Malta/ 5.1 General legislation
5.1.5 Tax laws
VAT in Malta is 18%. Taxation measures for the cultural sector in 2011 encompassed the following:
- payment of VAT on the renting of space for artistic and cultural activities, as well as on entrance tickets for museums, art exhibitions, concerts and theatres (with the exclusion of cinemas) is 5% (introduced in 2008);
- all training in the arts shall be exempt from VAT, as long as this will be provided by organisations which are accredited in the Register for Accreditation in the Training of the Arts (introduced in 2008);
- companies that provide financial assistance to recognised non-profit making cultural organisations and / or to the Arts Fund will be able to deduct these grants from their taxable income (introduced in 2008);
- companies that provide assistance or grant scholarships to Maltese artists will be entitled to deduct these grants from their taxable income up to a maximum of 8 000 MTL (EUR 18 600) (introduced in 2008); and
- a deduction against income to be made by a taxpayer who in a particular year of assessment makes a donation of money, or any other asset, excluding immovable property, of the value of not less than 2 329.37 EUR (1 000 MTL) to: the Superintendent of Cultural Heritage; Heritage Malta; Fondazzjoni Patrimonju Malti or NGOs under the condition that a relevant certificate is issued by the recipient and submitted together with the return for the relevant year that the donation is used for the purpose of research, conservation or restoration, education and exhibition of the heritage; and in the case of donations to non-governmental organisations registered with the Superintendent of Cultural Heritage and not related to the donor company. (introduced in 2004);
- a rebate system of 20% was introduced to boost foreign film productions. According to the scheme, a production company filming in Malta is entitled to a rebate of up to 20% of its production costs once the commitment is fully undertaken (introduced in 2004);
- fiscal benefits for qualifying costs to make it easier for eligible Maltese authors to publish their literary works (introduced in 2010);
- tax credits to cover qualifying costs spent on computer animation, special effects, films and television programmes, as well as production services (introduced in 2010); and
- fiscal benefits for qualifying costs spent on interactive digital media products and qualifying costs spent on sound recording houses, including costs incurred to bring productions to Malta (introduced in 2010)
- "Create" is a tax incentive programme for businesses in the cultural and creative industries. Further support is provided to help the development of creative communities in artistic zones thus sustaining the development of said zones and interdisciplinary creative cluster developments. Undertakings, including those who are self-employed, involved in the creative industries may benefit through this incentive which will be in the form of a tax credit. The aid will be calculated as a percentage of the eligible costs incurred by these undertakings in the development of their creative endeavours. Malta Enterprise may approve a tax credit equivalent to 60% of the eligible expenditure up to a maximum of EUR 25 000. "Create" provides additional benefits related to creative work undertaken in identified creative zones. As of 2012, the whole territory of Valletta will be included in the identified zones.
In 2011, the following measures were announced for implementation in 2012:
- Legislation on income exemption on Patents will be extended to cover works protected by copyright, including books, film scripts, music and art. This benefit will consist of a tax exemption on income from copyright.
- A tax credit scheme for Maltese companies wishing to commission educational or promotional digital games, where credit will be granted on the expenditure incurred on the development of the game or on a maximum expenditure of 15 000 EUR; and
- To attract more experts in these specialised sectors to Malta, government is extending the flat 15% income tax scheme for international professionals such as game directors and game designers. This scheme has also been extended to academics and researchers in the research and development sectors.
- An innovative scheme for self-employed persons registered as authors, composers, visual artists and performing artists, film artists and design artists will be designed to entice artists to live and work in the City of Valletta.
- For restoration and conservation works on scheduled buildings in grades 1 and 2, as well as properties in UCAs:
- exemption from Duty on Documents on transfer between heirs in order to facilitate the consolidation of the property ownership, with this concession closing on 31st December 2013;
- a scheme for private individuals who wish to restore their property where a rebate of 20% will be given on the costs of restoration up to a maximum of EUR 5 000;
- concessions to individuals or companies who invest in the restoration of these properties to sell or rent will be given as follows:
- final withholding tax of 10% on income from rent for residential purposes, and 15% on income from rent for commercial purposes; and
- final withholding tax of 10% in the case of a sale or the payment of 30% tax instead of 35% on the gain; and
- a tax credit of 20% on the expenditure that qualifies for restoration of property for the commercial purposes of the company and this will increase to 30% in the case of grade 1 and 2 scheduled properties.
Chapter published: 22-03-2012