News

COVID-19 support measures, announcements and other relevant considerations

Keep yourself up to date

A number of support measures and announcements have been introduced by the Government of Malta, the EU, and various institutions and authorities, aimed at alleviating the impact of COVID-19. This page by Deloitte Malta provides the very latest in this respect as well as additional information and relevant considerations to keep you up to date.

Last updated: 08 July 2020

Support measures
 

Employees (working in the private sector and duly registered with Jobsplus) made redundant after 8 March 2020 as a result of COVID-19 and who receive a Contributory Unemployment Benefit, may be eligible for this additional benefit as a result of which they shall be entitled to a total grant of €166.15 per week in the case of individuals previously employed on a full-time basis, and €103.85 per week in the case of individuals previously employed on a part-time basis.

In addition eligible persons shall also enjoy the following benefits:

  • The social security contribution shall be paid and future contributory pension rights safeguarded;
  • Should eligible persons be entitled to a Children’s Allowance, the rate thereof shall be adjusted taking into consideration the new income earned and this may increase up to the maximum rate of €24.08 per week per child;
  • Should eligible persons be entitled to the In Work Benefit this shall continue to be received without deductions;
  • Should eligible persons be entitled to the Supplementary Allowance the rate thereof shall be adjusted taking into consideration the new income earned and this may increase up to the maximum rate of €4.57 per week for single persons and €12.54 per week for couples.

The guidelines for this measure may be found here.

This benefit shall continue to be paid until 3 July 2020.

Details of the measure

Employees of qualifying businesses (including self-employed persons) that have been significantly impacted by COVID-19 (Annex A):

  • Full-time employees shall be entitled to a grant equivalent to the salary of five days per week, amounting to €800 per month.
  • Employers should continue paying the difference in salary up to at least a maximum of €400.
  • Part-time employees shall be entitled to a grant amounting to €500 per month.

Employees of qualifying businesses that have been impacted less by COVID-19 (Annex B):

  • Full-time employees shall be entitled to a grant equivalent to the salary of one day per week, amounting to €160 per month.
  • Part-time employees shall be entitled to a grant equivalent to the salary of one day per week, amounting to €100 per month.
  • Self-employed persons that have employees, shall be entitled to a grant equivalent to the salary of two days per week, amounting to €320 per month.

Employees of qualifying business based in Gozo that have been impacted less by COVID-19 (Annex B):

  • Full-time employees shall be entitled to a grant equivalent to the salary of two days per week, amounting to €320 per month.
  • Part-time employees shall be entitled a grant equivalent to the salary of two days per week, amounting to €200 per month.
  • Self-employed persons shall be entitled to a grant equivalent to the salary of two days per week, amounting €320 per month.
  • Self-employed persons that have employees shall be entitled to a grant equivalent to the salary of three days per week, amounting to €480 per month and the employees shall be entitled to a grant equivalent to the salary of two days per week based on a monthly salary of €800.

The above measures shall apply retrospectively from 9 March 2020 and shall also apply to employers opting to re-hire any employees made redundant during this period. The above measures were initially applicable for a period of two months (covering March and April 2020) and the Government has recently announced a renewal for a further two months (covering May and June 2020). Kindly note that there may be adjustments or renewals regarding these measures during this period.

Application process

Kindly note that the application form in order to apply for the COVID Wage Supplement is now available and also lists a number of terms and conditions, which, inter alia, include the following:

  • Employers are legally bound to forward all COVID Wage Supplements to each respective employee with immediate effect upon receipt of such funds from Malta Enterprise. Malta Enterprise reserves the right to double check with employees on the amount and time taken by the respective employer to disburse such funds to the employees.
  • Malta Enterprise reserves the right to publish names of employers receiving wage supplements, amounts disbursed and the number of employees from each category entitled to such supplements.
  • All COVID Wage Supplements are considered to be non-taxable for Malta income tax purposes.
  • The COVID Wage Supplement must be recorded separately on the employee’s pay slip and FS3 as ‘COVID Wage Supplement’.
  • National insurance contributions on COVID Wage Supplements due by the employee shall be deducted a priori by Malta Enterprise, therefore funds disbursed by Malta Enterprise to the employer shall be forwarded in full to each respective employee, as applicable. The employers are obliged to pay their share of the national insurance contributions on the COVID Wage Supplements disbursed by Malta Enterprise.
  • Employees being supported through a COVID Wage Supplement cannot be made redundant by their employer.
  • For employers having multiple PE numbers, a separate application must be submitted for each PE number, as applicable. It is recommended that employers having distinct activities under the same undertaking (PE number) shall submit a separate application. Groups of companies that have a centralised payroll should submit an application for each separate entity.
  • For any period covered by a COVID Wage Supplement on the basis of a five-day week, any assistance granted by the Government of Malta to that same individual, covering the same period, as support under another scheme related to COVID-19, will be considered as double funding and shall be subject to adjustments.
  • Employers granted a COVID wage supplement covering a partial week should guarantee an income of at least €720 net per month to supported employees, inclusive of any COVID wage supplement.
  • The employer may not claim any public funding in respect to and State Aid support on the basis of wages covered by the COVID Wage Supplement.
  • Employers shall describe the extent of the disruption suffered by their business due to COVID-19 by detailing the extent of the losses suffered and specifying disruptions in demand and/or supply chain which are a direct or indirect result of COVID-19 and which are the root cause of such business losses.

The application form and a full list of the terms and conditions may be found here.

Tax considerations

COVID Wage Supplements paid to employers will not be treated as income or grants to the employer for income tax purposes and therefore this is not taxable nor tax deductible (therefore tax neutral).

COVID Wage Supplements are replacing the normal wages of the employee and shall therefore be taxable in the hands of the employee.

Payroll considerations

  • National insurance contributions on COVID Wage Supplements due by the employee shall be deducted a priori by Malta Enterprise, therefore funds disbursed by Malta Enterprise to the employer shall be forwarded in full to each respective employee, as applicable.
  • The employers are obliged to pay their share of the national insurance contributions on the COVID Wage Supplements disbursed by Malta Enterprise (these could be deferred through the Tax Deferral Scheme).
  • The employer must record receiving the wage supplement and paying this gross amount to employee so payroll requires no changes. 

 

The COVID Wage Supplement as detailed above shall continue to be paid until 30 June 2020. For an update on the COVID Wage Supplement July – September as announced by the Government of Malta on 8 June 2020 as part of the Economic Regeneration Plan, kindly see the upcoming section entitled ‘Economic Regeneration Plan Measures’

  • All enterprise that terminate the employment contract of one of their employees shall be prohibited from offering an employment contract to third country nationals.
  • Only applications for highly-skilled third country nationals shall be considered.
  • Third country nationals whose employment has been terminated shall be
    provided assistance in order to find alternative employment.

Employers (including self-employed persons) are being called upon to provide teleworking arrangements to their employees who can carry out their work from their residence. The call shall support employers to invest in technology that enable teleworking and to partially cover the costs of teleworking solutions.

In order to be eligible to benefit from support in terms of this incentive a formal teleworking agreement must be in place which connects the employee to the workplace (via a VPN or similar solution).

The total support under this call shall be capped at €2,000,000 and shall be limited up to €500 per teleworking agreement and €4,000 per undertaking.
Support shall be awarded in the form of a cash grant which shall be awarded against 45% of eligible costs incurred after the 15 February 2020. The following costs are eligible for this cash rebate:

  1. Purchasing and/or leasing of computer hardware (including operating systems) which are considered portable including installation and setting up of connectivity software;
  2. Communication solutions (hardware and software) that allows different users to connect to their place of work (VPN, Point-to-point connection, etc.).

This call closed on 8 May 2020.

The application form and guidelines for this measure may be found here.

General measure

Liquidity injection into businesses of €900 million in bank guarantees for companies requesting operational loans with low interest rates and longer repayment periods.

Granting of a moratorium period

Credit and financial institutions have been instructed to grant a six-month moratorium on capital and interest to borrowers that have been materially affected by the COVID-19 outbreak following the issue of Legal Notice no. 142 of 2020.

The scope of the moratorium period is to reduce the burden of financial obligation in the event that one’s income has been negatively impacted by the virus. Furthermore, the moratorium does not cancel obligations, but rather postpones them to a later date. Repayment schedules will therefore be extended by the duration of the moratorium period.

The following eligibility criteria apply:
  • Any borrower except for credit or financial institutions.
  • Applicable on loan facilities approved prior to 1 March 2020 (excluding credit cards).
  • All terms and conditions agreed upon with the credit or financial institution has been met and facility was not in arrears prior to 1 March 2020.
  • Borrower must demonstrate that their income has been (or will be) materially impacted by the COVID-19 outbreak and therefore their ability to fully honour debt obligations has been compromised.
Further information
  • Eligible persons have the option to avail themselves of this moratorium by contacting their respective credit institution. Applications are voluntary and not automatic.
  • Applications are to be submitted at any time until 30 June 2020.
  • All applications will be reviewed on a case-by-case basis by the respective credit and financial institution, and may be refused if the eligibility criteria set out above is not met.
  • Credit and financial institutions have ten working days to make a decision on the application. The moratorium will become effective from the date the application is approved.
  • No penalties or administrative fees shall apply on applicants.
  • The duration of the moratorium shall be for a period of six months.
  • Applicants may either apply for a full deferral of both capital and interest repayments throughout the duration of the moratorium, or for reduced monthly payments but still pay interest.
  • The moratorium will not affect other conditions of the credit facility, in particular, the interest rate.
  • This does not preclude borrowers from re-negotiating the conditions of moratoria approved prior to 1 March 2020.

In line with European Banking Authority guidance, the application of this moratorium in itself should not lead to reclassification of the exposure as forborne unless an exposure has already been classified as forborne as at 29 February 2020.

Further information is available on the Central Bank of Malta’s website.

Maltese COVID-19 guarantee scheme for working capital loans granted by commercial banks to support companies affected by the coronavirus outbreak

The Malta Development Bank is providing €350m in government guarantees to local banks to support €777.8m in new loans to businesses to support their working capital needs. SMEs will be eligible to a maximum loan of €2m while large enterprises will be eligible to €5m. Any higher amounts require the prior approval of the MDB.

Eligible costs under this working capital facility may include but are not limited to:

  • Salaries of employees, including social and health security payments
  • Lease of establishment, including rental costs, energy and water bills, fuel etc.
  • Unpaid invoices due to a decrease in business revenues in respect of working capital and other similar commitments and in respect of investment expenditures provided that investment expenditures only qualify under the Scheme if they were contracted for prior to the approval of this Scheme by the Commission
  • Acquisition of material and stock for continuation of business
  • Expenses directly related to contracts which were cancelled or postponed because of the COVID-19 outbreak excluding penalties and other liabilities incurred due to non-performance of contracts
  • Maintenance costs

Business undertakings wishing to avail themselves of the facilities covered by the MDB’s CGS should contact any one of the accredited banks listed below to enquire on their eligibility and other information on the CGS.

For more information please refer to this page.

EC and EIF unlock working capital financing for SMEs affected by COVID-19

Following the European Commission’s commitment of 13 March to bring immediate relief to small and medium-sized businesses (‘SMEs’) affected by the COVID-19 crisis, €1 billion has been unlocked from the European Fund for Strategic Investments (the ‘EFSI’) as a guarantee to the European Investment Fund (the ‘EIF’) with the aim to incentivise banks and other financial intermediaries to provide working capital financing to SMEs and mid-cap companies.

This COVID-19 support measure is expected to allow the EIF to provide guarantees worth total €2.2 billion to financial intermediaries, resulting in estimated additional financing of €8 billion being made available to at least 100,000 European SMEs and mid-cap companies.

