Malta Enterprise has issued an announcement on its website stating that the deadline for registering new applications for the COVID-19 Wage Supplement is tomorrow, 19 June 2020. New applications received after that date shall not be considered. Those applicants who have already applied do not need to apply again. Applicants who have submitted their application for May but have not yet confirmed their list of employees are urged to reply to Malta Enterprise's request for confirmation.
Businesses which are benefitting from the Wage Supplement should also note that the process for claiming the Rent Refund and the Electricity Bill Refund respectively, both announced as part of Malta's Economic Recovery Plan launched on the 8th June 2020, will be linked to the confirmation of the Wage Supplement for the July period. Malta Enterprise has notified that applicants for the Rent Refund support measure need to provide a valid rent agreement in order to benefit from this incentive. The rental agreement should specify a clear annual or monthly rental fee.
Transfer Duty and Property Transfer Tax reduced rates
Following the launch of Malta's Economic Recovery Plan aimed at the regeneration of the economy following the COVID-19 pandemic, which measures include a reduction in the transfer duty on the acquisition of immovable property from 5% to 1.5%, and a reduction in the final tax on the sale of immovable property from 8% to 5%, the Exemption of Duty in Terms of Article 23 Order (SL 364.12) has been revised by virtue of LN 240 of 2020, whilst the Exemption from Tax on Certain Property Transfers Rules 2020 were published by virtue of LN 241 of 2020, to give effect to these measures.
LN 240 of 2020
The new article 5 of this Order provides that, in the case of a transfer inter vivos of immovable property or any real right over such property made on or after the 9th June 2020 but before the 1st April 2021, the duty otherwise chargeable thereon in terms of the Duty on Documents and Transfers Act on the first €400,000 of the amount or value of the consideration for the transfer shall now be chargeable at the reduced rate of 1.5%.
Said article 5 sets out the conditions which apply, including that: the purchaser does not require an AIP permit; notice of the final deed of transfer is to be given to the Commissioner for Revenue by not later than the 30th April 2021; and no relief is to be claimed under article 32C of the Duty on Documents and Transfers Act on the transfer concerned.
LN 241 of 2020
Rule 4 of the Exemption from Tax on Certain Property Transfers Rules 2020 provides that, subject to the provisions of rule 6 (which contains rules for 'structured arrangements'), a person who makes a transfer to which these Rules apply (see below) shall be exempt from the tax otherwise chargeable on that transfer in terms of article 5A of the Income Tax Act to the extent that it exceeds the tax calculated in accordance with Rule 5, on condition that the tax so calculated is duly paid in accordance with the provisions of article 5A(11) of the Income Tax Act.
The Rules apply to any transfer of immovable property that satisfies all the following conditions: the transfer is made on or after 9th June 2020 but before 1 Aprilth 2021; in terms of article 5A of the Income Tax Act, the transfer would otherwise be subject to tax at the rate of 8% or 10%; notice of the transfer required in terms of rule 22(2) of the Tax on Property Transfers Rules is delivered to the Commissioner for Revenue by not later than 30th April 2021.
According to Rule 5, where the above conditions are all satisfied, the tax on the first €400,000 of the transfer value of the property or real right concerned shall be computed at the rate of 5%. The tax on the remainder of the transfer value shall be computed at the rate of 8% or 10%, as the case may be, in accordance with the applicable provisions of article 5A of the Income Tax Act.
How can we help?
We are monitoring developments on an ongoing basis and will provide further updates as more information becomes available. Meanwhile, should you require any assistance relative to how you may benefit from the above reduced tax rates, the Economic Recovery Plan generally, the COVID-19 Wage Supplement measure, the Tax Deferral Scheme, Malta's Financial Aid package and the various Malta Enterprise support measures, please do not hesitate to reach out to us personally.
Originally published 18 June, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
