Further to the press release issued by the Ministry for Finance and Financial Services wherein the Minister for Finance Edward Scicluna announced, amongst other measures, the extension of the Tax Deferral Scheme, the Commissioner for Revenue and Malta Enterprise have now announced details relative to the extension of this Scheme.
The deferral measure covers the obligation on the part of enterprises, including the self-employed, to pay provisional tax, employee taxes, maternity fund payments and social security contributions, the social security contributions of self-employed persons, and VAT generally – this has now been extended to cover taxes for the periods April through to June 2020.
All tax forms should be submitted according to normal deadlines and the benefit granted under this Scheme shall not remove the obligation of beneficiaries to submit documents and returns by the due date as required by law.
Companies and self-employed persons that suffer a significant downturn in their turnover as a result of the economic constraints arising from the coronavirus pandemic and, as a result, face substantial cash flow difficulties, may apply to benefit from the Tax Deferral Scheme. Companies and self-employed persons not adversely hit are advised and encouraged not to avail themselves of this scheme. When it comes to the proving of a "significant downturn in turnover" in its specific circumstances, a drop of circa 25% or more in sales registered would appear to satisfy this condition. This would be ascertained on the basis of a 3 month period, in which March would be either the first or the second month, i.e. either from February to April or else March to May 2020, as compared with the same period in 2019. Naturally, this would in part be based on estimates but as long as such estimates are drawn up in a reasonable manner the indication is that these should suffice. Enterprises claiming this benefit should keep records of these estimates.
Specifically excluded from this Scheme are companies and self-employed persons which have failed to comply with their tax obligations (submission of documents / returns and payments) falling due by the 31st December 2019 as well as those which opted to pay VAT under the Mini One Stop Shop (MOSS), in the case of deferral of VAT payments.
The benefit granted under this Scheme shall be forfeited if the beneficiary is found to be in breach of any of its terms and conditions, thus making use of this Scheme under false pretences. In case of forfeiture, beneficiaries will have to settle their dues as demanded by the Commissioner for Revenue and such payments shall be subject to interest or penalties as stipulated by law.
This benefit is subject to application – one is to complete and submit an online application form available on the Malta Enterprise website. Such application is to be made by not later than the 15th May 2020.
How can we help?
We are monitoring developments on an ongoing basis and will provide further updates as more information becomes available. Meanwhile, should you require any assistance relative to how your business may benefit from the afore-mentioned Tax Deferral Scheme, the Teleworking Scheme, the COVID-19 Wage Supplement measure, Malta's Financial Aid package and the various Malta Enterprise support measures generally, please do not hesitate to reach out to us personally.
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.