The Government Financial Packages

In a press conference held on 8th June 2020, the Prime Minister Dr Robert Abela, Finance Minister Prof Edward Scicluna and Minister for the Economy, Investment and Small Businesses Mr Silvio Schembri launched further measures to boost the Maltese economy post COVID-19 by:

• Reducing business costs;
• Incentivising local consumption; and
• Enhancing a business-friendly climate.

Reducing Business Costs

Rent

Businesses classified under Annex A and B on Malta Enterprise’s website will receive a one-time grant of up to €2,500.

Water and Electricity

Businesses hit by the COVID-19 will receive a refund of up to 50% of their electricity bills for the months of July, August and September. This will be set at a maximum of €1,500.

Fuel

As from Monday 15^th June 2020, the prices of petrol and diesel per litre will go down by 7c, leading to a price per litre of petrol of €1.34 and €1.21 per litre of diesel.

Commercial Licenses

A refund for the payment of trade and MTA licences specifically targeted to hawkers, shop owners, bars, restaurants, hotels, and tourist guides. 

Logistics

A temporary refund for importers of 33% of port charges and a 10% refund on container discharge fees, excluding transhipment.

Incentivising local consumption

Cash Vouchers

Maltese and Gozitan residents aged 16 years and over will be provided with a total of €100 worth of cash vouchers, €80 of which can be used in entities licensed by the Ministry for Tourism and €20 of which need to be spent in entities that had been forced to shut down by the Superintendent of Public Health. These vouchers can be used up to September 2020.

Wedding Expenses Refund

The Government has decided to provide a grant of up to €2,000 per couple who was forced to postpone wedding plans due the COVID-19 pandemic and who, in particular, had to forfeit deposits paid on wedding expenses.

In-work Benefit

The value of the in-work benefit given to parents to incite them to go to work will be increased to €1,400 per child (in the case when both parents work) and €630 per child (in the case of single parents or where only the mother or father works). Furthermore, each family currently receiving the in-work benefit will also receive a one-time supplement of €250.

Immovable Property

The final withholding tax related to the disposal of property will now be taxed at a rate of 5% (instead of 8%), while stamp duty related to the acquisition of property will now be at a rate of 1.5% (instead of 5%). These reduced rates apply solely to property values of up to €400,000 and for promise of sales that are published by the end of March 2021.

This shall also be applied in the case of promise of sales that have already been signed.

A possible further relaxation in the conditions associated with the exemption from stamp duty was also announced.

Enhancing a business-friendly climate

Wage supplement

The wage subsidy for the sectors most affected by the economic impact of COVID-19 will be retained up to September i.e. €800/month per Full-Time employees and €500/month per Part-Time employees. These sectors include tourist accommodation, travel agencies, language schools, organisers of mass events and air transport

Form July, other sectors currently receiving the full benefit will see it reduced to €600/month per Full-Time employees and €375/month per Part-Time employees. 

Businesses which have re-opened will drop to Annex B, receiving a wage subsidiary of €160/month per Full-Time employees and €100/month per Part-Time employees. 

The wage supplement will be extended to pensioners and full-time students who are also in employment. 

Tax Deferral Scheme

The Tax Deferral Scheme will continue to apply until the end of September 2020, with the amounts due being eventually repaid over a period of twelve (12) months. However, as from 1^st July 2020, the tax deferral scheme will no longer apply with respect to the payment of Final Settlement System taxes and social security contributions on wages.

Cash Grants in lieu of Micro Invest tax credits

30% of these tax credits made available to businesses during 2020 are to be converted into cash grant form, with a maximum threshold of €2,000. This threshold will increase to €2,500 for those businesses based in Gozo and for undertaking with a majority of female shareholding.

Financial assistance to old people’s homes

A total of €2 million will be given in the form of aid to old people’s homes as a sign of recognition for their invaluable work during the pandemic.

International fair costs

Businesses that had booked participation in international fairs that were cancelled due to the COVID-19 pandemic may claim a refund of the costs incurred of up to 80%.

Other incentives

Support to Bond Issuers in terms of Underwriting

Bond issuers will be supported through the underwriting of the issue by the Government, through the Malta Development Bank, and supported by banks so as to ascertain that obligations to bondholders are kept.

Cash grant to support Business Process Re-engineering

The Government also announced a measure that will help facilitate the re-engineering of businesses and the introduction of new methods of working to ensure a smoother and more cost-effective modus operandi. To this end, a grant of up to €5,000 will be provided to spend on consultancy and advisory fees.

A Further Guarantee Scheme to assist Business Financing

The Government is currently in discussion with the EU in order to introduce a new guarantee scheme, in addition to the current COVID-19 Guarantee Scheme and Interest Rate Subsidy Scheme.

Further supporting the training of the Maltese workforce

Companies having less than 50 employees can benefit from further support in terms of skills development and training. More details to be issued at a later stage.

Investing in foreign digital campaign

Companies which have opted to commence digital campaigns in new foreign markets so as to stimulate demand for their products can benefit from a grant of up to €10,000.

