Reduced 12% Vat Rate for Care of Human Body
The Value Added Tax Act (Amendment of Eighth Schedule) Regulations 2023 extended the scope of the reduced VAT rate of 12% to services consisting of the care of the human body with effect from 1 January 2024.
With regard to care of the human body, the guidelines explain that certain health services are exempt from VAT if they qualify as medical care. Where a service involved does not qualify as “medical care”, the 12% rate applies to services that consist of the care of the human body provided that such services are required to be delivered by a person in the exercise of any profession regulated by the Health Care Professions Act. Where Services consisting of the care of the human body do qualify for the exemption or the 12% rate, then the standard VAT rate of 18% applies.
Reduced 12%Vat Rate for Pleasure Boats
Following the Introduction of Legal Notice 231 of 2023, the Malta Tax and Customs Administration has published new VAT guidelines on pleasure boat rentals where the tax becomes chargeable in terms of the Fourth Schedule to the VAT Act on or after 1st January 2024.
With effect from 1st January 2024, the hiring of a pleasure boat to a person according to an agreement for any term, or part of a term, or that when added to the term of a previous hiring of the same goods, or other goods of the same kind, to the said person during the previous twelve (12) months ending on the date of the existing hiring does not exceed five (5) weeks, will have a special VAT rate of 12% provided that the hiring of the pleasure boat takes place in Malta. The guidelines indicate that five (5) weeks shall mean a total of 35 days.
Article 40 of Council Implementing Regulation (EU) No 282/20111 clarifies that in respect of the place of supply of a short-term hiring of a pleasure boat, the place where a pleasure boat is actually put at the disposal of the customer shall be the place where the customer or a third party acting on his behalf takes physical possession of that pleasure boat.
The Guidelines explain that if the hiring of a pleasure boat exceeds five (5) weeks, the reduced rate of 12% would only apply to the first part of that term and the default rate of 18% would be applicable to the remaining term. For example, if a company hires a pleasure boat to a person for a continuous six (6) week term, the first five (5) weeks will be subjected to 12%, whilst the last week will be subject to the default rate of 18%. Nevertheless, if a company hires out a pleasure boat to different people exceeding the period of five (5) weeks within a 12-month period, as long as the supply of each hiring would be Malta and it is hired to a different person each time, the 12% reduced rate would apply respectively to each hiring.
It is important to note that the reduced rate of 12% shall not apply to the provision for consideration of seating or space on board a pleasure boat with other passengers to whom such seating or space is separately supplied for consideration, and other such supplies.
The Guidelines also outline the interaction which exists between the 12% VAT rate and other supplies provided by the person hiring the pleasure boat. In fact, where a taxable person provides a package of supplies consisting of the provision of goods and services, which includes various elements subject to differing VAT treatment, it may constitute a single composite supply for VAT purposes. In such a case, the VAT treatment applying to such a single composite supply shall follow the VAT treatment applicable to the principal component of that supply. Therefore, where the single principal component of a single composite supply is a supply of hiring of a pleasure boat subject to the reduced rate of 12%, then the said reduced rate would apply to the whole package of supplies.
A pleasure boat may be interpreted as referring to a small ship which is defined in the Small Ships Regulations (S.L 499.52) as follows:
“Small ship means a craft under twenty-four metres in length employed solely in the navigation within the territorial waters of Malta, whether mechanically driven or not, and whether privately or commercially used; and includes, but is not limited to, all types of craft such as sailing boats, yachts, fishing vessels and other craft used for fishing like caiques, luzzijiet and frejgatini, cabin cruisers, speedboats, jet skis, dinghies, passage boats and other Maltese traditional boats, paddleboats, canoes, personal water craft, aircushioned craft etc.;”
Upon registration of a small ship with the Small Ships Registry at the Authority for Transport in Malta, operators of small ships seeking to use their small ship commercially, are then granted a Commercial Vessel Certificate provided the requirements of the Authority are adhered to. This permits the operators to hire out their pleasure boats. Therefore, is understood that these owners and operators will benefit from this new 12% VAT rate in the rental of their pleasure boats.
Eu Funded Grants – Digitalise Your Business
Scheme Objective
This incentive seeks to assist Enterprises through non-repayable Grants to part-finance investment to digitalise their operations, and hence improve their resilience, efficiency, productivity and customer experience by addressing new digital capabilities and digitalised processes such as product and process design and engineering, end-to-end procurement, supply chain/distribution and after sales.
Eligible Organisations
Enterprises
Financing
This scheme is funded through the Recovery and Resilience Plan and this particular scheme will part-finance up to 50% of the cost for investments in Malta and 60% of the cost for investments in Gozo (up to a maximum grant of €120,000 + an additional 7% flat rate).
More information can be found here: https://fondi.eu/what-funding-is-available/digitalise-your-business/
Access to Employment Grants
The A2E is a scheme co-financed by the European Social Fund (ESF), the Maltese Government and the Employers.
