Tax Deferrals and Teleworking schemes

Early last week, the Prime Minister of Malta Dr. Robert Abela, published a package of financial assistance targeted at businesses which are experiencing difficulties because of the Covid-19 pandemic, two of which were certain tax payment deferrals and grants for employers who have implemented teleworking facilities.

Both these incentives are being administered by Malta Enterprise, and businesses that want to apply for these schemes have to submit an application form by 15 April 2020 in the case of the tax deferral scheme and by 30 March 2020 in respect of the teleworking scheme.

Tax Deferrals

The objective of this scheme is to improve business liquidity by deferring the deadline for certain tax payments during a period where businesses are expected to experience cash flow problems arising from the economic impact of the coronavirus pandemic. It is important to note that submissions of tax and VAT declarations should still be submitted on time. 

Which businesses are eligible to apply for this scheme?

The scheme is open to all businesses (including online and land-based gaming) who are tax and VAT compliant as of 31 December 2019 and which are experiencing a significant downturn in their turnover. Other businesses are encouraged to settle their liabilities on time.

Which are the eligible taxes?

Tax payments eligible for a deferral applies to liabilities falling due in March and April 2020. 

  • Provisional taxes
  • Employee taxes (FSS)
  • Social Security contributions
  • Maternity Fund Contributions
  • VAT

By when should businesses settle these taxes?

Interests for late payment will not be incurred if:

(a) the eligible taxes (excluding VAT) are settled in 4 equal monthly installments in the 4-month period between May and August 2020;

(b) VAT liabilities are settled in 2 equal installments with the 2 quarterly returns immediately following the quarter whose dues would have been deferred.

What does the application process involve?

Application forms can be submitted electronically through the government online services

Teleworking Scheme

This call for application is being issued in terms of the Business Development and Continuity scheme which was published in January 2020.  Incentive Guidelines and an application form have been published by Malta Enterprise and the salient details are included below:

Which businesses can apply for this scheme?

The call is open to all undertakings irrespective of size and sector which offer teleworking services that enable connection to company data remotely.

In which form will the aid be provided?

The assistance is in the form of a cash grant limited up to €500 per teleworking agreement and €4,000 per undertaking. This assistance is subject to the de minimis regulation, which limits the total support per single undertaking to €200,000 over a rolling period of three fiscal years and to €100,000 for undertakings engaged in Road Freight Transport. The government has allotted a total budget of €2,000,000 for this scheme

How is the value of the cash grant calculated?

The grant is calculated at 45% of the eligible cost which must be incurred after the 1st of March 2020 and before the 30 March 2020. Eligible costs are:

(a) Purchasing and/or leasing of computer hardware (included operating systems) which are considered portable including installation and setting up of connectivity software.

(b) Communication solutions (hardware and software) that allow different users to connect to their place of work (VPN, Point-to-point connection, etc.)

The grant will be granted so long as a formal teleworking agreement is in place and the employee can effectively work remotely

How can businesses apply?

Apart from submitting an application form, published by Malta Enterprise, one would have to submit:

(a) Copy of invoices covering the expenses to enable the teleworking scheme;

(b) A signed teleworking agreement, which should not be dated prior to the 1st March 2020;

(c) An explanation on how teleworking will function and the manner in which employees will be able to access company data remotely;

(d) Once Malta Enterprise issues the letter of approval, the business would have to install the equipment at the employees’ residence within 2 weeks from the approval letter; and

(e) For a period of 3 months following the approval letter, the business should submit to Malta Enterprise monthly reports on the teleworking activity

Is there anything else that businesses should know?

The application for this scheme will not be considered by Malta Enterprise if:

(a) in the last 12 months, the business had teleworking arrangements in place;

(b) the business (including group entities in terms of the definition of single undertaking) has already benefited from other aid which exceeded the de minimis limits; and

(c) the application for aid is not submitted by the 30th March 2020

These incentives shall be handled by Malta Enterprise via the email address or by calling 144.

Publication date: 23 March 2020