On Friday 22nd July 2016, the Seed Investment Tax Credit Scheme was officially launched and applications will be made available on the 1st August 2016.
This scheme will grant tax credits to natural persons resident, or operating in, Malta who bear the full risk in respect of the investment made, being either Malta resident persons or EU/EEA non-resident persons, who have at least 90% of their worldwide income derived from Malta, and who invest in start-up businesses between 1st January 2016 and 31st December 2018.
In terms of the rules, a qualifying investor will benefit from a tax credit of 35% of the aggregate value of the investments made in a qualifying company, provided that the total tax credit shall not exceed €250,000 per annum, with a maximum total investment per qualifying company of €750,000.
A natural person wishing to obtain the status of a ‘qualifying investor’, in relation to an investment in a qualifying company, shall submit an application to the competent authority for a formal determination and for issue of the relative compliance certificate in terms of these rules.
A ‘qualifying investment’ means the subscription to a fresh issue of fully paid up, non-redeemable equity shares in a qualifying company by a qualifying investor.
For this purpose, a ‘qualifying company’ shall mean an SME that satisfies the following cumulative conditions:
- is incorporated in Malta or controlled and managed from Malta, or has a place of business in Malta;
- has been in existence and engaged in carrying out qualifying activities for a period not exceeding three years following its first commercial sale;
- is not listed on any recognised stock exchange;
- has a maximum of ten employees;
- has gross assets of not more than €250,000 immediately preceding the issue of equity shares to the qualifying investor; and
- has been duly issued with the relative compliance certificate by the competent entity in terms of these rules.
How can Nexia BT help?
Nexia BT can advise and assist qualifying investors in the preparation and submission of the relative applications to the competent authority for the attainment of a formal determination and a compliance certificate in terms of the rules.
A full information sheet will soon be made available once more details about the rules are issued by the competent authority.