E-Commerce Tax Credits

SME Development

E-Commerce tax credits encourage and support Small and Medium Sized Enterprises to acquire, develop and invest in e-commerce systems, as a means to promote a modern and dynamic business environment.

Eligibility

Eligible enterprises, including sole traders, must be undertaking an economic activity.

Eligible projects must enable business transactions over the internet. In instances where the sale is not normally finalized through the internet, eligibility may be extended to automated online booking/appointment systems that lead to a financial transaction.

Eligible costs must be directly related to the creation, development, or acquisition of new or significantly improved electronic commerce systems and may consist of:

· investment in computer hardware and software

· expenses for upgrading or updating the website. These costs must be incurred within 2 years from commissioning the new electronic commerce system and should be specified in a maintenance contract, agreed to at the time of the development of the system.

Benefits

The tax credit is equivalent to 100% of the eligible costs as approved by Malta Enterprise and is capped at €12,000 per project. The incentive will be awarded under the de minimis aid rules in terms of Commission Regulation (EC) No 1998/2006 on the Application of Article 87 and 88 of the EC Treaty to de minimis aid. The maximum aid received by an enterprise from all schemes under the de minimis aid rules shall not exceed an aggregate of €200,000 over a rolling three fiscal year period.

Application Process

Applicants are required to complete the appropriate Tax Credit Application and submit it to Malta Enterprise (Incentives Administration Unit) by not later than three months from the beneficiary’s tax return date. Malta Enterprise will notify, through a letter of approval, the maximum eligible value of the investment project and the corresponding tax credit. The applicants will be required to countersign the letter of approval as an acceptance of the terms and conditions. Beneficiaries are expected to furnish Malta Enterprise with evidence of the completion of the investment project.

General Information

· Qualifying expenditure must be incurred during Year 2008 or in the approved subsequent years.

· Unutilized tax credits may be carried forward up to year of assessment 2013.

· Application has to be submitted by December 2008 (subject to budget).

· Investment Projects should not exceed 36 months from approval date.

· All Eligible costs must be incurred after the application for assistance is approved by Malta Enterprise and within the timeframe specified in the letter of approval.

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