TAX DEFERRAL SCHEME
- JUNE 8 UPDATE: This scheme was meant to cover a wide range of taxes initially for the months of March and April. The taxes included Provisional Tax, VAT and National Insurance Contribution on salaries. The period was extended to cover another two months, up to the end of June. National Insurance, income tax and maternity contributions will now start to be paid from 1 July. Other taxes due by companies have been deferred to the end of August. Companies can pay the deferred tax by May next year, with no interest charged.
The incentive is primarily aimed, but not limited to, the tourism and hospitality, entertainment, transport, and manufacturing sectors. Enterprises will still collect National Insurance on their employees’ wages, but will keep these dues for the duration of the deferral.
Without prejudice to the right of each enterprise to prove a “significant downturn in turnover” in its specific circumstances, a drop of circa 25% or more in sales registered would certainly satisfy this condition.
This would be ascertained on the basis of a 3 month period in which March would be either the first or the second month, i.e. either from February to April or else from March to May 2020 as compared with the same period of 2019.
Naturally, this would in part be based on estimates but as long as such estimates are drawn up in a reasonable manner then they should suffice.
Enterprises claiming this benefit should keep records of these estimates.
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 who opted to pay VAT under the Mini One Stop Shop (MOSS).
FURTHER LIQUIDITY MEASURES
- Malta Development Bank ‘COVID-19 Guarantee Scheme’
The MDB COVID-19 Guarantee Scheme (CGS) provides guarantees to commercial banks in order to enhance access to bank financing for the working capital requirements of businesses in Malta facing a sudden acute liquidity shortage as a result of the COVID-19 outbreak.
The CGS has been approved by the European Commission under the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak.
Further details on this scheme can be accessed through the website of The Malta Development Bank: https://mdb.org.mt/en/Schemes-and-Projects/Pages/MDB-Working-Capital-Guarantee-Scheme.aspx
- Three-month moratorium from banks for business or personal loans. This will alleviate the burden of bank loans for ALL persons and businesses in this challenging period. Please contact your local bank for assistance.
- Parents who both work in the private sector requiring one of the parents to stay at home to take care of school-aged children will receive a direct payment of €166.15 per week if working fulltime or €103.85 per week if working part-time provided that they cannot carry out their functions through teleworking arrangements. This measure also applies for single parent families who have school-aged children.
- Employees who had their full-time employment terminated as of 9th March 2020, including those who were self-employed, as a result of the COVID-19 pandemic will be eligible for the Contributory Unemployment Benefit and will receive a direct payment of €166.15 if work was in full-time before you became unemployed or €103.85 per week if work was part-time before becoming unemployed.
- Government will increase rent subsidies for individuals who have their job terminated.
- Employers who have or had a member of their staff (including themselves) on mandatory quarantine leave in accordance with the directives of the Superintendent of Public Health are entitled to a one-off lump sum grant of €350.
- The grant is also applicable for members of staff who had to quarantine themselves in view of possible contact with individuals who were directly at risk of infection, such as living in the same dwelling or in the same workplace.
- This measure only covers grants for full-time employees.
Applications need to be submitted within 30 DAYS from the start of the quarantine of the individual. Applications are to be submitted by the employer in the attached form: