Micro Invest, led by the Malta Enterprise, is a tax credit scheme aimed at aiding small businesses or start-ups to invest in their operations by offering them financial incentives.
The Micro Invest Scheme encourages undertakings to invest in their business as well as to innovate, grow and improve operations. This scheme enables undertakings to expand and increase their competitiveness.
For an undertaking to be eligible under the Micro Invest Scheme, they must satisfy the following requirements:
- Must be a small to medium enterprise, including start-up businesses, family businesses and self-employed;
- Must have at least 1 individual employed on a part-time or full-time basis but have not more than 50 full-time employees;
- Unless exempt, is correctly registered with the VAT Department;
- The annual balance sheet total or their turnover in the fiscal year prior to the submission of the application cannot exceed €10 million;
- Must not be involved in any activities which are prohibited by the de minimis regulation. Such activities include, but are not limited to, fisheries, agriculture, export-related activities;
The basic rate of tax credit is that of 45% of your eligible costs, however, this varies according to your location and eligible costs. Eligible undertakings which either operate from Gozo or are registered as a family business or have more than 50% of its ownership attributed to women, will receive an additional 20% incentive for a total tax credit of 65%.
The Micro Invest Scheme provides eligible undertakings with a maximum tax credit of €50,000 over a period of three consecutive fiscal years and this maximum tax credit is raised by €20,000, resulting in a total of €70,000, for those that are eligible for the extra incentive.
The eligible costs include:
- • Costs relating to increased wages of at least 3%, calculated by deducting from wage costs incurred in the relevant fiscal year, the highest annual wage cost incurred in the preceding two fiscal years
- Acquiring new (or first time used in Malta) machinery, technology, apparatus and instruments;
- Investment in systems intended to produce alternative energy or to improve energy efficiency, unless receiving other state aid support;
- Investment in tangible and intangible assets required for digitisation of business operations including computer hardware, software systems and website developments or enhancements;
- Purchase of commercial vehicles procured as new or first time registered in Malta;
- Certification costs;
- Costs incurred by unrelated parties related to the upgrading of business premises along with any extensions, modifications, furbishing or refurbishing.
Undertakings wishing to benefit from this scheme for investments carried out in 2022, must submit a Micro Invest Tax Credit Application by no later than 13th December 2023.
Further information on the said schemes may be found here.
This article is not intended to constitute legal advice and neither does it exhaust all relevant aspects of the topic.