The measure represents an enhancement to the following guarantee schemes in place under two existing EU programmes, the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (‘COSME’) and Horizon 2020:

(i) The COSME Loan Guarantee Facility; and
(ii) The InnovFin SME Guarantee (‘SMEG’) Facility.

The new guarantees shall be open to existing financial intermediaries already working with the EIF (i.e. those already benefiting from guarantees under the COSME Loan Guarantee Facility or the InnovFin SMEG Facility) and to new applicants.

For more information please click here.

Vulnerable persons employed in the private sector who, after 27 March 2020, are not going to work further to an order by the Superintendent of Public Health not to leave their home, shall be eligible to receive a medical benefit provided that, such persons are not able to work from home, are not being paid by their employer during their absence from work and, have not yet reached retirement age.

Full-time employees shall be entitled to a grant of €166.15 per week and part-time employees shall be entitled to a grant of €103.85 per week.

In addition, such persons shall also enjoy the following benefits:

  • The social security contribution shall be paid and future contributory pension rights safeguarded;
  • Should such persons be entitled to a Children’s Allowance, the rate thereof shall be adjusted taking into consideration the new income earned and this may increase up to the maximum rate of €24.08 per week per child;
  • Should such persons be entitled to the In Work Benefit this shall continue to be received without deductions;
  • Should such persons be entitled to the Supplementary Allowance the rate thereof shall be adjusted taking into consideration the new income earned and this may increase up to the maximum rate of €4.57 per week for single persons and €12.54 per week for couples.

This benefit applies to persons ordered by the Superintendent of Public Health not to leave home due to the following conditions:

  • Persons who are suffering from diabetes and are dependent on insulin;
  • Persons on biological medicines.
  • Persons who have had cancer in the previous six months;
  • Persons who are immuno-suppressed;
  • Persons who are undergoing renal dialysis;
  • Persons who are pregnant;
  • Persons who were admitted to hospital for some respiratory disease over the previous six months;
  • Persons who had a heart condition in the previous six months;
  • Persons who are attending the heart failure clinic; and/or
  • Persons who are on oral steroids.

The online application for this benefit may be found here.

This benefit has stopped being paid on 5 June 2020.

Parents (including single parent families) with children under 16 years of age (both working in the private sector) where both parents work and are unable to work remotely after 8 March 2020, and therefore one parent is required to stay at home to care for the children, shall be entitled to a grant of €166.15 per week applicable to full-time employees, and €103.85 per week applicable to part-time employees.

In addition eligible persons shall also enjoy the following benefits:

  • The social security contribution shall be paid and future contributory pension rights safeguarded;
  • Should eligible persons be entitled to a Children’s Allowance, the rate thereof shall be adjusted taking into consideration the new income earned and this may increase up to the maximum rate of €24.08 per week per child;
  • Should eligible persons be entitled to the In Work Benefit this shall continue to be received without deductions;
  • Should eligible persons be entitled to the Tapering of Benefits this shall continue to be received without deductions.

This benefit does not apply to employees, working with private companies, and who work or provide an essential service in a Government department or entity.

The application form and guidelines for this measure may be found here.

This benefit shall continue to be paid until 3 July 2020.

Persons with disabilities (working in the private sector and duly registered with Jobsplus) who, after 8 March 2020, are unable to work from home and are unable to go to work due to health complications which may arise due to COVID-19, shall be entitled to a grant of €166.15 per week applicable to full-time employees, and €103.85 per week applicable to part-time employees.

In addition eligible persons shall also enjoy the following benefits:

  • The social security contribution shall be paid and future contributory pension rights safeguarded;
  • Should eligible persons be entitled to any of the Disability Assistances this shall continue to be received without deductions.

The application form and guidelines for this measure may be found here.

This benefit has stopped being paid on 5 June 2020.

Employers who have or had a member of their staff (including themselves) on mandatory quarantine leave shall also be entitled to receive a one-off lump sum grant of €350.

This grant also extends to members of staff that had to undergo quarantine in view of possible contact with individuals who were directly at risk of infection.

This measure applies with respect to full-time employees only.

This measure is not applicable to vulnerable persons employed in the private sector who, after 27 March 2020, are not going to work further to an order by the Superintendent of Public Health not to leave their home, provided that, such persons are not able to work from home and are not being paid by their employer during their absence from work. 

The application form may be found here.

Rent subsidies shall be granted by the Government to qualifying persons whose employment has been terminated.

Furthermore, rent subsidies granted by the Government shall increase for those families who already live in accommodation which is subsidised and where one family member has had their employment terminated.

A deferral from the payment of eligible taxes which fall due in March up to and including June 2020 shall be granted to companies and self-employed persons who suffer a significant downturn in their turnover as a result of COVID-19 and, as a result face substantial cash flow difficulties. Significant downturn in turnover is defined as a drop of approximately 25% or more in sales registered would satisfy the condition. This would be ascertained on the basis of projections for a three month period in which March would be either the first or the second month (compared to prior year). Companies and self-employed persons that failed to comply with their tax obligations falling due by 31 December 2019 and who opted to pay VAT under the Mini One Stop Shop (MOSS) are not eligible to benefit from the application of this Scheme.

This scheme shall apply with respect to provisional tax, employee taxes, maternity fund payments and social security contributions, social security contributions of self-employed persons and value added tax. Social security contributions due on the wages of employees should still be collected by employers however these dues shall be kept for the duration of the deferral.

Eligible taxes shall be settled by 31 October 2020.

In order to benefit from the application of this measure, interested eligible parties were required to complete and submit an online application form by 15 May 2020. Applicants who have already applied to benefit from the Tax Deferral Scheme prior to the announcement of the extension, shall automatically benefit from the extension detailed herein.

The guidelines for this measure may be found here.

Kindly note that an update regarding the tax deferral scheme is expected to be issued in light of the Economic Regeneration Plan announced by the Government of Malta on 8 June 2020. This section will be further updated following the publication of guidance by the Commissioner for Revenue.

Industry specific announcements
 

For updates issued by the MFSA’s Banking Supervision Unit, kindly refer to the dedicated section below ‘Malta Financial Services Authority'.

European Banking Authority

Date: 8 June 2020

EBA releases bank-by-bank data at the start of the COVID-19 crisis

The European Banking Authority (EBA) published today the seventh EU-wide transparency exercise. This additional data disclosure comes as a response to the outbreak of COVID-19 and provides market participants with bank-level data as of 31 December 2019, prior to the start of the crisis. The data confirms the EU banking sector entered the crisis with solid capital positions and improved asset quality, but also shows the significant dispersion across banks. Learn more.

Date: 25 May 2020

EBA published a preliminary assessment on how COVID-19 is placing unprecedented challenges to the Banks.

The European Banking Authority (EBA) published today a preliminary assessment of the impact of COVID-19 on the EU banking sector. With the global economy facing unprecedented challenges, banks entered the health crisis with strong capital and liquidity buffers and managed the pressure on operational capacities activating their contingency plans. The crisis is expected to affect asset quality and, thus, profitability of banks going forward. Nonetheless, the capital accumulated by banks during the past years along with the capital relief provided by regulators amounts on average to 5p.p. above their overall capital requirements (OCR). This capital buffer should allow banks to withstand the potential credit risk losses derived from a sensitivity analysis based on the 2018 stress test.

More information can be found here.  

Central Bank of Malta

Date: 01 July 2020

Extension to the Application Deadline and Duration of the Moratorium – COVID-19

As per Directive No.18 ‘On Moratoria in Exceptional Circumstances’ (issued on 13th April 2020) the Central Bank of Malta has allowed credit and financial institutions licensed by the MFSA to grant loan moratoria to their clients until 30th June 2020 in view of the current COVID-19 situation. This date has now been extended till 30th September 2020. Learn more...

Date: 01 June 2020

Central Bank of Malta issues a Notice to amend Directive 16 on Borrower-Based Measures, related to COVID-19

Directive 16 specifies that those who wanted to buy a second property (Category II buyers) with financing from credit institutions would have to make a minimum 15% down payment until 30 June 2020. The amount was due to increase to 25% as from 1 July 2020 – but this is now being postponed by a year to 1 July 2021. The buyers in the category affected by this extension are mainly those who are not first-time buyers, and those who already have a primary residence. (Please refer to Directive 16 for full details.)The Bank has also temporarily eased restrictions on the maximum extent of the permitted repayment burden by borrowers set at 40% in the Directive. This limit is being relaxed for a period of six months, provided that the borrower can demonstrate that the exceeding of this limit is temporary. This concession is totally at the discretion of the lender.

European Central Bank

Date: 15 April 2020

ECB communication to reporting agents on the collection of statistical information in the context of COVID-19

ECB issued communication to reporting agents stressing the need for high-quality and timely data provided in such crisis time, as it is imperative for the ECB’s exploration of options and contingencies to support the economy through this shock. To view the ECB document, please click here.

Malta Gaming Authority

Date: 24 April 2020

Deferral of compliance contribution and gaming taxes

Online gaming operators have been facing a number of challenges due to the current international climate in connection with the COVID-19 pandemic. In particular, the suspension, or cancellation, of several sporting events and other competitions, has impacted, and will continue to impact the revenue streams of licensees offering event betting on the outcome of such events.

The Malta Gaming Authority (‘MGA’) has been closely monitoring the situation and industry developments and has acknowledged the difficulties operators are facing. In line with the broader measures and tax deferrals which the Government of Malta has already announced, the MGA has announced the following measures:

  • The deferral of the payment of compliance contributions and gaming taxes owed to the MGA for revenue generated from activities classified as Type 21 in terms of the Gaming Licence Fees Regulations (S.L. 583.03) for the months of March, April and May 2020. Any such dues are to be deferred by three months.
  • For licensees that solely and exclusively offer Type 2 gaming services and for whom the payment of the fixed annual licence fee falls due in March, April or May, the payment of such licence fee shall also be deferred by three months.

The MGA have also highlighted that where activity generated from a gaming business has ceased entirely or dwindled to amounts that do not justify the continue operation of such operation, licensees may, in terms of the Gaming Authorisations Regulations (S.L. 583.05), voluntarily suspend their authorisation to operate that business operation due to the extenuating circumstances brought about by the current pandemic and can be reactivated again when the suspension of major sports leagues and events is lifted.

In addition, it was emphasised that licensees facing difficulties due to a sudden, acute liquidity shortage may wish to explore the possibility of accessing financing for their working capital requirements from their banks in line with the guarantees provided by the Malta Development Bank’s COVID-19 Guarantee Scheme.

1. Games of chance played against the house, the outcome of which is not generated randomly, but is determined by the result of an event or competition extraneous to a game of chance, and whereby the operator manages his or her own risk by managing the odds offered to the player.

Date: 6 April 2020

Notice on COVID-19 and Sports Integrity

The COVID-19 pandemic has had a disruptive impact on sporting events worldwide and as a result the online betting industry is facing unprecedented challenges. This has led to betting operators to look into alternative offerings, including betting on events with different risk profiles to those traditionally offered, including sporting events which are not run to the same professional degree as the more traditional sporting events on which betting is normally offered.

E-sports is one such betting market which is expected to experience a significant boost during these times, with event traditional sports and their respective governing bodies having resorted to e-sports. Similarly, e-sports has varying levels of professionalism and whilst many e-sports events are organised in a highly professional manner, others may not, with such distinction not always easy to make.

