Emergency Measures

COVID-19: Emergency Measures in Malta | Update 9

This is the 9th update on COVID-19 related measures.   

1. International News 

1.1  Russia seeks to protect its tax base as a consequence of COVID-19

In an address to the nation on 25 March 2020 on the COVID-19 outbreak, the President of Russia announced a number of tax measures, one of which was the following:

“First, all interest and dividend income that flows from Russia and is transferred abroad into offshore jurisdictions must be taxed properly.

Today, two thirds of these funds, and basically we are talking here about incomes of specific individuals, are taxed at the rate of only 2 percent, thanks to so-called optimization strategies of all kinds. At the same time, people with modest salaries pay an income tax of 13 percent. This is unfair, to say the least.

For this reason, I suggest that those expatriating their income as dividends to foreign accounts should pay a 15 percent tax on these dividends. Of course, we will need to amend Russia’s double taxation treaties with some countries. I ask the Government to work this out. If our foreign partners do not accept our proposal, Russia will unilaterally withdraw from these treaties. We will begin with countries that attract substantial resources from Russia, which is a very sensitive issue for our country.”

Sources: http://en.kremlin.ru/events/president/transcripts/63061;

https://www.ey.com/en_ru/tax/tax-alert/2020/03/ey-tax-rise-planned-for-russian-source-income-26-march-2020-tax-rus

1.2  Recommendation issued by the European Central Bank

On 27 March 2020, the ECB issued the following recommendations:

  • The ECB recommends that at least until 1 October 2020 no dividends are paid out and no irrevocable commitment to pay out dividends is undertaken by the credit institutions for the financial year 2019 and 2020 and that credit institutions refrain from share buy-backs aimed at remunerating shareholders.
  • Credit institutions that are unable to comply with this Recommendation because they consider themselves legally required to pay-out dividends should immediately explain the underlying reasons to their joint supervisory team.
  • This recommendation applies on a consolidated level of a significant supervised group as defined in point (22) of Article 2 of Regulation (EU) No 468/2014 of the European Central Bank (ECB/2014/17)4 and on an individual level of a significant supervised entity as defined in point (16) of Article 2 of Regulation (EU) No 468/2014 of the European Central Bank (ECB/2014/17), if such significant supervised entity is not part of a significant supervised group.

Source: https://www.ecb.europa.eu/ecb/legal/pdf/ecb_2020_19_f_sign.pdf

1.3  Statement from the European Commission President

In a statement issued on 28 March 2020, the President of the European Commission announced that the Commission will participate in the discussions relating to the proposals to fight the economic effects of the coronavirus crisis which the group has been tasked by the European Council to come up with within the next few weeks.  The Commissioner add that it will be ready to assist should it be supported by the Eurogroup.

The President further announced that:

  • the Commission is working on proposals for the recovery phase within the existing treaties, including the full flexibilization of existing funds, such as the structural funds;
  • to ensure recovery, the Commission will propose changes in the Multiannual Financial Framework proposal that will allow to address the fallout of the same crises; and
  • at this point, the President is not excluding any options within the limits of the treaty.

Source: https://ec.europa.eu/commission/presscorner/detail/en/statement_20_554

2. Legal Notices 

2.1  Legal Notice 110 of 2020 (Extension of the Validity of Development Permits Regulations, 2020)

This Legal Notice provides that any development permit which is still valid but which is due to expire by 31st December 2022, or any earlier date, shall have its remaining period of validity extended by an additional 3 years. 

2.2  Legal Notice 111 of 2020 (Protection of Vulnerable Persons Order, 2020)

The Superintendent of Public Health has ordered that ‘vulnerable persons’ are to remain segregated in their residence. Such persons may leave their residence to attend medical appointments, obtain medical care or treatment, acquire food, medicine, other daily necessities or attend to other essential or urgent personal matter, but their time outdoor should be limited to the least time possible. These persons shall, at all times, exercise social distancing.

