DConsulta

27/11/2020

VAT chargeable on Directors’ Fees

Value Added Tax is a field which is continually evolving, especially following decisions taken by the European Courts of Justice (CJEU). As a result of the decision taken by the CJEU in the case C-94/19 (San Domenico Vetraria SpA vs Agenzia delle Entrate), the local practice to consider the fees paid to companies who refer Directors to their clients, fall outside the scope of VAT in Malta, is no longer tenable. Previously the practice was to consider such fees, even if charged by a company service provider, to be exempt from VAT on the basis that such fees are deemed to constitute a remuneration for holding an office and hence out of scope for VAT. However, taxpayers are now advised to look into this practice deeply, analyse the situation properly and take corrective action where necessary so as to ensure that their practices do not run foul of such developments in the field.

For more information and advice kindly contact us on [email protected]

26/11/2020

VAT Implications on Secondment of Staff:

The decision taken by the Court of Justice of the EU (CJEU) in March 2020 in the case C-94/19 (San Domenico Vetraria SpA vs Agenzia delle Entrate), is of interest to companies which engage in the practice of lending or secondment of staff, within the same group of companies or in other scenarios. The CJEU held that such lending or secondment is not deemed to be an activity that falls outside of scope for VAT purposes. Thus, such supply of labour shall give rise to the charging of VAT, and this reasoning applies independently of whether the consideration or fee charged is equal to, greater than or less than the costs incurred by the employer.

This decision is interesting as the till now, many professionals in the field of VAT and accountants, have argued that staff is seconded at cost incurred by the actual employer, there is no value added involved and hence no VAT is to be charged on such a transaction.

For more information and advice kindly contact us on [email protected]

23/11/2020

Extension of Deadline for electronic company tax returns

The Office of the Commissioner for Revenue has notified that in view of delays that the COVID-19 pandemic may be causing in the preparation and submission of company tax returns by company directors and tax practitioners, the electronic filing deadline for year of assessment 2020 tax returns in respect of companies having a 31 December 2019 accounting year-end is being further extended to 16 December 2020. This extension does not affect either the timing of the payment of tax nor the submission of manual tax returns, which are now overdue in both cases.

25/10/2020

Property Related Measures – Malta Budget 2021 Highlights

The section of the annual government budget related to fiscal measures applicable to the Property Sector, is always highly anticipated by operators in the sector and also by potential customers. These are the relevant highlights:
Authority Regulating the Sector
A new Authority regulating the construction industry will be set up as from 2022, with the aim to safeguard health and safety, the local environment and to issue necessary standards and regulations governing this vibrant industry.
Compensation Fund
A Compensation Fund will be set up to provide redress for damages suffered by third parties.
New or Improved Schemes
• The duty-free portion on a donation of property by parents to their children for residential purposes has been increased to cover values up to €250,000
• The first €200,000 in inheritance of residential property will now be subject to the reduced tax rate of 3.5%
• The value of property exempted from tax for first time buyers has been increased from €175,000 to €200,000 thus capturing a wider audience for this particular tax incentive
Extension of Schemes
The reduction of duty on inter-vivos transfers of immoveable property from 5% to 1.5% for the first €400,000 will be renewed on promises of sale agreements registered by 31 March 2021 provided the contract is entered into by the end of 2021
For further information visit our Budget 2021 blogposts on

our work is underlined by our ability and patience to handle bureaucratic compliance requirements efficiently and effectively

24/10/2020

Fiscal Measures Package – Malta Budget 2021 Highlights

In his speech for Malta's fiscal budget 2021 Minister Scicluna announced various fiscal measures designed to incentives voluntary organisations, small businesses, and individuals alike, such as the following:
Pension Plans
The 25% tax credit of the annual contributions to private pension plans falling under the Third Pillar Pension Scheme will increase from the current €500 p.a. to €750 p.a. and to €1,500 to married couples with a single working spouse.
The same capping of €3,000 is also applicable to Voluntary Occupational Pension Schemes.
Royalties
A novel measure intended to promote literary works is the imposition of a special final tax at a rate of 15% on royalties.
VAT
The Minister announced that small businesses can now opt to be exempt from charging VAT on their sales up to €30,000 annual turnover – a substantial increase of €10,000 from current capping.
Partial Exemption on Surpluses of Voluntary Organisations
In a bold move, designed to promote the voluntary organisations sector, Government has decided that duly registered and compliant, Voluntary Organisations , would benefit from a tax exemption from income tax on their annual surpluses, if their annual income does not exceed €50,000. This measure will certainly incentivise this sector to expand.
For information on further fiscal measures we suggest you visit our blogposts on

our work is underlined by our ability and patience to handle bureaucratic compliance requirements efficiently and effectively