In order to safeguard the integrity of such events, and warn betting operators of the risks involved, the Malta Gaming Authority is therefore recommending the following:

  • Operators should consider that all e-sports events are now being run online, and therefore lacking the standard integrity checks done at events.
  • Operators should ensure that matches are not pre-recorded, and risk teams should be aware that e-sports matches are not always broadcast in real time, and there is often a pre-set delay between the actual match, and the public broadcast.
  • Operators should make sure that customers understand the distinction between e-sports, and virtual sports, whereby the outcome of the latter is determined by a random number generator.
  • Operators should look into whether tournaments benefit from integrity controls, and whether participants are professional, or otherwise, when deciding on which betting markets to offer.
  • Operators should seek information about the participants/officials involved in the e-sports events from communicative tournament organisers or from publicly available information.
  • Operators should maintain their betting integrity and fraud checks including making sure that participants/officials involved in e-sports events are not placing bets.
  • Tournament organisers, broadcasters and sports governing bodies (SGBs) should revise any policies regarding misuse of inside information so as to include also any participants or officials involved in their e-sports events.
  • Any suspicious betting activity should be reported to the gambling regulator.
  • Any other suspicious activity (not betting related) pertinent to an e-sports event should be reported to the corresponding SGB, and/or event organiser.

Date: 26 March 2020

Notice on socially responsible commercial communications with respect to COVID-19

The Malta Gaming Authority has, in response to the outbreak of COVID-19 issued a notice to its licensees on socially responsible commercial communications to players.

The Malta Gaming Authority highlighted that the current situation may be particularly distressing to players and has taken this opportunity to remind its licensees that, in accordance with the Gaming Commercial Communications Regulations (Subsidiary Legislation 583.09), to which all licensees are subject, all commercial communications to players must be socially responsible. In this regard, any direct or indirect reference to COVID-19, or any related circumstance, would be considered to amount to a breach of the said Regulations.

Furthermore, it was also emphasised that commercial communications to players should, at no point:

  • Encourage antisocial behaviour;
  • Suggest that gaming can be a resolution to social, educational, personal or professional problems;
  • Suggest that gaming can be an alternative to employment;
  • A solution to financial concerns or a form of financial investment;
  • Portray gaming as socially attractive; or
  • Suggest that solitary gaming is preferable to social gaming.

 

Date: 25 March 2020

Extension of deadline for the submission of audited financial statements

The Malta Gaming Authority has announced that the deadline for the submission of audited financial statements envisaged in article 41 of the Gaming Authorisations and Compliance Directive for licensees whose last concluded financial year ended, or ends, between December 2019 and March 2020, shall be extended to the end of October 2020. The Authority has also announced that, by not later than 180 days after the end of their financial year, licensees are obliged to submit unaudited accounts in order for the Authority to retain continuous visibility over their financial standing.

European Gaming and Betting Association

Date: 1 April 2020

European Gambling Associations Issue Guidance On Safer Online Gambling And Responsible Advertising

The European Gambling Associations have issued guidance on safer online gambling and responsible advertising during this particularly concerning time for players.

Online gambling companies should act socially responsible and ensure that those European citizens who choose to gamble online can continue to do so in a safe and secure environment.

In light of this, the European Gambling Associations strongly oppose any sort of reference to COVID-19 in some recent advertising and urge all online gambling companies to ensure that their advertising and websites:

  • Do not refer to COVID-19, World Health Organisation COVID-19 related statements and/or any other COVID-19 developments;
  • Do not portray gambling as a solution to social, personal or financial problems or invite customers to gamble online as a solution to boredom;
  • Contain signposted information about minimum age restriction, national problem gambling helplines and national self-exclusion registers;
  • Customers are closely monitored for problematic gambling behaviour, in compliance with GDPR provisions, and step up interventions when appropriate;
  • Websites contain robust and rigorously enforced KYC measures to verify the identity of new customers and prevent minors from gambling;
  • Websites contain responsible gambling tools – such as deposit limits and self-exclusion tools – which are actively promoted and visible.

Malta Shipping Directorate

Date: 17 March 2020

Extraordinary measures resulting for the COVID-19 pandemic

In light of a large number of ships registered under the Merchant Shipping Act which have been facing certain challenges emerging from mandatory quarantine and also from precautionary measures being taken by a number of port authorities around the world, the Merchant Shipping Directorate (the ‘Directorate’) has taken the following actions:

Extension of Sea Service Beyond the Seafarer Employment Agreement Period

Shipowners, managers and operators encountering difficulties in repatriating seafarers following the expiration of the term established in the seafarer’s employment agreement in terms of the Merchant Shipping (Maritime Labour Convention) Rules, may, on a case-by-case basis, request to extend the validity of the agreement for a maximum period of three months, which period may be extended for further periods upon application, should the situation remain the same. Arrangements for repatriation should be made at the earliest opportunity.

Any extended period would require an addendum to the seafarer employment agreement under the same terms and conditions as the underlying agreement.

Extension of the Validity of Seafarer Certificates Beyond their Expiry Date

Seafarers in possession of a Certificate of Competency issued by an administration other than Malta and who are in possession of a Flag State Endorsement issued under the Merchant Shipping Act and in terms of the STCW Convention, which may expire during an extended period on board, may extend the validity of their Flag State Endorsement by submitting a request to the Directorate’s dedicated email address applica.stcw@transport.gov.mt.

The request shall include the details of the seafarer, the endorsement number and a copy of a valid (or extension of validity) Certificate of Competency by the issuing administration of the said Certificate. The Flag State Endorsement may only be extended up to the date of the extended validity of the Certificate of Competency.

Extension of Statutory Certificates, Surveys, Audits and Inspections

The Directorate will consider requests for extension/ postponement under force majeure or unforeseen exceptional circumstances, on a case by case basis, in cases where surveyors, auditors and/or inspectors are not able to undertake scheduled surveys, audit and inspections due to restrictions imposed by COVID-19.

Date: 3 March 2020

Supporting measures to the Maltese shipping industry during the COVID-19 pandemic

Further to the measures announced by the Directorate (see below), additional measures have been announced with effect from 1 April 2020.

The Directorate is fully aware that the shipping industry has been severely impacted by COVID-19 and has therefore announced that the payment date of registration fees and annual tonnage tax of merchant ships which fall due on or after 1 April 2020 shall be deferred by a period of three months from the due date.

To this effect, requests to issue renewal Certificates of Registry shall be accompanied by a request for the deferral of payment of the relevant registration fees and annual tonnage tax.

All requests are to be sent to: shipreg.tm@transport.gov.mt
 

EU specific announcements
 

Date: 28 May 2020

EC further extends Temporary Framework to support the economy in the current COVID-19 outbreak through recapitalisation and subordinated debt measures

On 8 May 2020, the European Commission adopted an additional amendment (the ‘Amendment’) to extend the scope of the State Aid Temporary Framework adopted on 19 March 2020 to enable Member States to support the economy in the context of the coronavirus outbreak. This follows the first amendment adopted on 3 April 2020.

The Amendment complements the State aid measures already authorised in terms of the Temporary Framework by establishing criteria through which Member States can provide recapitalisations and subordinated debt to companies in need, whilst ensuring fair competition within the internal market. Member States have been entrusted with the flexibility to draw out national measures in conformity with additional policy objectives, such as the green and digital transformation of their economy and combatting fraud, tax evasion or aggressive tax avoidance.

Recapitalisation aid to companies

The COVID-19 crisis has resulted in a number of non-financial companies being adversely affected due to various obstructions in supply chains, which have in turn resulted in losses which decreased such businesses’ equity and their overall ability to borrow on the markets. The Amendment seeks to expand the Temporary Framework to enable well-targeted public interventions to reduce the risks to the EU as a whole, subject to a number of conditions.

Primarily, recapitalisation aid should be necessary, appropriate, in the common interest and limited to enable the viability of the company. In return, the Member State should be sufficiently remunerated for the risks assumed through the recapitalisation aid. The Member State’s involvement also signals an effective ban on dividends and share buybacks until the exit of the Member State and limitations on the remuneration of management until 75% of the recapitalisation is redeemed.

The scope of recapitalisation aid is of a temporary nature and beneficiaries and Member States should work on developing an exit strategy. Where the exit of the Member State is in doubt following 6 years (or 7 years for non-publicly listed companies) after recapitalisation aid, the Commission should be notified with a restructuring plan for the beneficiary.

In an effort to make sure that beneficiaries do not unduly benefit from recapitalisation aid, beneficiaries are not allowed to use the aid to support economic activities of integrated companies that were in economic difficulties prior to 31 December 2019. Companies that were already in difficulty on 31 December 2019 are ineligible for aid under the Temporary Framework.

Aid to companies in the form of subordinated debt

The Amendment also introduces the possibility for Member States to support undertakings facing financial difficulties due to the COVID-19 outbreak by providing subordinated debt to companies at favourable terms. This relates to debt instruments that are subordinated to ordinary senior creditors in the case of insolvency proceedings. Subordinated debt cannot be converted into equity whilst the company is a going concern. Since such debt increases the ability of companies to take on senior debt in a manner similar to capital support, aid in the form of subordinated debt includes higher remuneration and a further limitation as to the amount compared to senior debt under the Temporary Framework.

The full text of the Amendment can be found here.

Date: 13 May 2020

EC proposes temporary postponement of taxation rules due to COVID-19

On 8 May 2020, the European Commission proposed the postponement of two EU taxation measures due to the Coronavirus pandemic in order to alleviate the difficulties faced by businesses and Member States due to the crisis.

i. VAT e-commerce rules entry into force

The Commission has proposed a six month delay with respect to the entry into force of the VAT e-commerce package. Therefore, if the Commission’s proposal is adopted, the rules introduced by the VAT e-commerce package will be applicable as of 1 July 2021, instead of 1 January 2021 as originally stipulated.

ii. Directive on Administrative Cooperation (DAC) deadlines

The Commission has proposed the following changes to certain deadlines regarding the filing and exchanging of information i.e. reporting obligations, under the Directive on Administrative Cooperation (DAC):

  1. To defer the time limit for exchanges of information on reportable financial accounts in terms of the Common reporting Standard (DAC 2) by 3 months, i.e. until 31 December 2020;
  2. To change the date for the first exchange of information on reportable cross-border arrangements (DAC 6) from 31 October 2020 to 31 January 2021;
  3. To change the date for the beginning of the period of 30 days for reporting ‘new’ reportable cross-border arrangements in terms of DAC 6 from 1 July 2020 to 1 October 2020; and
  4. To change the date for the reporting of the ‘historical’ reportable cross-border arrangements (i.e. arrangements that became reportable from 25 June 2018 to 30 June 2020) in terms of DAC 6 from 31 August 2020 to 30 November 2020.

Furthermore, according to ongoing development regarding the Coronavirus pandemic, the Commission has proposed the possibility of extending such deferral periods once for a maximum of three additional months.

Despite the above proposed changes, the Commission has affirmed that DAC 6 will remain applicable as of 1 July 2020.

Next steps

The Commission has reported that both the European Parliament and the Council have been informed about the proposals. The Council may, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, adopt these proposals in terms of articles 113 and 115 of the Treaty on the Functioning of the European Union respectively.

The full text of the proposals may be found via this link.

Date: 8 May 2020

EC approves €215 million Maltese employment aid scheme to support sectors affected by COVID-19 outbreak

The European Commission has recently approved a €215 million Maltese wage subsidies scheme to support companies mostly affected by the COVID-19 outbreak and the containment measures adopted by national authorities. The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended 3 April 2020.

The scheme aims to preserve employment and avoid lay-offs of employees at a time when many business activities are either suspended or significantly reduced. The aid under this scheme is in the form of direct grants and is intended to be accessible to companies of all sizes and also self-employed individuals operating in sectors that are strongly affected by the current health crisis and the containment measures adopted by national authorities.

