Tax Credit Scheme for Small Businesses Launched

MEDIA ROOM

A tax credit scheme for small businesses, originally announced in the Budget, was launched this morning by Finance Minister Tonio Fenech.

Tax credit on investment

The Microinvest scheme, that could apply to about 28,000 businesses, will allow entities that employ less than 10 workers to benefit from a 40 per cent tax credit on investment. Gozitan businesses will benefit from a 60 per cent tax credit.

Businesses need not be a registered company but may be sole traders. Mr Fenech said the purpose of the scheme, that will managed by Malta Enterprise and run until the end of 2011, is for these small businesses to improve their business or employ new people.

The assistance is capped at €25,000 per entity but there is no limit on the number of businesses that can benefit from the scheme so long as they reach the eligibility criteria.

To benefit from this scheme, businesses must not have an annual turnover exceeding €2 million and must be registered with the VAT department and have all necessary permits. The tax credit can be used to refurbish, upgrade or invest in premises; purchase or upgrade new machinery and technology that would improve operations or generate energy, or on new wage costs that need not be full time.