Tax Credits for Catering Establishments – Catering Capacity Building

Introduction Malta Enterprise (ME) has recently launched a new scheme, the scope of which is to assist hospitality and catering establishments engaging a chef to support in capacity building, innovation, and in the development of the operations.  Undertakings (including self-employed operators) will be supported through a tax credit representing a percentage of the eligible expenditure […]

Written By Stephen Balzan

On September 2, 2017
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Introduction

Malta Enterprise (ME) has recently launched a new scheme, the scope of which is to assist hospitality and catering establishments engaging a chef to support in capacity building, innovation, and in the development of the operations.  Undertakings (including self-employed operators) will be supported through a tax credit representing a percentage of the eligible expenditure and wages of international experienced chefs.

This scheme shall be available until the end of 2018 and ME has a budget of Eur250,000 annually.

Eligibility

Applicants must be a catering establishment which should be duly licensed with the Malta Tourism Authority (MTA) that wish to engage an internationally experienced chef to support the capacity building to innovate, or to develop the operations.

At the date of application, the applicant must have at least five persons registered on full basis (or a number of persons engaged on part time basis that in total equate as equivalent to 5 full time persons).  The employment must be registered with Jobsplus and in case of self-employed undertakings the owner will be considered if registered accordingly with Jobsplus.

Applicants must be duly licensed with the MTA to carry out their trade or business, and within their business classification. Applicants must not be in default with the Food Safety Commission and the Environment Health Directorate.

In order to be considered, the Chef engaged by the undertaking must meet the criteria set below.  

The chef must have the following qualifications:  A minimum qualification in equivalence to a MQF Level 5 in the culinary arts or equivalent and a minimum of three years’ experience in a respected restaurant guide. 

Alternatively, the chef would have been awarded a scholarship or a certification from an Industry-recognised schools or scholarships such as: Roux Scholarship; Le Cordon Bleu; Institute Paul Bocuse, The International School of Italian Cuisine (ALMA), Culinary institute of America (CIA), as well as from chefs with accolades from Bocuse d’Or, Royal Academy of Culinary Arts amongst others and having at least 3 years’ experience in a respected restaurant guide as Executive Sous Chef, Sous Chef, Executive Head Chef and Head Chef or equivalent.

Alternatively, the chef must have a minimum of six years’ experience working as a senior chef in a hotel, stand-alone restaurant, franchise group or a group of restaurants, including contract catering or in an respected restaurant guide.

Maximum Aid and Aid Intensity

Assistance will be in the form of tax credits.

ME may approve a tax credit of up to €10,000 per undertaking, covering 75% of the eligible costs.  The aid may cover two different qualifying engagements which may be between the undertaking and the same qualifying chef. 

Qualifying Costs

Costs as specified in an agreement between the undertaking and Qualifying Chef shall be considered as eligible provided that:

  1. The agreement clearly specifies that the Qualifying Chef will provide the undertaking with capacity building through: on the job training; menu and menu engineering; and/or a routine contact with the personnel on the job premises; and
  2. The chef will be in Malta for a period of 10 operational days (not necessarily consecutive) for supporting the undertaking in the agreed tasks.

All cost must be invoiced by the Qualifying Chef (or his/her representative) except for any travel costs which may be invoiced to the undertaking by the airline or travel agent providing the service.

Applications

Applications together with the supporting documentation should be submitted to ME by not later thsn 31st December 2018.  Applications will be processed by ME, the Ministry of Tourism and by the Institute of Tourism Studies (ITS) and will be based on the information included in the application form and the documentation submitted.   Primarily the evaluation process will confirm whether the applicant fulfils the conditions set out in the Guidelines issued by ME. 

ITS will in its review consider the value to be gained by the applicant and its potential impact on the growth of the Maltese economy before recommending that the applicant be granted such a tax credit.

Should the application be considered favourably, an Investment Entitlement Certificate (IEC) will be issued by ME. 

Tax Credits

The awarded Tax Credit may be claimed in the tax return in the three years of assessment immediately following the year in which the certificate is issued.  The Tax Credit Certificate may only be used against tax due and may not be used to settle any pending tax payments.   The Income Tax Department may refuse to accept the Tax Credit Certificate for any Year of Assessment in which the holder is defaulting on VAT, Income Tax, and Social Security payments. 

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.