The Commission established that this scheme complies with the conditions in the Temporary Framework. In particular:

(i) the measure partly finances the wages costs of employees who would have otherwise been laid off due to the pandemic;
ere(ii) the aid is capped at €800 per full time employee per month, and is thereby deemed to be proportionate; and
(iii) the scheme has a 12-month time restriction.

The Commission concluded that the scheme is necessary, appropriate and proportionate to ease the harsh economic realities faced by the Maltese state, in line with article 107(3)(b) TFEU.

The full text of the press release of the European Commission may be accessed here.

Date: 23 April 2020

EC approves €5.3 million Malta scheme to support R&D related to COVID-19

Following Malta’s notification to the European Commission under the current Temporary Framework to enable Member States to support their economy during the COVID-19 outbreak as extended on 3 April, the European Commission recently approved a €5.3 million direct grants scheme to support the development of innovative solutions to the current health crisis.

These solutions include, amongst others, relevant medicinal products and treatments, medical devices, hospital and medical equipment, disinfectants, data collection and processing tools, and applications supporting a better dissemination of recommendations by health authorities.

The scheme shall be accessible to companies of all sizes, including public entities that have establishment in Malta and intend to carry out the foregoing projects and other relevant R&D projects. The aid intensity of the scheme varies between 80% and 100% of the costs incurred by the beneficiary, depending on the activity performed and the presence of cross-border collaborations.

The European Commission determined that Malta’s scheme is necessary, appropriate and proportionate to fight the COVID019 outbreak, in line with article 107(3)(c) of the Treaty on the Functioning of the European Union and the current Temporary Framework for EU State Aid rules.

The full text of the press release of the European Commission may be accessed here.

Date: 3 April 2020

EC extends Temporary Framework

On 3 April 2020, the European Commission adopted an amendment to the Temporary Framework (see next item below or here) to enable Member States to accelerate the research, testing and production of coronavirus relevant products, to protect jobs and to further support the economy in the context of the COVID-19 outbreak (the ‘Amendment’).

The Amendment complements the State aid measures previously defined by the European Commission as compatible with the internal market within the Temporary Framework. In particular, it provides for the following additional measures that Member States may adopt:

  1. Support for coronavirus related research and development (R&D): Member State may grant aid in the form of direct grants, repayable advances or tax advantages for coronavirus and other relevant antiviral R&D.
  2. Support for the construction and upscaling of testing facilities: Member States may grant aid in the form of direct grants, tax advantages, repayable advances and no-loss guarantees to support investments enabling the construction or upscaling of infrastructures needed to develop and test products useful to tackle the coronavirus outbreak, up to first industrial deployment. These include medicinal products (including vaccines) and treatments; medical devices and equipment (including ventilators and protective clothing, as well as diagnostic tools); disinfectants; data collection and processing tools useful to fight the spread of the virus.
  3. Support for the production of products relevant to tackle the coronavirus outbreak: Member States may grant aid in the form of direct grants, tax advantages, repayable advances and no-loss guarantees to support investments enabling the rapid production of coronavirus-relevant products.
  4. Targeted support in the form of deferral of tax payments and/or suspensions of social security contributions: Member States may grant targeted deferrals of payment of taxes and of social security contributions in those sectors, regions or for types of companies that are hit the hardest by the outbreak with a view to further reduce the liquidity constraints on companies due to the COVID-19 crisis and to preserve employment.
  5. Targeted support in the form of wage subsidies for employees: Member States may contribute to the wage costs of those companies in sectors or regions that have suffered most from the coronavirus outbreak, and would otherwise have had to lay off personnel.

The Amendment shall be in place until the end of December 2020, however the European Commission shall assess, prior to the said date, whether the Amendment is to be extended further.

Member States remain obliged to notify the European Commission of qualifying measures to be introduced by Member States in relation to COVID-19.

The full text of the Amendment may be found here.

Date: 19 March 2020

EC adopts Temporary Framework

On 19 March 2020, the European Commission adopted a Temporary Framework
to enable EU Member States to adopt financial aid measures to support their economies in the context of the COVID-19 outbreak (the ‘Temporary Framework’), without these measures constituting prohibited state aid. The Temporary Framework is based on article 107(3)(b) of the Treaty on the Functioning of the European Union that permits aid to remedy a serious disturbance in the economy of a Member State to be considered as compatible with the internal market.  

The Temporary Framework provides for five types of measure that Member States may adopt:

  1. Direct grants, selective tax advantages, and advance payments: Member States may establish schemes to grant companies up to EUR 800,000 to address urgent liquidity needs, through direct subsidies, selective tax breaks, or advance payments. The scheme does not apply to firms that already were in difficulties on 31 December 2019. Separate or additional rules apply to agricultural and fishing businesses.
  2. State guarantees for loans taken by companies from banks: Member States may provide state guarantees to ensure that banks may continue to provide loans to customers who need them. These state guarantees may cover loans to help businesses cover immediate working capital and investment needs.
  3. Subsidised public loans to companies: Member States may grant loans at favourable interest rates direct to businesses. These loans may help enterprises by providing direct working capital and meeting their investment needs.
  4. Safeguards for banks that channel state aid to the real economy: some Member States plan to build on the existing lending capacity of banks, and use them as a channel for support to businesses, in particular small and medium-sized enterprises. The Temporary Framework makes clear that such aid is considered as direct aid to the banks' customers, and not to the banks themselves.
  5. Short-term export credit insurance: the Temporary Framework is flexible with regard to export credit insurance.

The Temporary Framework was announced to be in place until the end of December 2020, however the European Commission committed to assess before that date whether it needs to be extended further.

Member states remain obliged to notify qualifying measures to the European Commission.  

Date: 25 June 2020

Council of the EU adopts amendment to postpone DAC6 reporting deadlines

On 24 June 2020, the Council of the EU adopted an amendment to Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU with respect to the mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (‘DAC6’) with a view to defer certain time limits for the filing and exchange of information in the field of taxation due to the COVID-19 pandemic (the ‘Amendment’).

The Amendment grants Member States the option to defer the deadlines for the filing and exchange of information stipulated in DAC6 by a period of up to six months.

The Amendment provides that, where a Member State decides to take the option to defer the applicable time limits the following shall be applicable:

  • Information on reportable cross-border arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 shall be filed by intermediaries and relevant taxpayers by 28 February 2021 (instead of 31 August 2020);
  • The first information shall then be communicated by the competent authorities by 30 April 2020 (instead of 31 October 2020); and
    The period of 30 days for filing information shall begin by 1 January 2021 where:
    a) A reportable cross-border arrangement is made available for implementation, or is ready for implementation, or where the first step in its implementation has been made between 1 July 2020 and 31 December 2020; or
    b) Intermediaries provide, directly or by means of other persons, aid, assistance or advice between 1 July 2020 and 31 December 2020.
  • In the case of marketable arrangements, the first periodic report shall be made by the intermediary by 30 April 2021.

The Council of the EU may, under strict conditions and depending on the way in which the COVID-19 pandemic continues to develop, decide to further extend the period of deferral of the time limits by three months.

DAC6 was implemented in Malta through Legal Notice 342 of 2019. Malta is yet to adopt a formal position as to whether it will be availing itself of the option to defer the applicable time limits for the reporting and exchange of information as highlighted above.

The full text of the Amendment can be found here.

Date: 28 March 2020

European Council adopts temporary scheme to help EU workers impacted by COVID-19

As a means of protecting jobs which may be adversely impacted by the economic fallout of the COVID-19 crisis, the European Council has recently adopted a temporary support scheme to mitigate unemployment risks in an emergency (‘SURE’). SURE is intended provide up to €100 billion of loans under favourable terms to Member States.

Member States are thereby able to request financial support from the EU to cushion the drastic necessary increases in national public expenditure related to work and health related schemes, such as national short-time work schemes and health measures at the workplace related to the COVID-19 crisis.

The Commission has been tasked with the raising of funds on international capital markets on behalf of the EU and SURE loans will be backed by the EU budget and guarantees provided by Member States according to their share in the EU's gross national income. The total amount of guarantees will be €25 billion. Formally, the financial assistance is to be granted by a decision adopted by the Council on a proposal from the Commission.

SURE will become available after all Member States have provided their guarantees. The instrument is expected to be operational until 31 December 2022. Should the Commission propose an extension of the applicability of SURE, the Council may allow such an extension for a 6-month period each time, depending on the ongoing repercussions of COVID-19 on the economy.

The full text of the press release of the European Council may be accessed here.

Other announcements
 

Excise Duty

Date: 21 April 2020

Deferral of excise duty payments – subsidiary legislation enacted

On 21 April 2020, Regulations introducing a two-month deferral of payments of excise duty were published in the form of Legal Notice 147 of 2020.

Pursuant to the Regulations, the payments of excise duty on all excise goods and services that are due in April and May 2020 shall be deferred by two months, as follows:

  • Payments due on 15 and 26 April will be deferred to 15 and 28 June respectively; and
  • Payments due on 15 and 31 May will be deferred to 15 and 26 July respectively.

Customs and VAT

Date: 13 April 2020

Relief for import of goods needed to combat the COVID-19 outbreak

In relation to the adoption of EU Commission Decision C (2020)2146 authorising Member States to grant relief from import duties and VAT exemption on importation for goods needed to combat the effects of the COVID-19 outbreak during 2020, Malta Customs has announced that the exemption is applicable until 31 July 2020, and could be extended should the need arise. The organisations which are eligible for such exemption include State organisations, charitable or philanthropic organisations and imports done on behalf of these organisations.

Additional information on the procedure that needs to be adhered to by the qualifying organisations in order to benefit from the import duties and import VAT exemption is available here.

Customs and Excise

Date: 30 March 2020

Mandatory electronic submission of Customs documents

Malta Customs has notified all economic operators that the following processes will be undertaken solely electronically as from 1 April 2020:

1. Uploading of all supporting documents to import and export declarations for full load and groupage consignments in the National Import and Export System (NIES).

2. When a declaration of full load container is selected for documentary check, the check is performed as soon as the Economic Operator sends an email to the Customs Office (at verification.customs@gov.mt) with the Local Reference Number (LRN). The economic operator will be contacted when original documents are required.

3. Issuing of gate passes for full load and groupage containers exiting from the Freeport Terminal. All the requisite documents in relation to the request of issuance of the gate pass, including a copy of the notice of arrival/delivery order, invoice, packing list, T2L certificates, etc must be scanned and sent via email to gatepasses.customs@gov.mt. Additional information is available here.

In addition, Malta Customs has notified that the email subject for the request of the gate pass should include the Local Reference Number (LRN), Container Number and status (T1 or C).

4. For booking of containers selected for physical inspection (import), economic operators are required to call on 25685123.

5. For the processing of transit documents (T1, T2L and T2LF), EUR1 and ATR certificates, inward and outward applications, end-use and temporary admission (TA) and other procedures related with export consignments, the relevant documents are to be sent via email to specialprocedures.customs@gov.mt. Additional information is available here.

6. For the booking of consignments selected for physical inspection (exports), economic operators are required to send an email or to call on 25685141/25685167.

In addition, Malta Customs has notified that the Customer Services Unit, the Customs Special Procedures Unit and the Customs Verification Unit have now shifted all their processes to electronic. As from 1 April 2020, these offices will attend to economic operators in person only for special circumstances and by appointment.

Date: 25 March 2020

Electronic authorisation for the release of excisable goods

Malta Customs has notified all economic operators that requests in relation to the importation of excisable goods which require authorisation prior to the issuing of the gate pass need to be submitted electronically via email as opposed to attending the office in person. Information on the specifics of the electronic submission of such requests is available here .  

The Department of Industrial and Employment Relations have issued a a document on Frequently Asked Questions addressing queries arising in relation to employment and the conditions of work as a result of COVID-19.

