Investment Aid Tax Credits (2014 – 2020)

Investment Aid Tax Credits are intended to sustain the regional industrial and economic development of Malta. This measure facilitates initial investments by encouraging the setting up of new establishments as well as, the expansion and development of existing businesses. The Investment Aid provided under these guidelines calculated as a percentage of qualifying expenditure incurred may take the form of tax credits and/or cash grants.

These incentive guidelines shall be affective from 1st January 2018 and unless reviewed or updated shall remain in force until 31st December 2020.

Eligible undertakings are small and medium-sized enterprises in terms of Annex I of Commission Regulation (EU) No 651/2014, as well as large undertakings. To be eligible for aid through this incentive, an undertakings must operate from Malta and be incorporated in the European Union as a partnership en nom collectif, en commandite or a limited liability company, cooperative, family business or similar set-up. A legal entity shall only be supported in respect of eligible investments in one or more of the qualifying activities. These activities are;

  • Manufacturing

  • Repair, overhaul or maintenance

  • Industrial Services

  • Laundry and Dry cleaning

  • Information Technology

  • Call Centre Activities

  • Research and Development, and Innovation

  • Eco-innovation, waste treatment and environmental solutions

  • Biotechnology

  • Pharmaceuticals

  • Facilities for Filming and Audiovisual productions

  • Provision of Education

  • Provision of private health care services

  • Freeport Operation

  • Logistics Support

  • Industrial Packaging

  • Hotels, guest houses, and similar tourist accommodation facilities

  • Knowledge intensive business services

  • Cultural Restoration

  • Cultural and sports facilities

Any entity (legal person) in possession of tax credits awarded under this measure that as part of its activities also carries out following activities shall lose entitlement to those tax credits. The carrying of these activities within another entity in the same undertaking will not result in such loss of benefit.

  • Sale by Retail

  • Catering

  • Gambling

Qualifying Expenditure

Eligible expenditure shall be considered to be tangible and intangible assets. The value of qualifying expenditure is calculated either as the value of qualifying assets acquired in relation to an initial investment project or the value of wage costs for jobs directly created by the initial investment project. In any case all figures used shall be taken before any deduction of tax or other charge (unless such taxes or charges are otherwise recoverable).

Qualifying tangible assets

For the purpose of this incentive, ‘Qualifying tangible assets’ means assets consisting of land, buildings and plant, machinery and equipment. The assets acquired shall be new except for SMEs and for the acquisition of an establishment. In any case, the assets need to be first time used in Malta.

Qualifying Intangible Assets

For the purpose of this incentive, ‘Qualifying Intangible assets’ means assets that do not have a physical or financial embodiment such as patents, licences, know-how or other intellectual property.

Applicable Aid Intensity

For projects where the ‘start of works’ is on or after 01/01/2018 and before 31/12/2020, the total amount of investment aid that may be awarded in terms of these regulations for a given investment project shall not exceed:

  • 30% of the qualifying expenditure for an undertaking which qualifies as a ‘Small’ undertaking;

  • 20% of the qualifying expenditure for an undertaking which qualifies as a ‘Medium-sized’ undertaking;

  • Hotels are eligible to, 10% of the eligible expenditure in the case large undertakings, and 15% in the case of small and medium undertakings.

  • 10% of the qualifying expenditure for an undertaking which qualifies as a ‘Large’ undertaking;