Micro Enterprises and self-employed persons, carrying out a trade or business and which require assistance to expand, innovate or invest in its business in Malta, are eligible to tax credits in terms of Tax Credits for Micro Enterprises and the Self-Employed regulations and guidelines issued by Malta Enterprise.
The tax credits are calculated on the eligible costs incurred up till 31st December 2020 and the amount of tax credits that may be granted will not exceed Eur30,000 over any period of three consecutive years.
Start-up companies established in Gozo may be granted tax credits up to a maximum of Eur50,000 over three consecutive years. With effect from year of assessment 2018, family businesses as defined in the Family Business Act and female owned undertakings with effect from year of assessment 2016 will also be able to benefit from such tax credits up to a maximum of Eur50,000 over three consecutive years.
In order to qualify for the benefit, the undertaking shall not employ more than 30 full time employees and shall not have a turnover or annual balance sheet total which exceeds Eur10,000,000.
Tax credits are a deduction against the tax liability payable by the undertaking on its chargeable income derived from its trade or business. Where the tax credits exceed the tax liability for the year, such excess can be carried forward to the subsequent year of assessment. Tax credits will not give rise to refunds of tax.
Where the undertaking benefitting from such tax credits is a company, any profits relieved from tax may be distributed to its shareholders and will be exempt from income tax in the hands of the shareholders on receipt of such dividends.
Applications for such tax credits must reach Malta Enterprise by not later than the 30th November 2021.