The FAQ document may be found here.

Date: 8 May 2020

Guidance Note – Remaining Vigilant Against a Changing Criminal Landscape

The FIAU has issued a guidance note as part of its ongoing assessment of the COVID-19 pandemic situation to advise on current and anticipated threats by address arising concerns and reminding subject persons to remain vigilant in the face of ML/FT risks.

The guidance note focuses on the effects of the COVID-19 pandemic on money laundering and terrorism financing trends across Europe. The changing reality of the pandemic and the economic turmoil continue to shape criminal activity in the short-term, mid-term and the years to come. Through this guidance note, the FIAU is encouraging subject persons to ensure that their procedures are fully aligned with the latest Prevention of Money Laundering and Funding of Terrorism Regulations and the FIAU Implementing Procedures.

The guidance note may be accessed here.

Date: 4 May 2020

REQ 2020 Extension Deadline

In response to the COVID-19 pandemic, the FIAU is informing all Subject Persons that a late submission period to complete the Risk Evaluation Questionnaire (‘REQ’) is being granted, effective from 5 until 18 May 2020 at 17.00pm. Additionally, the FIAU is also waiving the late submission fee to ease the effects of COVID-19. Subject persons failing to submit the REQ by 18 May are still obliged to complete the REQ but this shall only be submitted for information purposes. Subject persons submitting their REQ after 18 May or who otherwise fail to submit their REQ may be subject to administrative measures for failure to submit their REQ within the period stipulated in terms of Regulation 19 of the Prevention of Money Laundering and Funding of Terrorism Regulations. The FIAU encourages all Subject Persons to submit the questionnaire without unnecessary delay.

Date: 29 April 2020

Extension of deadline for the registration on the STR Submission System – goAML

In light of the current situation related to COVID-19 and its effects on the ability of subject persons to respond in a timely manner, the FIAU is extending its deadline related to the registration on the new STR submission system (goAML) to Wednesday, 13 May 2020. Subject persons who have not pre-registered on the new goAML portal are asked to do so as early as possible and subject persons who have already submitted their registration are requires to ignore this notice. Subject persons running into technical difficulties with regards to their registration are requested to contact the FIAU on goamlsupport@fiumalta.org. The new STR submission system (goAML) will not be available for the submission of STRs until the official date (22 June 2020). In the meantime, subject persons should continue using the current STR submission system.

Further information can be accessed here.

Date: 16 March 2020

Notice to Subject Persons regarding the measures taken by the FIAU in response to the COVID‐19 outbreak (including REQ‐related measures)

REQs

The FIAU appreciates that, in response to the COVID‐19 pandemic, several Subject Persons are also implementing measures, and that these may impact their capability and efficiency in responding to regulatory submissions.

In this regard, the FIAU would like to notify Subject Persons that the late submission penalty fee of EUR 100 applicable throughout the REQ submission period from 1 April 2020 to 4 May 2020 shall not be applicable. There shall also not be a ‘late submission’ period, and the only deadline for the submission of the REQ shall, for the time being and unless further extended by the FIAU which will be monitoring the situation, be set for 4 May 2020 at 17.00. Subject Persons who submit their REQ after the 4 May deadline may be subject to administrative penalties.

Should you have any queries regarding the REQs, kindly contact the FIAU by email on caspar@fiumalta.org.

Queries from Subject Persons

Should Subject Persons have any queries, including REQ‐related queries, Subject Persons are kindly requested not to contact the FIAU by telephone, but to send an email on one of the below email addresses, depending on the subject matter in question:

  • For REQ and Caspar‐related queries kindly send an email to caspar@fiumalta.org;
  • For AML/CFT technical queries kindly send an email to queries@fiumalta.org for AML/CFT technical queries;
  • For all other queries regarding the FIAU’s AML/CFT supervisory and enforcement functions kindly send an email to compliance@fiumalta.org.

Kindly include a contact number in the email being sent.

Physical meetings

To a large extent, and unless it is strictly necessary, the FIAU is not holding any physical meetings, and is either postponing them or holding such meetings through other alternative means, such as videoconference or teleconference. In this respect, we kindly ask Subject Persons to refrain from coming to the offices of the FIAU unless a meeting has been scheduled.

Additional information in this respect may be found here.

 

Date: 7 April 2020

Further changes to the services provided by Identity Malta Agency in view of the latest developments of COVID-19

In view of the ongoing developments related to COVID-19, Identity Malta Agency is taking additional measures, in order to further facilitate the services being provided.

Expatriates Unit

In addition to the measures already announced (please see below), the following are also included:

  • EU, EEA and Swiss nationals, as well as their family members, who have either been in Malta for three months and have not yet registered their residence or whose residence document has expired, should send an email to ima@gov.mt. Applicants will receive a confirmation email as proof of their registration.
  • Family members of third-country nationals and applicants for Temporary Residence Permit can submit a new or renewal application request to ima@gov.mt.
  • Interviews of couples confirming whether the foreign spouse enjoys freedom of movement rights, are temporarily being suspended.

For the time being, Identity Malta Agency is only accepting new single permit applications for highly skilled workers (Key Employee Initiative) and workers in the health sector and social care for the elderly and the disabled. New applications for highly skilled workers and medical professionals, as well as renewals and change in employment should be submitted to https://singlepermit.gov.mt/, after the employer sends a registration email to onlinesinglepermit.ima@gov.mt.

Additional information in this respect may be found here.


Date: 16 March 2020

Change in Expatriates Unit and Central Visa Unit Service Provision

Following the outbreak of the Coronavirus disease (COVID-19), Identity Malta Agency shall implement the following changes with immediate effect.

Customer Care Desk

The Expatriates’ customer care desk shall not engage in direct contact with the public and those who will still turn up in person will not be assisted. However, the Expatriates’ customer care service will not suspended and the public can forward their queries to eresidence.ima@gov.mt or call +356 2590 4800.
Applicants who are required to extend their interim permit should not call in person at the Expatriates Unit but are instructed to submit a request for an extension on eresidence.ima@gov.mt and ask for a confirmation via email.

Third-country workers: single-permit section
  • Third-country workers whose residence permit expires between 13 March and 31 March 2020 shall make the necessary arrangements with their employer to submit their application through Identity Malta’s online platform. Identity Malta will only accept the submission of an application in person in those instances where it is not possible to make use of the online application platform. Queries and guidance on how to use the New Single Permit Online Platform can be done on onlinesinglepermit.ima@gov.mt.
  • The above also applies with respect to a change of employment.
  • With respect to new applications for a residence permit (employment), third-country applicants and employers must use Identity Malta’s online application platform to submit new applications. Identity Malta will only accept the submission of an application in person only in those instances where: (i) it is not possible to use the online application platform; and (ii) the applicant did not arrive in Malta from abroad in the last 14 days preceding the date of entry in the country.
  • Third-country nationals who are physically present in Malta and had been issued with an approval in principle must submit their application for a residence permit not before 14 days from the date of entry in the country.
  • Identity Malta will not be issuing new decisions with respect to applications submitted by applicants who are not in the Maltese territory. The Agency will be informing the public when this service will resume back to normal.
Other non-EU applicants (third-country nationals applying for a residence permit or a visa for purposes other than work): non-EU section

Third-country nationals who intend to apply for a visa or residence permit for purposes other than work and enter/ed the Schengen territory between 1 March 2020 and 3 March 2020 should not visit Identity Malta’s premises before the 1 April 2020 or before 14 days from the date of entry in Malta.

Third-country nationals arriving in Malta on the 31 March should not visit Identity Malta’s premises before the 15 April 2020.

Third-country nationals who are/were authorised to stay in Malta at any point in time during March 2020 will be allowed to submit an application for a visa or residence permit after 1 April 2020.

Other third-country nationals who do not intend to apply for a visa or residence permit must leave the Maltese territory immediately upon the expiry of their authorisation to stay.

European Union citizens and their family members: EU section

EU nationals and their family members do not require to be in possession of a residence card for a period of three months from the date of entry in Malta.

Only those EU nationals and their family members who plan to reside in Malta for a period exceeding three months are expected to apply for a residence document.

Those EU nationals and their family members who enter/ed Malta from abroad between 1 March and 31 March should not visit Identity Malta’s premises before 1 April 2020 or before 14 days from the date of entry in Malta.

EU nationals and their family members arriving in Malta on the 31 March may submit their application for a residence document from the 15 April 2020 onwards.

EU nationals and their family members may apply to renew their residence document if they did not enter Malta from abroad in the 14 days preceding the date they visit Identity Malta’s offices to submit their application. EU citizens and their family members are allowed to renew their residence document even if they do not submit the application before the expiry date of their current document.

The directives applicable to EU citizens and their family members are also applicable to UK nationals residing in Malta and other citizens of the UK who are residing in Malta and have not applied for a residence document yet.

Additional information in this respect may be found here.

Deloitte is in daily contact with the Malta Individual Investor Programme Authority and any matters in relation to Malta Individual Investor Programme applications should be referred to Chris Curmi (ccurmi@deloitte.com.mt) or Jonathan Galea (jongalea@deloitte.com.mt).

Extensions to deadlines

MicroInvest Scheme application for self-employed
  • Deadline has been extended from 24 March 2020 to 30 April 2020.
Gozo Transport Grant Scheme for 2019 costs
  • Deadline has been extended from 3 April 2020 to 3 June 2020.

Date: 1 July 2020

Timing of Regulatory Reporting due to the outbreak of COVID-19

Following the assessment of the COVID-19 pandemic situation on the financial services sector and the feedback from the industry, the MFSA considers it necessary and proportionate to once again apply flexibility in the regulatory reporting submissions and publications falling due by June 2020, on a case-by-case basis and very exceptional basis. Learn more...

Date: 17 April 2020

MFSA encourages more use of digital banking services - announces COVID-19 operating arrangements with banks

The MFSA is strongly encouraging banking customers to use phone or digital banking services offered by their preferred bank in order to minimise unnecessary visits to branches. Nonetheless, if customers still feel the need to visit a branch, the MFSA recommends that this is done on weekdays rather than weekends when there are bound to be more queues.

Banks in Malta and Gozo have included certain adjustments in the way that they have been providing their services, in order to ensure ongoing service to their customers, such as adjustments to their opening hours, and rotational opening or closure of some branches to ensure business continuity.

In agreement with the MFSA, each bank is maintaining as a minimum, 50% of its normal weekday branch capacity and 25% on Saturdays. ATMs and paying in machines for cheques are operating normally. The Central Bank of Malta also introduced temporary measures last month regarding the encashment of cheques to minimise further the necessity to visit bank branches. In order to locate the nearest operative branch, banking customers may refer to the list of branches compiled by the Malta Bankers Association.

Date: 16 April 2020

MFSA makes reference to the ECB’s Banking Supervision publication on temporary relief for capital requirements for market risk

In view of the current COVID-19 crises, the MFSA cascaded the publication of the ECB’s Banking supervision related to the temporary reduction in capital requirements for market risk, by allowing Banks to adjust the supervisory component of these requirements. This decision will be reviewed after six months on the basis of observed volatility.

Date: 15 April 2020

Circular to credit institutions and foreign branches outlining COVID-19 measures on timing of supervisory reporting

The Banking Supervision Unit issued a circular outlining COVID-19 measures on the timing of supervisory reporting, following the ECB’s letter sent to credit institutions dated 15 April, 2020 and EBA’s statement on supervisory reporting and Pillar 3 disclosures dated 30 March, 2020. In the circular the MFSA clarified and listed which reporting and its adjusted remittance date as per COVID-19 measures.  

