Tax Deferral scheme update

Further to the announcement issued by the Minister of Finance that the tax deferral scheme will be extended, the website of the Inland Revenue Department has been updated with further details, a summary of which is being included hereunder.

The eligible taxes that can be deferred are provisional taxes, Social security contributions for self-employed, and VAT for the period between August 2020 and December 2021. These payments need to be settled as from May 2022.

The tax deferral scheme is open to companies and self-employed businesses that suffered a significant downturn in their turnover and face substantial cash flow difficulties as a result of the economic constraints arising from the coronavirus pandemic. By significant downturn in turnover, the guidelines still mention a drop of circa 25% or more in sales on the basis of a 3 month period in which March 2020 would be either the first or the second month.

Companies and self-employed persons which have failed to comply with their tax obligations (submission of documents/returns and payments) falling due by the 31st December 2019 and those who opted to pay VAT under the Mini One Stop Shop (MOSS) are specifically excluded.

Applications for this scheme are to be submitted by the 15th May 2021 through the Malta Enterprise website. Companies and self-employed businesses that have applied for the deferral of taxes between March and May 2020 need not re-apply as they will automatically be considered for the extended period till December 2021.

Should you need further information about the scheme, please contact us at support.covid19@mazars.com.mt

Publication date: 07/04/2021