Manufacturing & Services Incentives

Introduction

The Business Promotion Act (BPA) - Act IV of 2001 – has amended and substituted the Industrial Development Act (IDA) which had been with us since 1988 and which had, all told, served well the functions for which it had been enacted. Regulations have been issued under the BPA by LN135 of 2001.

Malta Enterprise (ME)

The Malta Development Corporation recently renamed Malta Enterprise (ME), founded in 1967 by Act of Parliament, is the exclusive Government agency entrusted with promoting and supporting a quality business environment in Malta for both foreign and local enterprises in the manufacturing and services sectors.

Besides being responsible for 10 Industrial Estates around Malta and Gozo and a Technopark for high technology industries, the ME is responsible for implementing the Government’s industrial policy thereby enabling the growth of some 200 foreign and 300 Maltese enterprises.

The Incentive Package: Types of Companies

For an exhaustive list of Companies that qualify to benefit from the incentives under the BPA please refer to Appendix 1.

Incentives: General

Please refer to Appendix 2 for a detailed list of the incentives provided for under the BPA and the types of companies qualifying for such incentives.

Application procedure and powers of the ME

Interested parties are to apply to the ME on the appropriate form. A declaration signed by all the directors or, alternatively, by the company secretary stating that throughout the relevant accounting period the company is eligible to qualify for the incentives shall, in all cases, be attached to the application. Applicant’s auditor is also to confirm that to the best of his knowledge and belief the director/company secretary’s declaration is correct. If an application is successful, the ME will issue a certificate confirming the eligibility of applicant and setting out the conditions to be satisfied by the enterprise within 60 days from receipt of all requested information. The certificate shall be deemed to constitute a contract between applicant and the MDC/Government of Malta.

The ME reserves the right to request any additional information necessary in the circumstances and may also visit the premises. The ME may also, in particular:

  • examine the books, documents, premises and all other things and matters of applicant as may be necessary to ensure that the assistance is being applied for the purpose for which it has been given; and
  • request that financial statements be submitted to it on a quarterly basis or at such shorter intervals as the ME may determine.


The ME may revoke the incentives granted to an enterprise if such enterprise fails to comply with any of the conditions attached to the grant of any incentive. An appeal from any such decision lies by the aggrieved party to an independent and impartial Appeals Board constituted under the BPA. An appeal from a decision of the Appeals Board may be made to the Court of Appeal on a point of Law.

An enterprise shall only be entitled to benefit from the incentives listed in the BPA if, with the submission of its income tax return for every year of assessment in respect of which it claims a benefit, it submits:

  • a declaration signed by all the directors confirming that throughout the relevant accounting period the enterprise’s trade or business consisted solely of permissible activities and that it is not disqualified from benefiting from such incentives*; and
  • a declaration signed by the enterprise’s auditor stating that to the best of his knowledge and belief, the directors’ declaration is correct.

 

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