The Order applies to the following persons:

  1. persons of 65 years of age or over
  2. pregnant women
  3. persons suffering from the following chronic illnesses and, or medical conditions:
    • insulin-dependent diabetics
    • patients who are immunosuppressed
    • patients undergoing any immunosuppressive treatment including but not limited to the use of biological agents and immunomodulators
    • patients suffering from cancer who are undergoing chemotherapy
    • patients suffering, or who have suffered, from cancer having undergone chemotherapy at any time within the last 6 months
    • patients on dialysis
    • patients who are to be admitted to hospital with respiratory problem exacerbations
    • patients who, at any time within the last year, have been admitted to hospital with respiratory problem exacerbations
    • patients suffering from cardiac disease who are to undergo a cardiac intervention or a cardiac surgical procedure
    • patients suffering, or who have suffered, from cardiac disease having undergone a cardiac intervention or a cardiac surgical procedure at any time during the last 6 months;
    • patients attending a heart failure clinic; and
    • patients on oral steroids.

Persons who are referred to above and who occupy a public office, are Members of Parliament, are employed in the health services sector or are healthcare professionals and/or who occupy an essential headship position, shall be exempt from this measure unless that person chooses otherwise.  

3. Administrative Notices

3.1  Applications for COVID Wage Supplements made available online and lists of enterprises updated

The list of eligible enterprises for the full (5-day) and partial (1-day or 2-day) wage supplements has been updated as of 29 March 2020. Enterprises carrying out activities in Annex A are entitled for 5-day wage supplements, whilst those carrying out activities in Annex B are entitled to a 1-day or 2-day wage supplements.

For this purpose, please find below links to the relevant Annexes:

Annex A: https://covid19.maltaenterprise.com/wp-content/uploads/2020/03/Annex-A.pdf

Annex B: https://covid19.maltaenterprise.com/wp-content/uploads/2020/03/Annex-B.pdf

In addition, applications for COVID Wage Supplements may be submitted through the following link: https://covid.maltaenterprise.com/wagesupplement

The application may be submitted by companies, registered/unregistered partnerships, cooperatives, voluntary organisations and self-employed individuals which have either experienced a complete suspension of business or a loss of business resulting in at least 25% reduction in revenue compared to the same period in 2019.

The application also clarifies a number of matters, including the following:

  • Employees being supported through a COVID Wage Supplement cannot be made redundant by their employer.
  • The provision of a COVID Wage Supplement does not exempt the employer from its obligations towards its employees, as dictated by applicable laws and regulations.
  • The employer may not claim any public funding in respect to and State Aid support on the basis of wages covered by the COVID Wage Supplement.
  • The COVID Wage Supplement must be recorded separately on the employees’ payslip an FS3 as COVID Wage Supplement.
  • National Insurance on COVID Wage Supplements, as due by the employee, shall be deducted a priori by the Corporation, therefore funds disbursed by the Corporation to the employer shall be forwarded IN FULL to each respective employee, as applicable.
  • The employer shall pay his share of N.I. on COVID Wage Supplements disbursed by the Corporation.
  • All COVID Wage Supplements are non-taxable.

3.2  Applications for COVID Quarantine Leave Costs support made available online

Applications for COVID Quarantine Leave Costs support may be submitted through the following link: https://covid.maltaenterprise.com/quarantineleave

3.3  Commissioner for Revenue issues extension for the submission of Financial Account Information for reporting year 2019

In terms of this extension, Reporting Malta Financial Institutions must report the information specified in Section I of Annex I to the Cooperation with other Jurisdictions on Tax Matters Regulations, (S.L. 123.127) by not later than 30th June 2020 in relation to Reporting Year 2019.

Source: https://cfr.gov.mt/en/inlandrevenue/itu/Documents/Guideline%20in%20relation%20to%20the%20deadlines%20following%20the%20outbreak%20of%20the%20COVID-19.pdf