COVID-19 | Fiscal and Social Measures by the Government of Malta
30 March 2020
The effects of the COVID-19 pandemic have been felt worldwide. The Government of Malta has reacted by announcing a number of fiscal and social measures aimed to mitigate these effects on businesses and the self-employed.
1. Deferral of payment of taxes
The first measure is the deferral of VAT and tax payments due in March and April 2020 to a later date. The eligible taxes include: Provisional tax, Employee taxes, maternity fund payments and social security contributions, social security contributions of self-employed persons and Value Added Tax. These can be deferred as follows:
- VAT dues are to be settled in two equal instalments with the two quarterly returns immediately following the quarter whose dues would have been deferred
- All other eligible taxes which were originally due in March and April must be settled in four equal monthly instalments between May and August 2020.
It is important to note that this scheme is a deferral of the tax payments only. All forms which are due to be submitted by March and April 2020 must still be submitted on time.
The deadline to apply for the above-mentioned tax deferral scheme is 15th April 2020.
2. Facilitating Teleworking activities
The second measure is to provide assistance to those employers who have invested in teleworking systems. Only new teleworking agreements commencing after 15th February 2020 will be eligible. Malta Enterprise is offering to pick up 45% of the cost of that installation, capped at €500 per employee and €4,000 per undertaking. One of the conditions is that the employee who will be working from home has entered into a formal teleworking agreement with the employer and that the employer’s accounts are in order and up to date. Management accounts and a simple budget for the coming year needs to be presented too.
The deadline to apply for the teleworking systems scheme has been extended to 8th May 2020.
3. VAT and tax refunds
The third measure announced is a promise by the Government of Malta to expedite the process by which refunds due by the government reach businesses. Such refunds include VAT and tax refunds.
4. Quarantine leave
The fourth measure is the granting of quarantine leave to all individuals who were abroad and returned to Malta as from 13th March 2020. As from 25th March 2020, the employers can benefit from a grant of €350 for each employee who is on quarantine leave.
5. Social Measures
The fifth measures targets individuals on a social level:
- In cases where both parents work in private sectors and one of the parent is required to stay at home with their children (who are under the age of 16 years) and teleworking for both parents does not apply, one of the parent is granted a direct payment of €166.15 every week. This measure also apply for single parent families.
- Individuals with disability who are working in the private sector may opt to stay at home for health and safety reasons and who cannot benefit from teleworking options, will be eligible for a benefit of a direct payment of €166.15 every week.
- A Maltese or EU citizen who becomes redundant as of 9th March 2020 during this pandemic, and the termination is registered with the jobs plus, can apply to receive a direct payment of €166.15 per week if the individual was working on a full time basis and €103.85 if working on a part-time basis
- Third country nationals who becomes redundant during this pandemic, will receive support to find another job.
- Those individuals who lose their job can apply for the rent subsidy scheme, given that they had not already applied when the scheme was introduced.
6. COVID-19 Wage Supplement
The sixth set of measures announced target those employees who work in a sector which was adversely hit by COVID-19. Refer to the below as published by the Malta Enterprise.
- Full time employees of enterprises operating in sectors that suffered drastically due to the COVID-19 pandemic or had to temporarily suspend operations on the order of the Superintendent of Public Health will be entitled to up to five days’ salary based on a monthly wage of €800. This includes all self-employed. Part-time employees will be eligible €500 per month. Annex A contains the list of sectors by NACE.
- Full time employees of enterprises in other adversely affected sectors (Annex B), including wholesale, manufacturing and warehousing will be entitled to one days’ salary per week equivalent to €160 per month. Part-time employees will be eligible to one day’s salary per week, equivalent to €100 per month. In the case of Gozo based enterprises this will increase to two days’ salary per week equivalent to €320 per month for full time employees, and €200 per month for part time employees. Annex B contains the list of sectors by NACE.
- In case of self-employed in other adversely affected sectors (Annex B) who have employees will be entitled to two-days’ salary per week equivalent to €320 per month.
- Self-employed based in Gozo operating in other adversely affected sectors (Annex B) will be entitled to €320 per month. This will increase to €480, for those self-employed who employ staff, and the employees will be entitled to 2 days salary calculated on €800 a month
The above mentioned scheme is available as from 30th March 2020.
7. Further liquidity measures
All those companies and individuals which already have a bank loan, shall be offered a three month moratorium from banks. Furthermore new schemes are being offered by the bank to offer a low interest rate and longer repayment loan period. Moreover the government will also be offering bank guarantees to such companies.
We were also informed by the Malta Business Registry that those companies which were affected by the COVID-19 situation and had to file the annual return and/or the financial statements between 23rd March 2020 and 31st May 2020, have an extension and no penalties will be due if they are filled by 31st July 2020.
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