Date: 7 April 2020

Impact of COVID-19 on the Maltese Securities Market

Generally, the Malta Stock Exchange, continues to operate in an orderly fashion, and although there has been a drop in prices, as is the global trend at the moment, this has not been to the extent experienced by other foreign markets. While there has been an increase in trading activity, with a number of investors actively trying to exit the market, this was counter-balanced by a number of investors who are viewing the current market as an opportunity to invest in the securities at discounted prices.

The MFSA understands that the current situation has created new challenges to Issuers and their auditors in preparing and auditing financial information, as they are finding it difficult to predict their financial performance given the unknown extent of duration of the present situation. On the other hand, the measures being introduced by government to support businesses, which have been announced in the past weeks, are evolving rapidly and could evolve further.

In response to these challenges, the MFSA has taken the following actions to ensure that information continues to flow to investors:

  1. Publication of circulars
  2. Engaging with different stakeholders

For more information please click here.

Date: 26 March 2020

COVID-19 Cybersecurity communication for consumers

A communication for consumers was issued by the MFSA on COVID-19 Cybersecurity outlining some useful cybersecurity tips for consumers of Financial Services.

The communication issued by the MFSA may be found here.  

Date: 24 March 2020

Information for consumers addressing the coverage under insurance policies in the context of COVID-19

In light of the COVID-19 pandemic, the MFSA issued Circular addressing the levels of coverage for each type of insurance and the applicable terms for the most common situations faced by policy holders as a result of the current pandemic. For travel insurance specifically, guidance is being given on actions consumers should take in the event of a holiday cancellation, self-isolation and when making travel plans.

The circular issued by the MFSA may be found here.
 

Date: 24 March 2020

Issuance of guidance to consumers on the use of financial services during these extraordinary times

In light of the COVID-19 pandemic, the MFSA issued a set of guidelines to consumers, also outlining the measures it has put in place to safeguard their interests during such extraordinary times.

The guidelines issued by the MFSA may be found here.  

Date: 24 March 2020

COVID-19 Business continuity planning

With effect from 24 March 2020, the MFSA has requested that, until communicated otherwise, all documentation submitted to the MFSA should be sent electronically, as part of the regulator’s COVID-19 contingency and business continuity planning.

Copies by mail/courier following the receipt of the email containing the scanned documentation may still be requested by the regulator. Original signed documents, certified true copies and any other documentation that is ordinarily submitted to the MFSA in physical format will be expected to be submitted retrospectively at a future date, as and when communicated by the MFSA.
Similarly, all documentation from the MFSA including, but not limited to, documents related to authorisations, supervision and enforcement, shall be submitted electronically. Original signed documents will be dispatched at a future date.

Furthermore, payment for applications, authorisations and ongoing licence fees shall be made to the MFSA by means of bank transfer.

Date: 21 March 2020

Extensions to regulatory reporting deadlines

Extensions applicable to capital markets

Guarantors of listed companies – Annual audited financial statements

  • The MFSA will consider granting an extension for next publications which are due four months after the end of each financial year on a case-by-case basis following the submission of an official request explaining the exceptional circumstances.

Listed companies – Financial analysis summary

  • An extension of two months shall be granted for next publications which are due by two months after the publication of the audited financial statements.
Extensions applicable to credit institutions

Audited annual financial statements and management letter

  • The MFSA is inclined to grant an extension for next submissions due by March or April 2020 on a case-by-case basis following the submission of an official request.

Payment accounts with basic features

  • An extension of two months shall be granted to all entities in scope for the completion of the Q1 submission.
Extensions applicable to financial institutions

Audited annual financial statements and management letter

The MFSA will consider granting an extension for next submissions due by March or April on a case-by-case basis following the submission of an official request.

Extensions applicable to insurance and reinsurance undertakings

The MFSA has adopted the Recommendations on supervisory flexibility regarding the deadline of supervisory reporting and public disclosure - Coronavirus/COVID-19 issued by EOIPA. The recommendations aim to offer operational relief and support business continuity of insurance and reinsurance undertakings. The recommendations adopted are as follows:

Recommendation 1

Annual reporting referring to year-end occurring on 31 December 2019 or year-end after that date but before 1 April 2020:

(a) An eight week delay in the submission of the Regular Supervisory Report both at solo and group level.

(b) An eight week delay in the submission of the annual Quantitative Reporting Templates with the following exceptions: Content of the Submission (S.01.01), Basic Information (S.01.02), Balance-sheet (S.02.01), Cash-Flow projections for life business (S.13.01), LTG (S.22.01), Own funds (S.23.01) and SCR calculation (S.25.01 to S.25.03) at solo level.

(c) An eight week delay in the submission of the annual Quantitative Reporting Templates with the following exceptions: Content of the Submission (S.01.01), Basic Information (S.01.02), Balance-sheet (S.02.01), LTG (S.22.01), Own funds (S.23.01), SCR calculation (S.25.01 to S.25.03) and Undertakings in the scope of the group (S.32.01) at group level.

(d) Competent authorities should accept a two week delay in the submission of the templates described in paragraphs (b) and (c) above.

Recommendation 2

Quarterly reporting referring to Q1 2020-end occurring on 31 March 2020 or after that date but before 30 June 2020:

(a) A one week delay in the submission of the Q1-2020 Quantitative Reporting Templates and the Quarterly Financial Stability reporting both at solo and group level with the following exceptions: Derivatives Transactions (S.08.02) in the Quantitative Reporting Templates.

(b) A four week delay for the template Derivatives Transactions (S.08.02).

(c) Insurance and reinsurance undertakings are expected to report in the Own Funds template (S.23.01) an estimation of the SCR for the end of the quarter reference date, and not the last calculated one as indicated in the Instructions.

Recommendation 3

Solvency and Financial Condition Report referring to year-end occurring on 31 December 2019 or year-end after that date but before 1 April 2020:

(a) An eight week delay for the publication of the Solvency and Financial Condition Report (SFCR) with the exception of the following information: Balance-sheet (S.02.01), LTG (S.22.01), Own funds (S.23.01) and SCR calculation (S.25.01) using the templates as identified in Commission Implementing Regulation (EU) 2015/2452 both at solo and group level.

(b) A two week delay in the publication of the templates described above, using the means of disclosure usually used for the publication of the SFCR.

(c) The extensions set out in paragraphs (a) and (b) above also apply to the audit requirements on the relevant elements of the SFCR.

(d) Insurance and reinsurance undertakings should consider the current situation as a “major development” as referred to in article 54(1) in the Solvency II Directive and publish at the same time of publication of the information referring to the year-end occurring on 31 December 2019 or after, any appropriate information on the effect of the Coronavirus/COVID-19 in the published information.

The MFSA has further provided the following extensions in relation to regulatory reporting not falling under the Solvency II Directive:

  • An eight week extension for the submission of the December 2019 year end Annual National Specific Templates (deadline extended to 2 June 2020);
  • A two week extension for the submission of the December 2019 year end annual audited financial statements (deadline extended to 21 April 2020); and
  • A one week extension for the submission of the Q1 2020 Quarterly National Specific Templates and management accounts (deadline extended to 12 May 2020).
Extensions applicable to insurance intermediaries

Audited financial statements, management accounts and compliance statements

  • An extension of two months shall be granted to all entities in scope for next submissions due by March or April 2020.
Extensions applicable to pensions

Schemes – Audited annual financial statements, management letter and auditor’s report

  • An extension of two months shall be granted to all entities in scope for next submissions due by March or April 2020.

Service providers – Audited annual financial statements and interim/annual financial return

  • An extension of two months shall be granted to all entities in scope for next submissions due by March or April 2020.
Extensions applicable to investment firms

Category 1-4 (excluding credit institutions) – Annual report, audited financial statements, COREP return, management letter and Circularisation Exercise Report

  • The MFSA is ready to accept next submissions due by March or April up to two months from the reporting date on a case-by-case basis following the submission of an official request.
Extensions applicable to investment funds and fund managers

UCITS, UCITS ManCos, AIFs and AIFMs – Annual report, audited financial statements, interim/annual financial return, management letter and confirmations

The MFSA is ready to accept next submissions due by March or April up to two months from the reporting date on a case-by-case basis following the submission of an official request.

Professional Investor Funds – Annual report, audited financial statements, management letter, custodian report, auditor’s confirmation and SRO declaration

  • An extension of two months shall be granted to all entities in scope for next submissions due by March or April 2020.

Recognised persons (RFAs, RICCs, PCIS), de minimis AIFMs – Annual report, audited financial statements, auditor’s report, audited financial return, management letter, board confirmation and auditor’s confirmation

  • An extension of two months shall be granted to all entities in scope for next submissions due by March or April 2020.
Extensions applicable to trustees and CSPs

Audited annual financial statements

  • An extension of two months shall be granted to all entities in scope for next submissions due by March or April 2020.

Further guidance with respect to the above extensions to deadlines announced by the MFSA, including also additional information with respect to deadlines where the MFSA is not inclined to grant an extension, can be found here.

Date: 27 May 2020

Reopening of offices

The Malta Business Registry will be reopening its offices to the public on the 1 June 2020.

In the best interest of employees’ as well as clients’ health, clients are being advised that a number of precautionary measures are being taken, such as wearing adequate face protection when visiting the MBR’s premises and limiting the number of people which are allowed in the premises at the same time.

Clients are being encouraged to keep making use of their online system as much as possible and only visit their offices when absolutely necessary.

Date: 13 March 2020 (updated 2 April 2020)

Business-continuity contingency plan

As of 13 March 2020, the Malta Business Registry (the ‘MBR’) has closed its offices to the general public and has put in place a number of remote working measures, in terms of their business continuity contingency plan, to ensure continuous operations throughout this pandemic, noting that all services are in full operation.

The MBR continues to provide services through the following methods:

  • The registration of corporate documents through the online services offered on the MBR website;
  • The ordering of certificates or documents through an email address provided by the MBR which documents are to be returned by post;
  • Payments of penalties and fees may be made through online bank transfer;
  • Paper format documentation are to be delivered to a dedicated letterbox at the entrance of the MBR premises and the processing of such documents will start on the first working day after 72 hours from receipt of such document;
  • Meetings shall be held through teleconferencing only;
  • Telephone lines will operate as normal;
  • Documents addressed to the International & Corporate Tax Unit are to be delivered in the dedicated letterbox clearly indicating that these relate to share transfers and the share transfer documents will be processed and the necessary documentation will be forwarded to the MBR; and
  • On-site inspections will be held through digital means.

Any queries may be forwarded by email on info.mbr@mbr.mt or by telephone on 22582300.

Date: 25 March 2020

Submission of Annual Returns and Financial Statements

The Registrar has announced that if a company is affected by the
COVID-19 situation and the filing of the annual return and/or financial statements falls within the period 23 March 2020 to 31 May 2020, the relevant penalties applicable with respect to the late filings of annual returns and financial statements shall not be imposed provided that, the annual return and/or financial statements are filed with the Registrar by 31 July 2020.

If the company has other additional notifications to submit with the Registrar but is unable to do so due to the COVID-19 situation, one may inform the Registrar via email on info@mbr.mt. The email shall include the name and registration number of the company, the type of notification/return, and the reasons as to why such return cannot be duly filed. If an email is not sent within the notification period allowed by law, no revisions of penalties will be
considered for such company.

Date: 22 May 2020

Notice issued by the Commissioner for Revenue on the social security contribution implications of the COVID Wage Supplement

The Commissioner for Revenue (‘CfR’) has issued a notice to clarify the social security contribution (‘SSC’) implications with respect to the COVID Wage Supplement.

