Knowledge Transfer

Introduction These Incentive Guidelines provide a framework for addressing skill shortages by supporting training and re-skilling of existing and new employees.   The aim is to support knowledge transfer and the acquisition of new competences in line with the knowledge and skill requirements of the industry. This incentive will support undertakings to upgrade their skill capabilities […]

Written By Stephen Balzan

On January 27, 2017
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Introduction

These Incentive Guidelines provide a framework for addressing skill shortages by supporting training and re-skilling of existing and new employees.   The aim is to support knowledge transfer and the acquisition of new competences in line with the knowledge and skill requirements of the industry. This incentive will support undertakings to upgrade their skill capabilities to address any mismatches between the skills available and knowledge requirements.

Duration of the incentive

This aid scheme is applicable between 1st March 2016 and 31st December 2020.  Applicants should submit a complete application to Malta Enterprise (ME) by not later than 31st October 2020.

Budget

This scheme has a budget of EUR 10,000,000.

Eligibility

This incentive is available to all undertakings, which satisfy all of the following criteria.

  1. Eligible Training  – The training should be designed to address the skills and knowledge requirements of the applicant. The nature of the training should be relevant to the eligible activity of the applicant and organized specifically for the employees of the applicant. 
  2. Legal form – The undertaking is incorporated under the Malta Companies Act, being a partnership en nom collectif, en commandite or a limited liability company. 
  3. Employment – The undertaking must be a newly established undertaking or an undertaking that has directly employed at least five persons (on a full time basis) during the last two fiscal years. 
  4. Activity – The undertakings must be engaged in one of the following sectors: 
Sector
NACE Code
Manufacturing
Section C 
Warehousing and storage
52.10
Computer programming activities 62.01
Technical testng and analysis 71.20
Research and experimental development on biotechnology 72.11
Other research & experimental development on natural sciences & engineering   72.19
Specialised design activities 74.10 
Activities of call centres 82.20 

The incentive

This measure is intended to support the development of training programmes and their implementation.  The training should lead to the up skilling and re-skilling of new and existing employees.  The training may be delivered by trainers who are either employed by the applicant or engaged from related enterprises. Training may also be provided by qualified external providers.  

Eligible costs

  1. Training Needs Analysis and development of Training Programme – These refer to onsultancy costs for carrying out a training needs analysis and the development of the training programme.  This assistance is capped to €100 per employee trained and an overall capping of €5,000.
  2. In-house Training – When the training programme, or part thereof, is delivered by employees of the company, the basic wage cost of such employees, covering the hours during which the employees of the undertaking deliver the training, shall be considered eligible.  Only the direct contact hours during which the trainer is delivering the training may be claimed.  
  3. Training delivered from related enterprises – When the training programme, or part thereof, is delivered by trainers provided by a partner undertaking, the basic wage cost covering the hours during which the trainer is delivering the training may be claimed.  Only the direct contact hours during which the trainer is delivering the training are eligible. If the trainer’s basic wage costs are not provided, then the national minimum wage shall be considered as the eligible cost.As an alternative to the above, when the training is provided by a related undertaking, which is not established in Malta, and when the trainer is not resident in Malta, the eligible cost may be considered to be the cost of training as invoiced by the related undertaking for those hours during which the trainers participate in the training.
  4. Training Delivered by Qualified External Trainers – Costs of qualified external training service providers engaged to deliver training shall be considered as eligible. These services must be provided by a qualified trainer holding a degree relevant to the training, and who has at least five years’ work experience in a sector similar to the one for which the training is provided. Only the direct contact hours during which the trainer is delivering the training are eligible.
  5. Trainee Basic Wage Costs – Basic wage costs of trainees, for the hours during which the trainees are participating in the approved training, may be claimed as eligible costs. The trainees need to be formally employed with the beneficiary during the training period.

Form of Aid 

The aid shall be granted in the form of a tax credit.   ME may approve a cash grant for the partial reimbursement of the wage costs of trainees for undertakings engaged in the manufacturing sector.   Such cash grants may not exceed the applicable aid intensity and shall be capped at €8 per hour for each employee trained.

Maximum Aid

The total assistance per undertaking is capped at €1,000,000. 

Aid Intensity 

The aid intensity shall be established according to the size of undertaking.  The aid intensity applicable shall not exceed the following percentages of the eligible costs:  

Size undertaking%
Small enterprises70
Medium sized enterprises60
Large enterprises50

Utilization of tax credits

When an undertaking does not utilise the awarded tax credits in full, such credits shall be carried forward to subsequent years of assessment.  In this respect, any tax credits not utilised shall be accumulated with any other tax credits awarded to the undertaking.

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected]. 

Disclaimer: This article contains general information only and is not intended to address the circumstances of any particular individual or entity. ACT, by means of this article is not rendering any accounting, business, financial, investment, legal, tax, or other professional advice or service. This article is not a substitute for such professional advice, nor should it be used as a basis for any decision or action that may affect your finances or your business. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Before making any decisions or before taking any action that may affect your finances or your business, you should consult a qualified professional adviser. ACT shall not be responsible for any loss whatsoever sustained by any person who relies on this article.