S.L. 463.9 Art. 3Tax credits for micro enterprises and the self- employed. 

(1) Where the Corporation is satisfied that an undertaking carrying out a trade or business requires assistance to expand, innovate or invest in its business in Malta, the Corporation may provide such an undertaking with a tax credit. The intensity of the tax credit shall be in accordance with the terms and conditions set out in the guidelines:

Provided that the total amount of tax credits that may be granted in terms of this regulation shall not exceed fifty thousand euro (€50,000) over any period of three (3) consecutive years under the terms and conditions specified in the guidelines:

Provided further that undertakings established in Gozo, female owned undertakings and family businesses as may be defined in the guidelines, may be granted a total amount of tax credits in terms of this regulation that shall not exceed seventy thousand euro (€70,000) over any period of three (3) consecutive years, under the terms and conditions specified in the guidelines; Provided further that the total amount of de minimis aid st awarded to a single undertaking before or on 31 December 2023 may not exceed two hundred thousand euro (€200,000), or one hundred thousand euro €100,000) in case of undertakings performing road freight transport for hire or reward, over any period of three (3) consecutive fiscal years. The total amount of de minimis aid awarded to a single undertaking after 31st December 2023 may not exceed three hundred thousand euro (€300,000) over any period of three (3) consecutive years.

(2) Without prejudice to any further restrictions imposed by the Corporation in the Guidelines, in order to qualify for the benefit under sub-regulation (1), the undertaking:

(a) shall not employ more than thirty full-time employees, or equivalent, in its trade or business; and

(b) shall have a turnover or annual balance sheet total that does not exceed ten million euro (€10,000,000): Provided that as from 1st January 2018, in order to qualify for the benefit under sub-regulation (1), the undertaking shall not employ more than fifty full-time employees, in its trade or business.

(3) The tax credit referred to in this regulation shall be due as a deduction from tax payable by an undertaking on its chargeable income derived from its trade or business for that year of assessment established in accordance with the terms and conditions set out in the Guidelines, and, where the tax credit, for that year of assessment, exceeds the income tax payable by such an undertaking for that year, the excess in the tax credit shall be allowed to be carried forward to the subsequent year of assessment and deemed to be a tax credit for that year:

Provided that a tax credit shall not give rise to a right to a refund of tax:

Provided further that any tax credits shall be utilized by the year of assessment established in accordance with the terms and conditions set out in the Guidelines.

(4) Where an undertaking has benefited from the provisions of this regulation, the tax credit shall be deemed to have relieved from tax so much of that undertaking’s chargeable income which, when multiplied by the rates of tax at which it was chargeable in that year, is equal to the tax credit; and where the undertaking is a company and such undertaking or any subsequent company distributes the income which is so deemed to have been relieved from tax, such undertaking or undertakings shall state in the dividend warrant pertaining to any such distribution that such income has been relieved from tax by a tax credit in accordance with this regulation; and the tax which has so been relieved shall not be available for refund for any purpose of the Income Tax Act.

(5) (a) In the case of an undertaking which is a company, the chargeable income which is deemed to have been relieved from tax in accordance with sub-regulation (4) shall, for the purposes of the Income Tax Act, be allocated to the respective tax accounts of the company in question in accordance with the Tax Accounts (Income Tax) Rules and any dividends, or part thereof, distributed from such income shall be exempted from income tax in the hands of the members of the company on receipt of such distribution.

(b) Where a dividend referred to in paragraph (a) is distributed to a member which is also a company, in this sub-regulation is referred to as "the second company", the said dividend shall likewise be distributed by the second company to its members in the form of dividends exempt from income tax in the hands of the recipients, and where a member of the second company is again a company, the preceding provisions shall apply as though mutatis mutandis references to the first company were references to the second company, and as though references therein to the second company were references to that member, and the principle set out in this sub-regulation shall continue to be applied for as long as such income or part thereof to which this regulation applies are distributed by way of dividends.

(6) In case of a company, no tax credit shall be due to an undertaking under this regulation unless it is claimed in the appropriate section of a tax return submitted by electronic means by not later that the relative tax return date.

(7) No assistance in accordance with these regulations shall be granted by the Corporation on costs incurred after 31st December