1. International News
- European Commission approves Maltese State Aid scheme: COVID-19 Wage Supplement Scheme
- European Commission approves Maltese State Aid scheme: Research & Development Scheme
2. Legal Notices
- Legal Notice 161 of 2020 (Individual Investor Programme of the Republic of Malta (Amendment) Regulations, 2020)
3. Administrative Notices
- Press Release by the Parliamentary Secretariat for Financial services and Digital Economy
- Press Release: The Malta Development Bank appointed as implementing body of the Interest Rate Subsidy scheme to complement the MDB COVID-19 Guarantee Scheme
- Clarification: Six-month moratorium on loan repayments
- Commissioner for Revenue: Notice regarding Submission and Payment of TA22 and TA24 for Y/A 2020
- Commissioner for Revenue: Extension for the April provisional tax payment
- Press Release by the Ministry for the Economy, Investment and Small Business
1. International News
1.1 European Commission approves Maltese State Aid scheme: COVID-19 Wage Supplement Scheme
On 24th April 2020, the European Commission has approved a €215 million Maltese wage subsidies scheme to support companies operating in the sectors affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework to support the economy in the current COVID-19 outbreak.
The European Commission determined that this scheme is in line with the conditions set out in the Temporary Framework. In particular:
- the measure will finance part of the wage costs for employees that would otherwise have been laid off;
- the aid is proportional as it is capped at €800 per full-time employee per month; and
- the scheme respects the maximum duration of 12 months.
1.2 European Commission approves Maltese State Aid scheme: Research & Development Scheme
On 22nd April 2020, the European Commission has approved a €5.3 million Maltese direct grants scheme to support investment in R&D related to the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework to support the economy in the current COVID-19 outbreak.
The public support will take the form of direct grants and the scheme will be accessible to companies of all sizes, including public entities, that have an establishment in Malta and intend to carry out R&D projects on coronavirus and other antiviral relevant R&D projects.
The European Commission press release provides that the aim of the scheme is to support the development of innovative solutions to the current coronavirus health crisis, such as relevant medicinal products and treatments, medical devices, hospital and medical equipment, disinfectants, data collection and processing tools, and applications supporting better dissemination of recommendations by health authorities. At the same time, the scheme aims to improve foresight tools and methodologies for the future, by drawing on lessons learnt from the current pandemic.
The aid intensity varies between 80% and 100% of the costs incurred by the beneficiary, depending on the type of activity performed and on the presence of cross-border collaborations. Furthermore, under the scheme, any results to the research activities will be made available to third parties in the European Economic Area through non-exclusive licences.
2. Legal Notices
2.1 Legal Notice 161 of 2020 (Individual Investor Programme of the Republic of Malta (Amendment) Regulations, 2020)
By virtue of this Legal Notice, the percentage of an IIP’s contribution which is paid into the National Development and Social Fund has been decreased from 70% to 20%.
3. Administrative Notices
3.1 Press Release by the Parliamentary Secretariat for Financial services and Digital Economy
A press release published on 23rd April 2020 has announced that the Malta Council for Science and Technology is launching a COVID-19 R&D Fund to provide innovative and/or improved approaches with regards to the current and / or other antiviral relevant research, control and contain the spread.
This follows the approval of this scheme by the European Commission’s State Aid arm. The press release provides that eligible projects could address:
- relevant medicinal products (including vaccines) and treatments, their intermediates, active pharmaceutical ingredients and raw materials; medical devices, hospital and medical equipment (including ventilators and protective clothing and equipment as well as diagnostic tools) and necessary raw materials; disinfectants and their intermediary products and raw chemical materials necessary for their production;
- data collection and processing tools related to innovative and/or improved approaches with regards to current and/or future infectious disease prevention;
- the trajectory of the epidemic/pandemic disease;
- applications aimed at a better dissemination of recommendations by national (Public Health) and/or international health authorities (WHO);
- any other antiviral relevant research that can lead to human epidemy.