23/10/2020

Economic Stimulus via Infrastructural Projects – Malta Budget 2021 Highlights

In his Malta Budget 2021 speech the Minister of Finance clearly indicated the strategy of the government to stimulate the Maltese economy afflicted with the effects of the Covid-19 pandemic, by spending big on infrastructural projects.
Big infrastructural projects are indispensable for the economic regeneration of the country. The major investments mentioned in the 2021 Budget relate to:
 €450m investment over 7 years in industrial infrastructure and office space, in a new Life Sciences Park, Kordin Business Centre, office space for SMEs and logistical hub in Marsa
An investment of €11m in sports facilities over a three-year period
Furthermore, the government will also undertake various infrastructural interventions related to aviation maintenance, maritime sector, modernisation of health centres, new blood bank, new sports complex at the University of Malta and parking facilities at Mater Dei Hospital.
For further information visit our Budget 2021 blogposts on

our work is underlined by our ability and patience to handle bureaucratic compliance requirements efficiently and effectively

22/10/2020

COVID-19 & Economic Regeneration – Malta Budget 2021 Highlights

A key plank of the 2021 Malta Budget consists of measures to alleviate the impact of COVID-19 pandemic on the economy and steps aiming to regenerate the economy. Importantly, Government is committed to push forward this regeneration through financial stimuli. The key relevant measures were:
Wage Supplement Retention
Social partners were adamant that that the Wage Supplement Measure, which supports the most hit economic sectors, up to €800 monthly for full-timers, is extended beyond October. The Minister announced its extension till March 2021 whilst mentioning that steps will be taken to reconfigure the wage supplement to take account of business turnover.
New Set of Vouchers
Business operators in the tourism, accommodation, catering, and retail sectors were elated to hear that the successful scheme of €100 vouchers given to all residents over the age of sixteen, will be renewed. This time out of the €100 worth of vouchers, €40 will be directed towards the retail sector as against €20 in the first set.
For further information visit our Budget 2021 blogposts on

our work is underlined by our ability and patience to handle bureaucratic compliance requirements efficiently and effectively

31/07/2020

The Skills Development Scheme – An interesting opportunity

Malta Enterprise manages the Skills Development Scheme, which aims to support business undertakings to provide training and knowledge transfer initiatives that will support employees to acquire new skills, knowhow, and knowledge. A budget of €30m was allocated to this with a maximum grant applicable to any company of €2m. This measure is available to duly registered undertakings (including self-employed persons) that are engaged in a qualifying activity which includes, various sectors such as manufacturing, construction, financial services, education, ICT, transportation and professional services, amongst others.

The Corporation shall provide support in relation to the following costs:
o Consultancy costs for developing the training programme.
o Wage costs of trainees, covering direct contact hours during which the trainee is participating in the training.
o Wage costs of trainers, covering direct contact hours during which the trainer is delivering the training.
o Hourly costs covering direct contact hours of training service providers engaged to deliver training.
o Air Travel expenses incurred to send trainees to foreign training locations if the training is not available locally and it is more economically feasible than holding the training locally.
o Air Travel expenses incurred to bring trainers to Malta.
o Rental of Training rooms, tools, and equipment, to the extent that they are used exclusively for the training project.

If you require further information we suggest you visit the Blog on our website www.dconsulta.eu or else email us on [email protected] or give us a call on 79444990.

27/07/2020

A record of €2.25 billion in EU funding over the 2021-2027 period for Malta

Following the closure of the negotiations at the EU Council of last weekend, Malta is set to receive €2.25 billion in EU funding over the 2021-2027 budgetary period.

