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Investment Aid |
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Micro Enterprises that re-invest profits derived from their trade or business in an approved project shall be entitled to a tax credit. The scheme shall apply to profits earned during the year 2005 and subsequent years up to 2009, provided the approved project shall be completed within three years. Approved projects are expected to improve the efficiency and effectiveness of the business. This may include the setting up of a new activity, of a change in the product or the production process. Benefits The relative tax credit is earned in the year of assessment during which the respective approved investment is undertaken. The tax credit represents the value of tax that would have been paid if the profits were not re-invested. In any case, the tax credit for any particular year of assessment shall not exceed €116,500 or 50% of the value of the approved investment. Any tax credit which is not utilised in any particular year may be carried forward to subsequent years of assessment up to year of assessment 2015. The tax credit claimed for any particular year cannot: (i) be deducted from tax due on other sources of income; (ii) generate a refund.
Eligibility Any firm, or company deriving eligible profits chargeable under article 4(1)(a) of the Income Tax Act and that satisfies all of the following 3 criteria: i) Having an annual turnover that does not exceeding €582,500; ii) Employing three to ten persons. (Three of whom must be full-time employees); iii) Be registered as an FSS payor under the Final Settlement System (FSS) Rules.
Application Process Applications must be submitted to Malta Enterprise on the prescribed forms by not later than three months prior to the relative tax return date. Approval of Project and Set-aside Profits The applicant is to provide details of his business activities and details of the project, indicating the amount of profits set-aside for the purpose of reinvesting; providing a comprehensive list of expenses related to the investment. The application has to be accompanied by audited financial statements and tax computation for the period under study. Additionally the applicant must submit a certificate by the applicant's auditor confirming that: · the reinvestment project is viable · the expenses are reasonable and fair, according to market values · the reinvestment has the capacity to expand the business. On being satisfied with the application, Malta Enterprise issues a Letter of Approval indicating the amount of profits the applicant may set-aside for the scope of this scheme.
Confirmation of Investment and the Issue of a Certificate of Compliance To claim a reinvestment tax credit on the basis of an approved project, the beneficiary shall submit an application on the Corporation's official document, not later than three months before the relative tax return. The application shall provide details of the investment carried out during the financial year and shall be accompanied by audited financial statements, tax computation and other documentary evidence requested by Malta Enterprise. On being satisfied with the application, Malta Enterprise issues a certificate, indicating the amount of the tax credit entitlement and from which year of assessment the benefit may be applicable.
General Information Applications must be in accordance with and subject to the provisions of rules, under L.N. 334 of 2005 |
Micro Enterprise - Reinvestment Tax Credit |
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incentives |