The applicant must meet all the eligibility criteria to benefit from this scheme. Eligible applicants cover all employers irrespective of their legal form with the exception of public entities, Government Departments and when the Government has majority (over 50%) shareholding in the applicant entity.
Employers applying for the A2E Scheme whose application is found eligible will receive a subsidy of €186 (full-time) / €93 (part-time) per week per new recruit engaged, for a period of 52 weeks or 104 weeks, depending on the target group.
In the case of registered disabled persons, a subsidy of €278 (full-time) / €139 (part-time) per week for a maximum of 156 weeks is provided.
Rates will be revised on an annual basis to include the cost of living increase.
The A2E Scheme will provide employment aid to enterprises in Malta and Gozo to promote the recruitment of the more challenged amongst job seekers, unemployed and inactive.
The Aid Programme will be:
• Enhancing opportunities to access the labour market and providing work experience to those furthest away from gainful occupation;
• Bridging the gap between labour market supply and demand;
• Increasing social cohesion.
Eligibility Criteria
| TARGET GROUPS | DURATION OF ASSISTANCE |
| 1. Any person of age 24 and over who has been unemployed/inactive for the previous 6 months. | 52 weeks |
| 2. Any unemployed person of age between 15 to 24 who previously participated and completed Jobsplus Scheme and is recruited for the first-time following completion of such initiatives. | 52 weeks |
| 3. Any person who is living as a single adult who has one or more dependants and is not in full-time employment. | 52 weeks |
| 4. Any person of age 24 and over who has not attained an upper secondary educational or vocational qualification (ISCED 3), who does not have a job. | 52 weeks |
| 5. Any person older than 50 years who does not have a job. | 52 weeks |
| 6. Any person who has been unemployed / inactive for the previous 12 months and who belongs to one of the disadvantaged target groups (3) to (5) | 104 weeks |
| 7. Any person of age 24 and over who has been unemployed / inactive for the previous 24 months. | 104 weeks |
| DISABLED PERSONS | |
| 8. Any person who is a registered disabled person under national law. | 156 weeks |
Below kindly find the links to guide you with the A2E Application form:
- Entity Documentation checklist to guide you with the documentation requested from the employer side – https://jobsplus.gov.mt/a2e/a2e-open-calls/a2e-open-calls-forms/a2e-entity
- Participant Documentation Checklist to guide you with the documentation requested from the participant (employee) side- https://jobsplus.gov.mt/a2e/a2e-open-calls/a2e-open-calls-forms/a2e-participants
A2E Application form Link – https://form.jotform.com/223353080843048
Participant Information Sheet Form (to be attached with the A2E application form) Link- https://form.jotform.com/223355995659070
Micro Invest (tax credit scheme)
Malta Enterprise Corporation (MEC) issues every year for eligible undertakings when applying for support under the MicroInvest Incentive Scheme for eligible costs incurred during the previous financial year. Deadline is 31st March (unless it falls on a weekend).
1. Who is eligible for the scheme?
This incentive is open to any micro undertaking (by definition, includes individuals and bodies of persons satisfying certain size thresholds) subject to conditions, including:
- Self-employed persons may apply under this scheme as long as their self-employment is registered with ETC;
- The single undertaking (takes into consideration certain linked/related enterprises) applying for aid should employ between one and thirty full-time employees (or equivalent) and annual turnover or balance sheet total should not exceed €10 million;
- Applicants must not be defaulting on VAT, income tax, and social security.
Certain activities are disqualified from eligibility e.g. the fishery and aquaculture sector or undertakings that are engaged in the primary production, processing and marketing of agricultural products.
2. What benefits does it offer?
This scheme entitles eligible undertakings to a tax credit amounting to 45% (or 65% for undertakings operating in Gozo) of eligible expenditure incurred up to 31 December which should be utilised against the tax incurred on income derived from the qualifying trade or business activity only.
Eligible expenditure under this scheme includes:
- Costs subcontracted to third parties relating to furbishing and upgrading of business premises; Investment in acquiring machinery, technology, apparatus or instruments which enhance operations;
- Capital investment in I.T.;
- Investment in one new motor vehicle (subject to conditions);
- Basic wages costs pertaining to new jobs created.
Certain conditions and criteria in this respect are also applicable. The maximum amount of tax credits that a single undertaking is eligible for amounts to €70,000 over any period of three consecutive years. This amount applies in the case of start-ups (as defined) established in Gozo or for female-owned businesses. The tax credit granted can be utilised within a period of three years of assessment (four years in the case of start-ups or female-owned businesses) commencing from the year of assessment in relation to which it has been awarded and any unutilised balance remaining after this period is forfeited.
We can assist you in the application process and you are welcome to contact us to discuss the matter further.