Malta’s allocation from the EU’s core budget – its multiannual financial framework (MFF) amounts to €1.9 billion with the remaining €327m granted as part of a coronavirus stimulus package.

The first graph below shows how the EU funding for this period compares with the previous funding round. The Covid-19 recovery instrument and recovery and resilience of the single market are two new sources of funding for EU countries.

The second graph outlines that funding under the migration, borders, security, education, and fisheries increased by 130%, research, innovation & environment by 72%, funds for agriculture by 38% and the Cohesion funds by 20%. The post-coronavirus stimulus package also affected some of the above increases. The EU also allocated €386m to the European Asylum Support Office which is Malta-based.

14/07/2020

Operational Assistance Scheme for Voluntary Organisations – Closes Soon

The Malta Council for the Voluntary Sector (MCVS) has issued applications for an Operational Assistance Scheme for Voluntary Organisations (VOs) to assist those VOs whose operations were badly affected by this pandemic.

A budget of €3m has been allocated for these applications to MCVS. These applications, whose deadline is the 31st July, aim to support up to 50% of the expenses to a maximum of €1,000 for fuel expenses, telephone and internet bills, Gozo mobilities and fixtures and equipment directly relate to Health & Safety issues – all related to COVID-19.

A wage supplement for staff costs for full-time and part-time employees engaged directly with the Voluntary Organisation and registered with Jobs Plus is also available. Finally, the Scheme covers utility bills with an aid intensity of 80% with a maximum of €250 for a three-month period.

If your organization requires assistance with the application for this scheme, which closes on the 31st July 2020, do contact DConsulta on 79444990 or by email on [email protected]. We would be glad to assist.

Utility Bills
1. The Scheme shall support up to 80% of the VO Utility Bills to a maximum of
€250 euros/3months.
2. VOs employing more than twenty-five (25) employees shall be eligible for up
to €1,000 euros/3months.
3. Utility bills need to be addressed on the VO’s name or the VO needs to have a
leasing agreement of the premises for which the utility bill is addressed.
4. Any reimbursement of Utility Bills, will be reimbursed for bills covering the
period March till September 2020 period.

12/06/2020

Mini Budget 2020 – Benefits for Households and Individuals
The Mini Budget 2020 announced on 8 June 2020, by Malta’s Prime Minister Dr Robert Abela and Minister of Finance Profs Scicluna contained various measures to assist households in this post-covid-19 scenario. These are some of the measures:
Personal Vouchers
All persons over the age of 16 will be given €100 in 5 vouchers of €20 of these, €80 are
redeemable in bars and restaurants and €20 in retail excluding supermarkets.

Tax Refunds
A cheque with tax refunds will be sent in the coming days to 210,000 employees, who worked in 2018. An average family where both parents work will receive up to €328.
Property
Taxation on buying or selling of property will be reduced even for those who have already signed a promise of sale. This will be extended till March 2021. Stamp duty for properties costing less than €400k will be reduced from 5% to 1.5% on contracts to be signed between June 9 and March 31 of next year.
Weddings
Couples who had to postpone their wedding will be eligible for a refund of €2,000.
In-work benefit
Families will receive a down payment of €250 each. The families who are eligible for the benefit will be expanded. The sum received per child will be increased.

11/06/2020

Mini Budget 2020 – Fiscal Incentives and Grants for Businesses

The Mini Budget 2020 announced on 8 June 2020, by Malta’s Prime Minister Dr Robert Abela and Minister of Finance Profs Scicluna contained various measures to assist businesses and households alike in this post-covid-19 scenario. In this blog we will be reviewing the fiscal incentives announced in this mini budget:
Tax Deferrals
The Tax Deferral Scheme, which covers Provisional Tax, VAT and National Insurance Contribution on salaries, has seen its period extended by 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.
Tax
Measures already announce for taxes and other contributions paid by businesses will be extended till the end of August.
Payment of these taxes will be deferred till the end of May 2021 and payment can be made by instalment.
Conversion of tax credits into grants
The Malta Enterprise managed micro-invest scheme will see 30% of such tax credits payable to applicants transformed into cash grants. Malta based businesses will receive up to €2,000 in cash, with this amount increased to €2,500 for Gozitan businesses.