COVID-19 Fiscal Assistance: Deferral of Payment of Certain Taxes

On the 20th March, the Maltese Government announced a tax deferral scheme to assist local businesses to improve their business liquidity and ease pressures on their cash flow arising from the economic impact of the coronavirus pandemic. Furthermore, the measures aim to encourage the retention of employees. 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 are required to complete and submit an online application form available on the Malta Enterprise website here and such application is to be made not later than the 15th April 2020. The Government is encouraging companies and self-employed persons which are not adversely hit by the coronavirus pandemic not to avail themselves of the scheme.

Tax Deferral Scheme Eligibility

The tax deferral scheme is applicable to Provisional Tax, Employee Taxes, Maternity Fund Payments and Social Security Contributions, Social Security Contributions of Self-Employed Persons and Value Added Tax. The scheme is eligible to taxes which fall due in March and April 2020. Eligible taxes (excluding VAT) are to be settled in four equal monthly installments in the four-month period between May and August 2020. VAT dues are to be settled in two equal installments with the two quarterly returns immediately following the quarter whose dues would have been deferred. It’s good to note that no interest or penalties are to be charged in respect of eligible taxes that would have been deferred in terms of the scheme.

The scheme is not available to companies and/or self-employed persons which have failed to comply with their tax obligations (including the submission of documents; returns and payments) falling due by the 31st December 2019.

In order to curb any abuse, the benefit granted under the scheme shall be forfeited if the beneficiary is found to be in breach of any of its terms and conditions making use of the scheme under false pretenses. In the event of a 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.

Finally, it is important to note that the benefit granted under the scheme shall not remove the obligation of beneficiaries to submit documents and returns by the due date as required by law.

Should you have any queries in relation to the above or require any assistance with any other tax related matter, please feel free to contact us on tax@gvzh.mt.