Financial Aid for Businesses in Malta
The Government is offering the following financial incentives to support employers during the COVID-19 outbreak.
1. Financial incentives for employers intended to keep individuals in employment
This economic package will support businesses to retain their employees and be able to start operating straightaway once the situation changes and they are permitted to reopen.
- The government will be granting €350 per employee under quarantine to all employers to compensate for the 14 days mandatory quarantine leave. The application for the quarantine grant is available via https://covid19.maltaenterprise.com/quarantine-leave/
- Employers who suffered from the mandatory suspension of business will receive a benefit to cover its employees’ salaries amounting to €800 per month per employee. This is equivalent to the minimum salary (in the first year of employment) plus an additional €23 per month to each individual employed in the severe impacted sectors. In the case of employees on salaries higher than the minimum salary, the balance of the salary but up to €1,200 (that is an additional €400 salary by month) will need to be covered by the employers. However, depending on the circumstances of the employee, the Government expects flexibility from both employees and employers, especially in the cases where individuals earn more than €1,200 per month.
- Employers, employing part-time employees will be eligible for up to €500 per month per employee.
When the operations are completely closed down due to Covid measures taken by Government employees supported through those measures cannot be asked to take unpaid leave and the employer is obliged to pass on, as a minimum, the €800 wage subsidy (or €500 in case of part-time employees) less the employee’s national insurance contribution and government taxes to the employee.
A list of sectors by NACE code (Annex A) is available on https://covid19.maltaenterprise.com/wp-content/uploads/2020/03/Annex-A.pdf
d. Employers, who continued operating but suffered a downturn in operations of at least 25%, will receive a benefit to cover its employees’ salaries amounting to 1 day per week salary, based on a salary cap of €800 per month, that is a benefit of €160 per month per employee. There will be the possibility to increase the salary to 2 days per week on the basis of conditions still to be announced.
e. Employers, employing part-time employees will be eligible to one day’ salary per week, equivalent to €100 per month. In the case of Gozo based enterprises this will increase to two days’ salary per week equivalent to €320 per month for full time employees, and €200 per month for part time employees.
B list of sectors by NACE code (Annex B) is available on https://covid19.maltaenterprise.com/wp-content/uploads/2020/03/Annex-B.pdf
The COVID-19 Wage Supplement is being extended and will cover also the months of May and June. All applicants which filed an application by the 30th April do not need to reapply and will receive the supplement for the months of March to June. Entities that file the application after the 30th April will receive the wage supplement only for the months of May and June.
In order to simplify administrative processes funds will be forwarded to employers who will be obliged to guarantee that the Covid Wage Supplement as established above is forwarded to the employee. The application for the Wage Supplement scheme is available on https://covid.maltaenterprise.com/wagesupplement.
2. Financial incentives for employers to switch to remote operations
Employers who invest in the necessary technology to allow employees to work from home will be entitled to a partial refund of such capital expenditure. The scheme, administered by Malta Enterprise (ME), is open to all employers irrespective of size, and not restricted to any specific industry sector. The cash grant is capped at €500 per teleworking agreement and €4,000 per undertaking; and requires a telework agreement to be in place with the applicable employee/s whose role can be addressed through teleworking and can connect to the workplace via a VPN. The grant amounts to 45% of the eligible costs listed below, which costs have to be incurred between the 15 Februaury and 8 May 2020:
- Purchasing and/or leasing of computer hardware (included operating systems) which are considered portable including installation and setting up of connectivity software;
- Communication solutions (hardware and software) that allows different users to connect to their place of work (VPN, Point-to-point connection etc.)
An application for this grant must be filed with Malta Enterprise by the 8 May 2020. Once Malta Enterprise issues the letter of approval indicating the value of aid awarded, the employer is required to provide/install the necessary teleworking solution at the employee’s residence within 2 weeks. Moreover, the employer is required to submit monthly reports on the teleworking activity of the employee/s for the 3 months following the approval.
The application for the Facilitation of Teleworking Activities is available on https://covid19.maltaenterprise.com/teleworking/
3. Postponement of the March and April tax payments
- Provisional tax
- Employee taxes
- Maternity Fund payments and Social Security contributions
- Social Security contributions of self-employed persons
- Value Added Tax
The above taxes which fall due in March and up to end of June 2020 may be deferred.
Eligible taxes (excluding Vat) which were due in March and April are to be settled in four equal monthly instalments in the four-month period between May and August 2020. VAT dues are to be settled in two equal instalments with the two quarterly returns immediately following the quarter when dues would have been deferred. The Commissioner for Revenue will announce the due date for the payments, which are due in May and June through a future notice.
No interest or penalties will be imposed on the deferred taxes.
Companies and self-employed persons suffering a significant downturn in their turnover as a result of the economic constraints arising from the coronavirus pandemic and, as a result face substantial cash flow difficulty. The main industries identified in the online application form are:
- Hospitality and entertainment
- Hairdressing and beauty treatment
- Physical wellbeing
- Other industries.
Companies and self-employed persons not adversely hit are advised and encouraged not to avail themselves of this scheme. Ideally, eligible taxes should continue to be paid every month and on time because that would make for good business management. The benefit granted under this scheme shall not remove the obligation of beneficiaries to submit documents and returns by the due date as required by law.
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. Moreover, the benefit granted under this scheme shall be forfeited if the beneficiary is found to be in breach of any of its terms and conditions making use of this scheme under false pretenses. In case of forfeiture, beneficiaries will have to settle their dues as demanded by the Commissioner for Revenue and such payments shall be subject to interest or penalties as stipulated by law.
Submission application deadline
By not later than 15th May 2020.
4. Micro Invest Scheme
Malta Enterprise is extending the deadline to submit Micro Invest applications in respect of calendar year 2019, from 24th March to 30th April.
5. Banking facilities (made available by Banks in Malta)
The major banks in Malta have announced a series of aid incentives to help businesses and personal clients who may be affected by the economic downturn brought about by COVID-19.
Incentives vary and range from temporary freezes on capital and interest of loans to increased overdraft facilities, fee waivers and extensions on draw-downs and credit facilities.
On the 14th May 2020, the Ministry for the Economy, Investments and Small Businesses launched the Industrial Rent Subsidy 2020 Scheme. Learn More
Should you require any further information or require our assistance with the grant application process, please contact us today.