Export Credit Guarantee to further incentivise exports in new markets

Companies that seek to export their products to new countries may avail themselves of a new export credit guarantee scheme, supported by Malta Enterprise and the Malta Development Bank.

Modernising of equipment in the Construction Sector

Operators in the local construction sector may avail themselves of support in terms of modernising their equipment through a grant of up to €200,000.

Assistance to the Voluntary Sector

Local NGOs whose income was impacted negatively by the COVID-19 pandemic will also be able to benefit from total of €3 million allocated by the Maltese Government to local NGOs.

A New Legal Framework to stimulate Investment

A new legal framework with the aim of stimulating investment will be announced shortly encouraging publication of non-financial information to allow them to obtain investment from those having social, economic and good corporate governance levels.

Further Investment in Capital Projects and Infrastructure

A total investment of circa €400 million will be dedicated to projects of a capital and infrastructural nature, for the next 8 years, covering inter alia the upgrade of the Corradino Business Incubation Centre, an investment in an ex-landfill in Marsa, a new logistics hub as well as an extension to the current Life Sciences Park.

On 24th March 2020, the Government of Malta unveiled further economic measures to aid companies and self-employed:

The Government is giving  EUR 61 million per month to finance wages in sectors that were hard hit by Covid-19.

A further EUR  10.5 million will also be forked out to sustain workers forced to take leave.

The Wage Supplement – What are the latest benefits?

All applications for the above measures have been issued.

On 18th March 2020, the Government of Malta announced a rescue package of EUR 1.8 billion to mitigate the coronavirus crisis in Malta. The main pointers of the package are the following:

Liquidity

• The package includes  EUR 1.6 billion in liquidity for companies:
  • EUR 900 million in Loan Guarantees
  • EUR 700 million in Tax Deferrals
  • EUR 210 million will be injected to assist the economy

Quarantine Leave and Parental Leave

• The Government will pay EUR 350 per employee on quarantine leave
• One parent from each family who is forced to stay at home as a result of school closures, and is unable to telework, will benefit from EUR 800 per month leave (for the coming two months). For this to apply:
• Both parents need to be employed within the private sector, and
• Both shall not be able to work from home

Aid for Companies and Self-Employed Persons

The Government intends to:

• Cover 2 days of employee wages per week (based on a maximum wage of €800 per month) for enterprises suffering from a complete suspension of operations
• Cover 2 days of income per week (based on maximum income of €800 per month) for the self-employed suffering a complete suspension of operations. Government coverage will increase to 3 days in the case of self-employed individuals who employ others
• Cover 1 day of employee wages per week (based on a maximum wage of €800 per month) for enterprises whose operations decreased at least by 25%
• Cover 1 day of income per week (based on maximum income of €800 per month) for the self-employed whose operations decreased by at least 25%. Government coverage will increase to 2 days in the case of self-employed individuals who employ others

Aid for Employees

• Employees (Maltese or EU citizens) who are made redundant will get EUR 800 per month as an unemployment benefit.
• Third-country nationals who become unemployed won’t get financial assistance, yet JobsPlus will help them find alternative work.
• People who lose their job and live in a rental property will qualify for rent subsidy (if not already benefiting from this scheme)

Health Aid

• EUR 35 million will be allocated to health authorities for use in their combat against Covid-19

Foreign Workers Update (Third-country nationals)

• New work permits for unskilled third-country nationals will not be accepted. Therefore, companies which make anybody redundant cannot apply for a work permit for third-country nationals.
• Live-in carers and healthcare professionals whose single permit is about to expire can have their permit automatically extended for a period of three (3) month. These include Nurses, Nurse Assistants, Staff Nurses, Doctors, Professors, Health Carers, Assistant Carers, Carer Supervisors, Health Specialists and Locum Medical Officers (Anaesthesia).

Deferral of Tax Payments

Tax and social security payments due for March and April for businesses hit by the coronavirus pandemic have been postponed by two months.

Who can apply?

Enterprises and self-employed are eligible to this incentive which gives a two-month extension to pay Provisional Tax, VAT and National Insurance Contribution on Salaries. This will apply for taxes owed till end of April.

All tax forms should be submitted according to normal deadlines. The incentive is primarily aimed, but not limited to, the tourism and hospitality, entertainment, transport and manufacturing sectors that are being affected by COVID-19.

Who is excluded?

Companies and self-employed that have not complied with their tax obligations falling due by 31st December 2019

Contact us for further assistance

If you need further assistance with regards to this incentive kindly get in touch with our experienced tax team by contacting our Tax Director, Kristine Attard, on kattard@ksimalta.com for further details.

Teleworking Scheme

The Government of Malta has introduced a new scheme to support businesses (including partnerships and self-employed individuals) to invest in technology that enables teleworking.

How much is the grant?

The cash grant covers up to 45% of the eligible cost and shall be limited to €500 per teleworking agreement and €4,000 per undertaking.

Who is eligible?

This call is eligible for costs incurred between 15th of February and 8th May 2020.

To be eligible, the employee shouldn’t have had an active teleworking agreement before 15th February 2020. All costs have to be incurred after this date.