Micro Invest – Tax Credits for Micro Enterprises and the Self-Employed

The objective of the Micro Invest scheme, lead by the Malta Enterprise, is to encourage start-ups, family businesses, and the self-employed to invest in their business and expand their operations. The scheme aims to support micro-enterprises and the self-employed through a tax credit, which is calculated as a percentage of eligible expenditure.

Eligibility

The incentive is open to micro-enterprises and the self-employed which satisfy all the following conditions at the point of application:

• The applicant must employ at least one person (full/part-time basis), but not more than 50 full time employees during the year in which the costs were incurred;
• The applicant must not have a turnover or annual balance sheet total exceeding €10million in the fiscal year preceding the year in which the application is submitted; and
• The applicant must be registered with the VAT department, unless it qualifies for an exemption.

Eligible Costs

• Micro-enterprises and the self-employed may apply for a tax credit on the following eligible expenditures:
• An increase in wage costs exceeding 3%, calculated by deducting from wage costs incurred in the relevant fiscal year, the highest annual wage cost incurred in the preceding two fiscal years.
• Costs incurred for services rendered by unrelated parties, for the furbishing and refurbishing and upgrading of business premises covered by a number of Planning Authority Licenses.
• Investment costs incurred in acquiring new (or first time used in Malta) machinery, technology, apparatus and instruments; systems intended to produce alternative energy or to improve energy efficiency, unless receiving other state aid support; and tangible and intangible assets required for digitisation of business operations such as computer hardware and software.
• Costs for the purchase of any commercial vehicle procured as new or first time registered in Malta having a European Emission Standard rating of at least Euro 5. The maximum support for the procurement of motor vehicles powered by a fossil fuel engine is capped at 30%.
• Costs incurred for attaining certifications relevant to their business, including business advisory provided by unrelated parties as well as the actual certification costs of any of the following:
  • CE Markings
  • ISO 9001 Quality Management Systems
  • ISO 14001 Environmental Management Systems
  • ISO 50001 Energy Management
  • ISO 22000 Food Safety Management
  • HACCP

Maximum Aid

The maximum eligible tax credits per single undertaking is capped at €50,000 over any period of three consecutive fiscal years, starting from eligible expenses incurred and paid for during the year preceding the year in which the claim is submitted. However, the capping shall be increased by €20,000, up to a total of at €70,000, for undertakings operating from Gozo; those registered as a family business; and those having more than 50% of the ownership attributed to female persons.

Deadlines

The deadlines to submit a Micro Invest tax credit application for investments carried out in 2022 are as follows:

Applications filed by the primary deadline will get the tax certificate to be used as from basis year 2022 (year of assessment 2023), whereas in the case of late submissions but by 13th December 2023, the tax certificate will be valid as from basis year 2023 profits (year of assessment 2024).

If you are a micro-enterprise or a self-employed individual who invested in assets or staff during 2022, you might be eligible for a Micro Invest Tax Credit. Contact Ecovis Malta if you want to know more about this scheme and whether your company could benefit. Ecovis can assist with the filing of your application.

Josef Debono
ECOVIS Malta – Accountancy and Taxation Director

Dr. Roberta Avellino Pule
ECOVIS Malta – Snr. Legal Consultant