SSC implications for self-employed persons

Eligible self-employed persons will receive €800 (or less, depending on the person’s eligibility) from the Government of Malta and the Government of Malta will retain 10% SSC (€80 or less) as pre-paid SSC. The self-employed person shall calculate the totality of the SSC due to the CfR at the normal SSC rates for all the weeks covered by the respective SSC instalment and deduct therefrom the amount of SSC prepaid as detailed herein.

SSC implications for employed persons who are liable to pay Class 2 SSC

Where employers of employees liable to pay Class 2 SSC rates are eligible for the COVID Wage Supplement on behalf of such persons, the 10% SSC shall be retained and treated as pre-paid SSC.

The emoluments earned and tax paid should be declared on the relevant Final Settlement System forms. However, the Class 2 SSC should be omitted from such forms in line with standard procedures.

The full text of the notice may be accessed here.

Date: 7 May 2020

OECD Secretariat Analysis of Tax Treaties and the impact of the COVID-19 adopted by the Office of the Commissioner for Revenue

Following the publication of guidance by the Organisation for Economic Co-operation and Development (‘OECD’) on issues arising out of the application of tax treaties due to the impact of the COVID-19 crisis on 3 April 2020 (the ‘Guidance’), the Commissioner for Revenue has announced that it shall be adopting the said Guidance.

The Guidance addresses various cross-border tax issues arising out of the COVID-19 crisis, including the creation of permanent establishments, the residence status of companies, the taxation of cross-border workers and the residence status of individuals.

The application of this Guidance is of a temporary nature due to the current exceptional circumstances being faced by taxpayers on a global level.

The full report may be found here.

Date: 30 April 2020

Electronic filing extension of corporate income tax returns for 2020

The Commissioner for Revenue has announced that the deadlines for the electronic filing of income tax returns for companies have been extended as outlined below:

Financial year ending

Manual return deadline

Online submission extension deadline

31 January 2019

31 March 2020

31/07/2020

28 February 2019

31 March 2020

31/07/2020

31 March 2019

31 March 2020

31/07/2020

1 April 2019

31 March 2020

31/07/2020

31 May 2019

31 March 2020

31/07/2020

30 June 2019

31 March 2020

31/07/2020

31 July 2019

30 April 2020

31/07/2020

31 August 2019

31 May 2020

31/07/2020

30 September 2019

30 June 2020

31/08/2020

31 October 2019

31 July 2020

30/09/2020

30 November 2019

31 August 2020

02/11/2020

31 December 2019

30 September 2020

27/11/2020

Kindly note that this is not a measure specific to COVID-19 and only applies to the electronic filing of tax returns (excluding manual tax return filings and tax payments).

Date: 28 April 2020

Provisional tax deadline extension

The Commissioner for Revenue informed taxpayers and tax practitioners that the April Provisional Tax submission deadline has been extended from 30 April to 31 May 2020. Kindly note that this is not a measure specific to COVID-19.

Due to the COVID-19 outbreak, Provisional Tax claims shall not be sent via mail and are being made available online through the Commissioner for Revenue’s e-services.

Date: 4 April 2020

Notice to employers on the payroll implications applicable with respect to the COVID Wage Supplement

COVID Wage supplement

The wage supplement (i.e. €800 or less according to eligibility) is the contribution of the Government of Malta to the employer to support the wages of the enterprise employees.

This income is replacing the normal wages of the employee hence it is taxable in the hands of the employee.

For payroll purposes this income will be added to any income received by the employee during the pay period and tax and social security contributions (including maternity contributions) will be calculated in the standard method.

The employer must record receiving the wage supplement (for example €800) and paying this gross amount to employee so payroll requires no changes. The payslip will show the gross amount paid (i.e. €800 or the amount eligible).

The wage supplement paid to employers will not be treated as income or grants to the employer for income tax purposes, hence this is not taxable nor tax deductible.

Social Security Contributions and Maternity Contributions

Government will give €800 (or less according to eligibility) to the employer for each employee though it will retain the 10% Social Security Contribution (i.e. €80 or less) as the prepaid share of the said Contribution of the employees.
The employer will then calculate what is due in totality to the Commissioner for Revenue (i.e. the employers and employees share, Maternity Contribution and taxes) and deduct therefrom the amount of the Social Security Contribution prepaid to the Commissioner for Revenue.

On Form FS5 the total due to the Commissioner for Revenue less the Social Security Contribution when the wage supplement is paid, will be shown in box D5.

FS7/FS3 Reporting

Malta Enterprise will provide the full details of the applications to the Commissioner for Revenue. Thus, employers will report the COVID Wage Supplement paid to employees in the normal FS3 forms.

FS7 will be modified to show the amounts paid to employers and the Social Security Contribution withheld from the wage supplement.

Additional information in this respect may be found here.

Temporary closure of Share Transfers Receiving Section and alternative arrangements

The Commissioner for Revenue has announced that the front office that processes share transfer documents for income tax and duty purposes housed within the premises of the Malta Business Registry will be closed with effect from Monday 16 March 2020 until further notice.

The International & Corporate Tax Unit will still be processing the share transfer applications in accordance with the following procedure:

  • Envelopes with the required documents addressed to the International & Corporate Tax Unit are to be left at the main reception of the Malta Business Registry clearly indicating that these relate to share transfers.
  • The share transfer documents will be processed and the necessary documentation will be forwarded to the Malta Business Registry.

Should any further documentation be needed, the same procedure outlined above will be adopted.

Furthermore, the stamped schedule/s and share transfer agreement/s will be sent to the applicant by post. All contact details, including a mailing address, an email address and contact numbers, shall be provided.

Extension to FATCA and CRS reporting deadlines following the outbreak of the COVID-19 pandemic

The Commissioner for Revenue, in response to the challenges brought about by the outbreak of COVID-19, has announced an extension to the FATCA and CRS reporting deadline in relation to reporting year 2019.

In light of this, and in order for Malta to continue to honour its international commitments in terms of FATCA and CRS, the Commissioner for Revenue has announced that reporting Malta financial institutions must submit the required reports by not later than 30 June 2020 in relation to reporting year 2019.

Date: 16 April 2020

OECD issues Tax and Fiscal Policy in Response to COVID-19 Crisis Report

On 15 April, the OECD released its report on Tax and Fiscal Policy in Response to the Coronavirus Crisis (the ‘Report’) in continuation to its previous efforts in tackling the COVID-19.

The Report focuses on:

  • An overview of recent short-term tax and fiscal measures adopted by countries to respond to the COVID-19 crisis with a view to support businesses, households, investment and consumption and the healthcare sector;
  • Next challenges to be faced by governments and businesses and the role of tax policy during prolonged containment phases, outlining potential further support measures for businesses and households; and
  • Tax policy options in the recovery phases of the pandemic.

Lastly, the OECD addresses revenue, budget and public debt impacts of containment and mitigation of the crisis and emphasises on the need to re-evaluate options for tax policy in the aftermath of the crisis, thereby pushing for the need to move on with the implementation of measures dealt with by Pillar One and Pillar Two.

The full text of the Report may be found here.

Date: 3 April 2020

OECD analysis of Tax Treaties and the impact of COVID-19

At the request of concerned jurisdictions, the Organisation for Economic Co-operation and Development (the ‘OECD’) Secretariat has issued guidance on issues arising out of the application of tax treaties due to the impact of the COVID-19 crisis. The report published by the OECD Secretariat delves into concerns revolving around the creation of permanent establishments (‘PE’), the residence status of companies, cross-border workers and changes to the residence status of individuals.

For more information please refer to this page

This guidance has recently been adopted by the Malta Office of the Commissioner for Revenue. Kindly refer to the announcements of the Office of the Commissioner for Revenue above for the full announcement.

Accounting considerations
 

IFRS in Focus

Date: 20 April 2020

IFRS in Focus: IFRS accounting considerations related to conditions that may result from the COVID-19 pandemic

Deloitte has issued a third publication in connection with accounting considerations in relation to COVID-19.

This IFRS in Focus discusses certain key IFRS accounting considerations related to conditions that may result from the COVID‑19 pandemic. The significance of the individual issues discussed below will of course vary by industry and by entity, but we believe that the following topics will be the most pervasive and difficult to address.

Preparation of forecast cash flow estimates—The use of forecast information is pervasive in an entity’s assessment of, among other things, the impairment of non‑financial assets, expected credit losses, the recoverability of deferred tax assets and the entity’s ability to continue as a going concern. Unique complexities associated with preparing forward‑looking information as a result of the pandemic and economic downturn include the following:

  • There is an extremely wide range of possible outcomes, resulting in a particularly high degree of uncertainty about the ultimate trajectory of the pandemic and the path and time needed for a return to a “steady state.”
  • The associated economic impact of the pandemic is highly dependent on variables that are difficult to predict. Examples include the degree to which governments prohibit business and personal activities, the associated level of compliance by citizens, the degree to which “flattening the curve” is successful, and the nature and effectiveness of government assistance.
  • Each entity must then translate the effect of those macro conditions into estimates of its own future cash flows.

Nevertheless, entities will need to do their best to make reasonable estimates, prepare comprehensive documentation supporting the basis for such estimates and provide robust disclosure of the significant judgements exercised, the key assumptions used and, potentially, their sensitivity to change.

Recoverability and impairment of assets—Perhaps the most acute example of the increased challenge associated with forecast information is the impairment testing for non-financial assets (for example, property, plant and equipment (PP&E), right-of-use assets, intangible assets and goodwill). The impairment test for these assets often requires the development of cash flow projections that are subject to the significant uncertainties noted above.

Accounting for financial assets—There has been a severe decline in the fair value of many financial assets, particularly equity securities. Likewise, the ability of debtors to comply with the terms of loans and similar instruments has been adversely affected. Entities will need to carefully consider and apply the appropriate measurement and impairment loss recognition requirements.

Contract modifications—Changes in the economic activity caused by the pandemic will cause many entities to renegotiate the terms of existing contracts and arrangements. Examples include contracts with customers, compensation arrangements with employees, leases and the terms of many financial assets and liabilities. Entities will need to ensure that the relevant requirements in IFRS Standards are applied.

Events after the end of the reporting period—It may be challenging for an entity to determine if an event after the end of the reporting period is adjusting or non-adjusting in a global marketplace that is extremely volatile and in which major developments occur daily (e.g. announcements of government stimuli and restrictions) and the stock market’s daily reaction to new information. Although entities may not have all facts “on hand” at the reporting date, once such facts are gathered an assessment must be based on conditions as they existed at the reporting date. The amounts in the financial statements must be adjusted only to reflect subsequent events that provide evidence of conditions that existed at the reporting date. With respect to reporting periods ending on or before 31 December 2019, it is generally appropriate to consider that the effects of the COVID-19 outbreak on an entity are the result of events that arose after the reporting date, for example decisions made in response to the COVID-19 outbreak, that may require disclosure in the financial statements, but would not affect the amounts recognised. For subsequent reporting periods, the effects of the COVID-19 pandemic may affect the recognition and measurement of assets and liabilities in the financial statements. This will be highly dependent on the reporting date, the specific circumstances of the entity’s operations and the particular events under consideration.

Going concern—As a result of COVID-19 and its associated effects, entities need to consider whether, in their specific circumstances, they have the ability to continue as a going concern for at least, but not limited to, 12 months from the reporting date. Management’s assessment of the entity’s ability to continue as a going concern involves making a judgement, at a particular point in time, about inherently uncertain future outcomes of events or conditions. This will require an entity to consider, among other things, (1) the extent of operational disruption; (2) potential diminished demand for products or services; (3) contractual obligations due or anticipated within one year; (4) potential liquidity and working capital shortfalls; and (5) access to existing sources of capital (e.g., available line of credit, government aid). In making its going concern assessment, IAS 10 Events after the Reporting Period requires an entity to consider events up to the date of authorisation of the financial statements. In certain jurisdictions, regulations may extend this period (e.g. until presentation of the financial statements at an annual shareholders’ meeting).


