In order to foster further partnership between Malta's
corporate and cultural sectors, the Maltese government has recently
announced a number of tax incentives through Subsidiary legislation
123.102. Such incentives shall be applicable to companies that
grant cash donations to various cultural organisations.
Through this incentive, companies that give such donations may
claim the amount donated at 150% against the income for the year of
assessment when the donation was made. The maximum tax deduction
for culture however is capped at €50,000.
In order to benefit from such an incentive, the donor must be
treated as a "company" in terms of the Income Tax Act,
Limited Liability Companies
Partnerships that are registered to be treated as a
The legislation stipulates three beneficiaries of such donations
Non-profit Cultural Organisations that are registered as a
Voluntary Organisation or a Non-Governmental Organisation
Public Cultural Organisations
Arts Council Malta- provided that the donation is granted for
the purposes of achieving the Council's strategies and
objectives or as an intermediary for a pre-approved third party
All applications for any donations given between the 1st of
January and the 31st of December 2016 must be submitted to the Arts
Council Malta together with:
A copy of an eligible Donation Agreement between the donor
company and the beneficiary organisation which includes details on
the donation amount and the activity that is being supported
Proof of Transaction documentation that is certified by either
the Bank used in such donation or a Certified Public
Approval and Submission
Once all documentation is submitted to the Council, the donor
shall receive an Incentive Certificate (IEC), which shall be
submitted to the Inland Revenue Department during the compilation
of the donor company's annual tax return.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Common Reporting Standard (CRS) has been initiated by the Organization for Economic Cooperation and Development (OECD) aiming at improving international tax compliance and preventing tax evasion, through the automatic exchange of information between the countries that implement CRS.
The DITC has stated that it will issue updated CRS Guidance Notes in the first quarter of 2017 to cover the Regulations.
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