News

Construction Industry Scheme launched

Deloitte Malta Tax Alert

6 November 2020

Grants and incentives

Following the announcement of a new €4 million fund allocated to the construction industry with the aim of modernising equipment as part of the Economic Regeneration Plan announced by the Government of Malta in June 2020, Malta Enterprise recently issued the Construction Industry Scheme (the ‘Scheme’).

Qualifying beneficiaries may benefit from a cash grant of up to €200,000 in line with de minimis aid. The overall objectives of the Scheme are to:

  • Encourage operators in the construction industry to scrap and replace old machinery or equipment with new equipment that generates less emissions, and/or reduces harmful emissions; and
  • Support businesses engaged in construction activities to invest in new equipment that has the sole purpose of reducing the environmentally harmful emissions released by the activity.

The Scheme is open to limited liability companies, partnerships, self-employed or any other legal entity engaged in:

  • The construction of immovable property, excavation and demolition contractors; or
  • The provision (by means of renting) of equipment to businesses engaged in the construction of immovable property, excavation and demolition contractors; or
  • The transportation of material related to the construction of immovable property, excavation and demolition contractors; or
  • Owners or operators of quarries and batching plants; or
  • Building and finishing contractors.

Eligible costs shall be as follows:

Cash grant of up to 40% of costs

Replacement of construction machinery manufactured prior to 2015 with new machinery or equipment that will result in a reduction in harmful emissions.
Additional support of up to:

a. 20% if the machinery or equipment is powered by an electric engine (battery); or


b. 10% if the machinery or equipment is powered by a hybrid engine.
 

Cash grant of up to 40% of costs

Procurement of new machinery or equipment used exclusively to reduce harmful emissions generated by construction activities.

Cash grant of up to 25% of costs

Replacement of construction machinery or equipment that was manufactured prior to 2015, with second-hand machinery or equipment which will result in a reduction in harmful emissions, provided that such equipment:

a. Has been manufactured after 2016; and
b. Has not been previously used in Malta; and
c. Is certified to meet the original environmental parameters as manufactured by a certified engineer.

 

Claims for approved eligible costs must be supported with appropriate fiscal documentation and proof of payment. Furthermore, a destruction certificate as proof that the old equipment or machinery has been scrapped must be presented. Equipment must be maintained operational by the beneficiary for at least three years from the date it is commissioned.

Malta Enterprise will be accepting applications between 1 December 2020 and 31 May 2021 and application forms should be submitted prior to the purchasing of machinery or equipment. Applications will be processed on a first-come, first-served basis until budget allocated for this measure is fully utilised. The Scheme guidelines and application form will be made available in the coming weeks.

Further information may be accessed here.
 

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