Entities must carefully consider their unique circumstances and risk exposures when analysing how recent events may affect their financial statements. Specifically, financial statement disclosures will need to convey the material effects of the COVID-19 pandemic.

IFRS in Focus

Date: 27 March 2020

IFRS in Focus: IFRS accounting considerations related to conditions that may result from the COVID-19 pandemic

This IFRS in Focus discusses certain key IFRS accounting considerations related to conditions that may result from the COVID 19 pandemic. The significance of the individual issues discussed in this publication will of course vary by industry and by entity.

Going concern: It should be noted that the assessment as to whether the going concern basis is appropriate takes into account events after the end of the reporting period. For example, 31 December 2019 reporters that are severely affected by COVID-19 will need to consider the appropriateness of preparing financial statements on a going concern basis (even though the significant impact on operations occurred after year-end).

Effect on the amounts recognised: We also remind you that with respect to reporting periods ending on or before 31 December 2019, it is generally appropriate to consider that the effects of the COVID-19 outbreak on an entity are the result of events that arose after the reporting date that may require disclosure in the financial statements but would not affect the amounts recognised.

Date: 13 March 2020

IFRS in Focus: Key issues to be considered as a result of COVID-19

Global response to the coronavirus disease 2019 (COVID-19) outbreak continue to rapidly evolve. COVID-19 has already had a significant impact on the global financial markets and it may have accounting implications on companies.

Deloitte has issued the attached publication to highlight some of the key issues to be considered by entities in preparing their financial statements applying IFRS for periods ending on or after 31 December 2019.

As COVID-19 continues to spread globally, it may be appropriate for entities to consider the impact of the outbreak on accounting conclusions and disclosures related to, but not limited to, the following:

  • Impairment of non-financial assets (including goodwill).
  • Valuation of inventories.
  • Allowance for expected credit losses.
  • Fair value measurements.
  • Onerous contracts provisions.
  • Restructuring plans.
  • Breach of loan covenants (including impact on the classification of liabilities a current vs non-current).
  • Going concern.
  • Liquidity risk management.
  • Events after the end of the reporting period.
  • Insurance recoveries related to business interruptions.
  • Employment termination benefits.
  • Share-based compensation performance conditions and modifications.
  • Contingent consideration in contractual arrangements.
  • Modifications of contractual arrangements.
  • Tax considerations (in particular, recoverability of deferred tax assets).

The ultimate recognition of accounting impacts related to these issues will vary depending on each entity’s specific facts and circumstances.

Whilst we understand that your main priority at the moment is the safety and wellbeing of your people, we are available to assist you should you require help in evaluating these considerations.

Looking ahead, the impact of COVID-19 on the global economy and financial markets is expected to continue to evolve. Entities should continue to evaluate the related accounting issues and disclosure considerations discussed above as facts and circumstances change.

Economic Regeneration Plan
 

COVID Wage Supplement July – September

With effect from 1 July 2020 until 30 September 2020:

  • Businesses operating in specific sectors (tourist accommodation, travel agencies, language schools, event organisation and air transport) shall continue to receive a monthly Wage Supplement of €800 for full-time employees and €500 for part-time employees.
  • Businesses operating in sectors listed under Annex A but which do not operate in the sectors listed above shall receive a monthly Wage Supplement of €600 for full-time employees (as opposed to €800) and €375 for part-time employees (as opposed to €500). Students and pensioners who are in employment shall be entitled to receive the Wage Supplement as detailed herein.
  • Personal services and other businesses/self-employed persons who depend on local consumption that were operating in sectors listed under Annex A shall be moved to Annex B and shall continue to benefit from the partial Wage Supplement under Annex B. This being a monthly Wage Supplement of €160 for full-time employee and €100 for part-time employees (regard must also be had to the amount paid to self-employed persons and businesses based in Gozo).
  • Businesses and self-employed persons operating in sectors listed under Annex B shall continue to receive the Wage Supplement until 30 September 2020.

Rent Refund

Businesses shall be eligible to apply for a one-time grant capped at €2,500 per applicant, to cover rental expenses for the months of June, July and August. In order to benefit from this grant, businesses shall submit their lease agreements. This incentive shall only be available to businesses that have been granted the COVID Wage Supplement (and therefore applicable to enterprises operating in the sectors listed under Annex A and Annex B).

Electricity Bill Refund

Businesses shall be awarded a refund of 50% of their electricity bills, capped at €1,500 per applicant, for the months of June, July and August. The refund shall not include payment for the meter. This incentive shall only be available to businesses that have been granted the COVID Wage Supplement (and therefore applicable to enterprises operating in the sectors listed under Annex A and Annex B).

Business Re-Engineering Consultancy

Businesses shall be awarded up to €5,000 per applicant to procure professional assistance for the development of new business plans and to explore new technological solutions.  

Skills Development Scheme

The existing Skills Development Scheme shall be allocated an additional sum of €5 million to assist SME’s with in-house training. This additional sum shall be directed towards those businesses that employ less than 50 persons.

Micro Invest Cash Conversion

Undertakings that invested in 2019 and benefitted from the tax credit under the Micro Invest scheme shall benefit from a conversion of 30% of the tax credit into a cash grant. The grant is capped at €2,000 for any business and capped at €2,500 for business based in Gozo, family-run businesses and those run by female entrepreneurs.

COVID R&D Fund

Malta Enterprise and the Malta Council for Science and Technology have issued a call for proposals for interested applicants that intend to provide innovative and/or improved approaches with respect to current and/or future infectious disease prevention, control and contain the spread. Aid shall be awarded in the form of a cash grant ranging from 80% up to 100% of eligible costs. The deadline for submission of applications by interest applicants is 30 November 2020 and this scheme shall be available until 31 December 2020. This scheme was issued under the EU Temporary Framework to enable EU Member States to adopt financial aid measures to support their economies in the context of the COVID-19 outbreak without these measures constituting prohibited state aid.  

Investment Aid for the production of COVID-19 relevant products

Malta Enterprise has issued a call for proposals for interested applicants that have the technological competence to invest in the development of production units and solutions that result in products and services that support health authorities in their work to control the COVID-19 pandemic, that the health sector can use in treating COVID-19 health issues and, that can be used to limit and contain transmission (and health risks) during and post the COVID-19 outbreak. Aid shall be awarded in the form of a cash grant or a repayable advance of up to 80% of eligible costs with the possibility of an additional bonus in the form of tax credit. This scheme shall be available until 31 December 2020. This scheme was issued under the EU Temporary Framework to enable EU Member States to adopt financial aid measures to support their economies in the context of the COVID-19 outbreak without these measures constituting prohibited state aid.  

Fuel Prices

With effect from Monday 15 June 2020 the price of fuel has been reduced by €0.07 per litre.

  • Price of petrol – €1.34 per litre.
  • Price of diesel – €1.21 per litre.

Vouchers

Persons in employment earning less than €60,000 shall once again receive a tax refund during 2020.

Tax Refunds

Couples who had to postpone their wedding are eligible to receive a refund of up to €2,000 for expenditure incurred in order to postpone their wedding.

Reduced Rate of Stamp Duty

Stamp duty levied on inter vivos transfers of immovable property made on or after the 9 June 2020 but before the 1 April 2021 shall be reduced to 1.5% on the first €400,000 of the amount or value of the consideration for the transfer of the property or the value of the property (whichever is the higher). Stamp duty levied on the remainder of the amount or value of the consideration for the transfer of the property or the value of the property at the rate of 5%. The reduced rate of stamp duty shall be applicable with respect to any transfer of property that satisfies all the following conditions:

  • Notice of the final deed in relation to such transfer is given to the Commissioner for Revenue by not later than the 30 April 2021;
  • The person acquiring the property does not require a permit for the purposes of the Immovable Property (Acquisition by Non-Residents) Act; and
  • No relief is claimed under article 32C of the Duty on Documents and Transfers Act (regulating transfers by gratuitous title) on the same transfer.  

Reduced Rate of Property Transfer Tax

Income tax levied on the sale of immovable property situated in Malta shall be reduced to 5% on the first €400,000 of the transfer value of that property. Income tax levied on the remainder of the transfer value shall be levied at the rate of 8% or 10% (as applicable in terms of the relevant provisions of the Income Tax Act). The reduced rate of income tax shall be applicable with respect to any transfer of property that satisfies all the following conditions:

  • The transfer is made on or after 9 June 2020 but before 1 April 2021;
  • In terms of the relevant provisions of the Income Tax Act, the transfer would be subject to tax at the rate of 8% or 10% of the transfer value; and
  • The notice of the transfer that is required to be given in terms of the relevant provision of the Tax on Property Transfers Rules is delivered to the Commissioner for Revenue by not later than 30 April 2021.

First Time Buyers Scheme

With respect to transfers of property made on or after 9 June 2020, the previous acquisition by a person of an undivided share of immovable property representing less than 25% of the real value of the whole property shall not be taken into account when determining whether the property is the first immovable property acquired inter vivos by such person.  

Home Deposit Scheme

With effect from 4 June 2020, through the Home Deposit Scheme, the Government shall be offering interest-free loans repayable over 25 years, to eligible first-time buyers, aged less than 40, to finance the 10% deposit payable upon signing a promise of sale agreement capped at €17,500.

Modernisation of Equipment for Use in Construction

Businesses shall be eligible to receive support of up to €200,000 to invest in more efficient and environment-friendly machinery.

Export Credit Guarantee and other Import/Export Measures

  • Local businesses that export their products to new markets such as the African continent, Middle East, and Latin America shall benefit from an export credit guarantee scheme which shall be administered by Malta Enterprise and the Malta Development Bank. €10 million has been allocated to this scheme.
  • A refund of 33% of port charges for those ships that import goods into Malta in order to support the supply chains of our economy for the period 1 June to 31 December 2020.
  • A refund of 10% on container discharge fees for import and export of goods but not on transhipment for the period 1 June to 31 December 2020.

Industrial Infrastructural Projects

Investment of €400 million in industrial infrastructural projects over the next 8 years. Projects include an extension of the Life Sciences Park, upgrading of the Kordin Business Incubation Centre, an industrial park for small businesses and a new logistics hub.

Other Support Measures

  • Payments for licenses made to the Commerce Department and the Malta Tourism Authority will be waived.
  • €5 million budget afforded to those businesses that want to advertise Maltese products locally and abroad.
  • Local businesses investing in digital marketing campaigns aimed at foreign markets shall be entitled to receive a refund of half the costs incurred capped a €10,000 per applicant.
  • A refund of up to 80% of the costs incurred by businesses for the participation in international fairs which were cancelled due to the COVID-19 pandemic.
  • A new underwriting facility for private enterprise bonds will be set up through the Malta Development Bank, which will close this year.
  • Financial assistance of €3 million shall be awarded to NGO’s.
  • Financial assistance of €2 million shall be awarded to nursing homes.

Contact details for more information:

  • Financial measures administered by Malta Enterprise: Tel. 144 or email covid@maltaenterprise.com
  • Financial measures administered by the department of social security: Tel. 153
  • Impact of COVID-19 on the educational sector: Tel. +356 2598 1000
  • Helpline for gaming companies: Tel. +356 2546 9111 or email gaming.assist@gov.mt
  • Department for Industrial and Employment Relations: A helpline is operating from Monday to Friday between 08:00 – 16:00. Ideally, queries should be done via email to info.dier@gov.mt
    • Helpline for employees: Tel. 1575
    • Helpline for employers Tel. 1576

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