The proposal should be novel and not correspond with ongoing or completed projects funded by other instruments, programmes or projects. Projects that have received a COVID-19-specific Seal of Excellence quality label under the Horizon 2020 SME-instrument would also be eligible to apply under this fund.
Proposals must be timely, with rapid activation, to enable early and valuable outcomes to be established. Successful proposals will see Maltese entities entering into a Grant Agreement with MCST and Malta Enterprise. All aid must be awarded by 31 December 2020.
3.2 Press Release: The Malta Development Bank appointed as implementing body of the Interest Rate Subsidy scheme to complement the MDB COVID-19 Guarantee Scheme
MDB has been appointed by the Government of Malta as the entity responsible for the implementation of the Interest Rate Subsidy scheme. This will enable a more streamlined approach with MDB as the one-stop shop for the management of the CGS and the interest rate subsidies on loans covered by the CGS.
The press release issued by MDB has clarified that through the Interest Rate Subsidy Scheme, businesses will be benefitting from a subsidy of up to 2.5% on the interest rate charged by banks during the first two years of working capital loans guaranteed by the CGS. This interest rate subsidy will reinforce the benefits that businesses will be experiencing through the Government guarantee fund of €350 million under the CGS, which include enhanced access to finance, longer repayment terms, a moratorium on both capital and interest and lower interest rates.
The MDB will be providing more information on the CGS and on the Interest Rate Subsidy Scheme in a FAQ section that is expected to be published on the MDB website soon.
3.3 Clarification: Six-month moratorium on loan repayments
On 23rd April 2020, the Central Bank of Malta issued a communication to give further guidance to banks on the treatment of accrued interest during the moratorium period.
The Guidance provides that during the course of the moratorium, interest is to be accrued but not capitalised, such that no interest compounding occurs during this period. This accrued interest would subsequently be recovered on a straight line basis (spread equally) across the remaining modified maturity term of the loan after the end of the moratorium period. Borrowers could enter into mutual agreements with their credit or financial institutions for different repayment plans - such as shorter terms and higher payments or vice versa - as long as no compounding on the deferred interest accrued during the moratorium occurs.
3.4 Commissioner for Revenue: Notice regarding Submission and Payment of TA22 and TA24 for Y/A 2020
On 23rd April 2020, the Commissioner for Revenue issued the following notice with respect to the payment of taxes on part-time self-employed income (where tax is paid in accordance with article 90A of the Income Tax Act) and rental income (where tax is paid in accordance with article 31D of the Income Tax Act):
- Payments can only be made at Malta Post until 30/04/2020.
- Payments including interests can continue to be made online after 30/04/2020 on the CfR website (TA22, TA24). Interests are calculated by the system when filling in details.
- Payments by cheque (payable to CfR) after 30/04/2020 sent to the office of the CfR will only be accepted if they include the interest incurred. Any cheques received after that date not including interests will be returned to taxpayers to adjust amounts of the cheque to include interest.
- In case of difficulty to know the amount of interest incurred, taxpayers are to call 153 for assistance.
The deadline for payment of both these taxes is 30th April 2020.
3.5 Commissioner for Revenue: Extension for the April provisional tax payment
The Commissioner for Revenue has published a notification on 27th April 2020, providing that the April Provisional Tax submission deadline has been extended from 30th April 2020 to 31st May 2020. The publication also provides that the Provisional Tax claims will not be sent by mail for the time being but are being made available on CFR e-services.
3.6 Press Release by the Ministry for the Economy, Investment and Small Business
During a press conference held on 24th April 2020, the Minister for the Economy, Investment and Small Businesses said that:
- more than €10 million have been disbursed so far as part of the COVID-19 Wage Supplements for 83,000 employees;
- the focus of the Ministry’s work has now shifted on means to re-stimulate the economy once health measures start to be lifted gradually; and
- the economic support measures will not be stopped abruptly when businesses reopen but will remain in place until businesses would have started to recover substantially.