Malta Budget Measures for 2021

A model for economic regeneration On Monday 19th October 2020, Malta’s Finance Minister, Profs. Edward Scicluna presented the country’s budget for year 2021. The global economic scene is of course entirely different to that seen a year ago, as since then the COVID-19 global pandemic brought the world to a standstill. The Budget provides a number of incentives for the year ahead that promise to drive forward Malta’s economy to regenerate in the post COVID-19 reality. As expected, the economic slowdown impaired the Maltese economy, with a reduction of 7.4% in GDP expected for this year. However, Malta is expected to bounce back next year, with a growth forecast of between 5% and 6.4% in nominal terms. In line with our position as corporate and tax advisers, this article highlights only the measures that we believe are more likely to be of interest to our international audience of those currently or considering investing in or relocating personally to Malta. COVID-19 Emergency measures The government has already made available support such as wage supplements to the industries most directly impacted by the pandemic, notably hospitality and catering. Vouchers were also distributed to households in Malta to kickstart the economy once partial … Read more

Malta ready for Brexit

Preparations for introduction of customs duties on UK imports With the effective date of the United Kingdom’s exit from the EU fast approaching, no deal has yet been reached between the EU and the UK. If this situation remains unchanged, current Malta customs procedures related to non-EU countries will be extended to the United Kingdom as from the new year, Malta’s Customs Department recently announced. The department has issued guidelines on its modus operandi for the various trade sectors. It said that all imports from and exports to the United Kingdom will need to be covered by a Customs declaration, on which all the applicable duties and other taxes such as VAT and excise will have to be paid prior to the release of goods for free circulation within the EU. Imports and exports of parcels by post and by fast parcel operators are also caught within the scope of this treatment. Imports of Raw Materials for Processing Maltese business that sources raw material from the UK for further processing and eventual export may benefit from relief from import duties subject to meeting the qualifying conditions. The Customs Department has advised that it will adopt a risk-based approach over consignments … Read more

INTERSERV Director Dr Priscilla Mifsud-Parker elected…

INTERSERV  Director Dr Priscilla Mifsud-Parker has been elected Chair of the Malta branch of private client professional organisation STEP, the Society of Trust & Estate Practitioners.  Priscilla, has accepted a three-year term as the head of STEP in Malta after serving in the STEP Malta Branch Committee for many years in the capacity of Secretary and Chair of the Technical Committee.  Priscilla is a Maltese Advocate and a senior partner in leading Maltese law firm Chetcuti Cauchi Advocates.  At INTERSERV she heads the Corporate Services, Estates and Trusts Practice Groups.  She has more than 15 years’ experience as a corporate, tax and immigration lawyer specialising in private client advisory and structuring work.  Priscilla is a Maltese advocate and tax advisor, and a licensed immigration lawyer. “Today more than ever before, STEP Malta’s role is crucial in supporting its members in transitioning to a new world order for Maltese trust and estate practitioners. look forward to taking up the position and getting to work with my fellow committee members and STEP colleagues.” INTERSERV and STEP INTERSERV runs one of the leading tax, trust and corporate services practices on the Island.  The firm has a longstanding relationship with STEP since 2004 with INTERSERV ‘s private client … Read more

Work Your Equity: The Malta Notional…

Dr Priscilla Mifsud Parker explores the notion of notional interest deduction and outlines the legal rules applicable for a company to be able to apply this against its income. The Notional Interest Deduction in Malta Why was the NID provision launched in Malta? The notional interest deduction was introduced in Malta as a reaction to the European Council Recommendation of 9 July 2013 on the National Reform Programme of 2013 of Malta and delivering a Council opinion on the Stability Programme of Malta, 2012-2016.  It was noted that there was a need to reduce the bias towards funding with debt versus financing.  The need to reduce the bias towards funding with debt is also a key aspect of the CCCTB (Common Consolidated Corporate Tax Base) proposal. The Government of Malta introduced a notional interest provision in the tax legislation in 2016 that allows for a deduction of sums in respect of risk capital.  This provision in Malta tax law that introduces the notional interest deduction is aimed at approximating neutrality between debt and equity financing.  In this manner, both the cost of equity and debt will be allowed as a deduction and thus the tax distortions in financing and investing … Read more

Managing Remote Workers

The worldwide response to limit the spread of the COVID-19 virus pushed people across the globe to reduce direct contact with others. Two key means of achieving this were to limit international travel and encouraging people to work from their homes, where the nature of the work permitted. In order to safeguard the wellbeing of their staff, their clients and their service providers, organisations raced to put in place new ways of working to permit such work and to mitigate any negative consequences. The effect of such a mass migration from working in the office to working from home ushers in the next industrial evolution. People have suddenly realised that many businesses already offer much of their service offering online, now that they are forced to use it they will overcome that first fear of using or doing something new. Thereafter it will be more convenient to use online portals for such tasks as renewing insurance policies, making banking and payment transactions, or ordering documents form government agencies. Once people see the benefit of ordering food online and having it delivered, will they revert to losing so much time in supermarkets? A vast number of people around the world have … Read more

International Business Online

The realities of business change continually, usually driven by developments in the world, such as innovative technology, communication tools and other new opportunities. COVID-19 is a development in the world that is affecting business, forcing organisations around the globe to allow for working at home whilst simultaneously attempting to maintain revenue generation. In such times, the importance of e-commerce and the internet become clear.  Although these are not new realms within the digital world, it is only now amidst a global pandemic that many business owners are realising the importance of this sales channel.  It is a channel that replaces the traditional selling via a physical outlet or face-to-face meetings, and which simultaneously extends business to a global reach.  It must also be said that such a digital platform lends itself to specific types of business better, where online stores of physical products as well as the provision of services may be done remotely. Business owners who want to reach a global audience often tend to focus mainly on distribution and operational issues and may as a result fail to take into consideration less immediate issues.  These include legal obligations such as taxation, legal matters in foreign countries as well … Read more