Tax Credits for Micro Enterprises and the Self-Employed

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 […]

Written By Stephen Balzan

On May 28, 2017
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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.

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.