs incurred and paid for in 2015 and costs incurred in 2014 but paid for in 2015. The final call for applications will be in the year 2021, which will be based on costs incurred and paid for in 2020.
The primary deadline for the submission of applications is March of every year, however as of the year 2015, the Malta Enterprise has introduced an extended deadline for late submissions, being November of every year. If one applies by March of every year, the Incentive Entitlement Certificate (IEC) issued would be available for use as of the year of application, whilst if one applies by the extended deadline, the Incentive Entitlement Certificate (IEC) issued would be available for use as of the following year. Undertakings which submit an application in the March deadline, may NOT submit another application in the November deadline.

Eligibility

The following criteria must be satisfied by undertakings to be considered as eligible for the scheme:
- During the year in which the costs were incurred, the undertaking must not have employed more than thirty (30) full time persons and had a turnover of not more than Eur 10 million;

- The undertaking must employ at least one (1) employee on a full or part time basis. The person employed may be the applicant himself in the case of a self-employed person. In any case, the employed person must be registered with the ETC as such;

- Unless exempted, applicants should be registered with the VAT department;

- Self-employed persons must be registered with the ETC;

- The undertaking must not be defaulting on statutory obligations in respect of VAT, Income Tax and Social Security Contributions;

- Undertakings excluded under the de minimis regulations are not eligible for this incentive.

Incentive Description

The tax credit which may be approved is equivalent to 45% of the costs incurred if the undertaking is operating in Malta and 65% of the costs incurred if the undertaking is operating in Gozo.
The maximum aid allowed to a SINGLE UNDERTAKING shall not exceed the amount of Eur 30,000 over any three (3) consecutive years, starting from any tax credits granted in 2014 (for costs incurred in 2013). 
The maximum aid allowed to a START-UP ESTABLISHED IN GOZO shall not exceed the amount of Eur 50,000 over any three (3) consecutive years, starting from any tax credits granted in 2014 (for costs incurred in 2013). 

Eligible Costs

- Wage Costs covering the first twelve months in respect to new full-time jobs or part-time jobs in excess of twenty (20) hours per week, created in the preceding year of application, as long as these constitute a net increase in the total of full-time employees, when compared to the employment figure of the previous three (3) years.

- Furbishing and Refurbishing Costs related to costs subcontracted to third parties in relation to the furbishing, refurbishing and upgrading of a business premises, including extensions or modifications to premises, as long as the installation costs are included in the receipt provided by the supplier. For the costs to be eligible, the premises need to be licensed as business premises.

- Investment Costs in purchasing machinery, technology, apparatus, instruments including ICT solutions and systems which help to save energy or produce alternative energy, which are new or first time used in Malta.

- Motor Vehicles which are commercial and which are new or first time used in Malta, as long as they are engaged in the carriage of goods (category N1, N2 or N3) and Special Purpose Motor Vehicles. Vehicles which may also be used for non-business (pleasure) activities will not be considered as eligible.

Utilisation of Tax Credit Certificates

- The tax credit must be utilized by the third year of assessment. That is, for tax credit certificates which will be issued in the year of assessment 2016, these will need to be used by the year of assessment 2018;
- In case of START-UPS the tax credit must be utilized by the fourth year of assessment. That is, for tax credit certificates which will be issued in the year of assessment 2016, these will need to be used by the year of assessment 2019;
- Tax credit certificates are utilized only against tax incurred on income derived from the trade or business activity only.

Deadline

As explained in the above, the primary deadline for the Micro Invest applications 2016 is the 30th March 2016. However we encourage you to contact our office for assistance, by not later than Friday 26th February, 2016. 

Contact Us

For further information on this scheme, please contact us on:

E: daniela@prturner.com.mt  or 

M: 00356 77650000  or

T: 00356 21654567