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Business Promotion Act (Cap. 325) Business Promotion (Amendment)(No. 3) Regulations, 2003 (L.N. No. 128 Of 2003 )

BUSINESS PROMOTION ACT (CAP. 325)
Business Promotion (Amendment) (No. 3) Regulations, 2003
IN exercise of the powers conferred upon him by section 59 of the Business Promotion Act, hereinafter referred to as the “Act”, the Minister responsible for Finance and Economic Affairs has made the following regulations>-
1. The title of these regulations is the Business Promotion (Amendment) (No.3) Regulations, 2003, and shall be read and construed as one with the Business Promotion Regulations, 2001, hereinafter referred to as “the principal regulations”.
2. These regulations shall be deemed to have come into force as follows>
(a) regulation 3 shall be deemed to have come into force on
1st November 2000<
(b) regulation 4 shall be deemed to have come into force on
1st January 2003<
(c) regulation 5 shall be deemed to have come into force on
1st January 2003< and
(d) regulations 6, 7, 8, 9, 10, 11, 12 and 13 shall be deemed to have come into force and shall apply with effect from year of assessment 2004 and subsequent years of assessment.
3. In the definition of “qualifying expenditure” in regulation 2 of the principal regulations, for the words “the activities referred to in the second proviso to sub-regulation 5(12)<” there shall be substituted by the words “the activities referred to in article 3(1) of the Business Promotion Act<”.
4. In the English text only, the proviso immediately following regulation 3(11) of the principal regulations shall be amended as follows>

Citation.

L.N. 135 of 2001

.

Commencement.

Amends regulation

2 of the principal regulations.

Amends regulation

3 of the principal regulations.

B 1478

Amends regulation

28 of the principal regulations.

Amends regulation

31 of the principal regulations.

(a) for the words “Provided that this sub-regulations”, there shall be substituted the words “Provided that this sub-regulation”< and
(b) for the words “(ii) the other benefits such enterprises” there shall be substituted the words “(ii) the other benefits such enterprise”.
5. (1) Regulation 7 of the Business Promotion (Amendment No. 2) Regulations, 2003, published by Legal Notice 98 of 2003, shall be deemed as having never been made and as never having come into force for all effects and purposes of the law.
(2) In regulation 28(1) of the principal regulations, for the words “31 December 2002” there shall be substituted the words “30
April 2003”.
6. Regulation 31 of the principal regulations, shall be amended as follows>
(a) in the marginal title thereof, for the words, “Tax credit for life company” there shall be substituted the words “Tax credit for large companies”<
(b) in sub-regulation (1)(a) for the words “medium-sized enterprise<” there shall be substituted the words “medium-sized enterprise< and”<
(c) in the English text only, in sub-regulation (1)(b)(ii) thereof for the words “in any year of assessment subsequent to year of assessment subsequent to year of assessment 2003 and waives,” there shall be substituted the words “in any year of assessment subsequent to year of assessment 2003 and waives,”<
(d) in sub-regulation (1)(b) immediately after the words “1st
January 2003<” there shall be added the word “or”<
(e) in sub-regulation (1)(c), for paragraph (ii) there shall be substituted the following paragraph>
“(ii) pursuant to a change in legislation is no longer entitled to benefit from the provisions of articles 4, 5 or 5A of the Act or of articles 18 or 20 of the Malta Freeports Act<”<
(f) immediately after paragraph (ii) of sub-regulation (1)(c) as herein amended there shall be added the following paragraph which shall apply to the whole of sub-regulation 31(1)>
“such company shall, subject to the approval of the
Corporation, be entitled to the benefits provided by regulations
4 and 5 of these regulations and to utilize the tax credits provided by regulations 32 to 35, as reduced by regulation
36, in accordance with the provisions of regulation 37< and for the purpose of regulation 4 of these regulations, such company shall, for the years of assessment in respect of which it can utilize the aforementioned tax credits in accordance with regulation 37, be deemed to be a company to which regulation 4(2)(b) refers.”< and
(g) in the English text only, in sub-regulation (6) for the word “incentive” there shall be substituted the word “incentives.”.
7. In regulation 33(1) of the principal regulations, for the words “1st January 1995 up to 31st December 2002” there shall be substituted the words “1st January 1995 up to 31st December 2006”.
8. In the English text only, in regulation 35(3) of the principal regulations, immediately following the words “referred to” and immediately preceding the word “sub-regulation”, there shall be added the word “in”.
9. Regulation 36 of the principal regulations shall be amended as follows>
(a) in the English text only, in sub-regulation (1) for the words “articles 5, 5A, 7, 16, 19, 20 or 24C of the Act” there shall be substituted the words “articles 4, 5, 5A, 6, 7, 16, 19, 20 or 24C of the Act”<
(b) immediately after subregulation (3), there shall be added the following new sub-regulation>
“(4) A deduction in respect of the benefits availed of pursuant to articles 6, 7 or 16 of the Act or regulations 5, 8 or
9 shall only be made if the relevant company claims credits
pursuant to regulations 32, 33 or 35 in respect of expenditure on which it was granted benefits under articles 6, 7 or 16 of the Act or regulations 5, 8 or 9.”.
B 1479

Amends regulation

33 of the principal regulations.

Amends regulation

35 of the principal regulations.

Amends regulation

36 of the principal regulations.

B 1480

Amends regulation

37 of the principal regulations.

Amends regulation

38 of the principal regulations.

10. Regulation 37 of the principal regulations, shall be amended as follows>
(a) in sub-regulation (1)(b) for the words “in the absence of that incentive>” there shall be substituted the words “in the absence of that incentive, and deducting the fraction so obtained from the integer one (1), and multiplying the result by 100>”<
(b) in sub-regulation (1)(c) for the words “in the absence of that incentive>” there shall be substituted the words “in the absence of that incentive, and deducting the fraction so obtained from the integer one (1), and multiplying the result by 100>”<
(c) in sub-regulation (1)(d)(iv) for the words “article 5A subsequent to year of assessment 2003 shall, in the case of a company to which paragraph (c)(ii) of sub-regulation 31(1)” there shall be substituted the words “articles 5 and 5A subsequent to year of assessment 2003 shall, in the case of a company to which paragraph (c)(i) of sub-regulation 31(1)”<
(d) in sub-regulation (1)(e) for the words “the amount of the tax credits and where the tax credits, for year of assessment
2007” shall be deleted and substituted by the words “the amount
of the tax credits and where the tax credits, for year of assessment
2004”.
11. Regulation 38 of the principal regulations shall be amended as follows>
(a) in sub-regulation (1)(b) for the words “paragraph (b) and (c) of sub-regulation (1) of regulation 31 hereof<” there shall be substituted the words “paragraph (b) or (c) of sub-regulation (1) of regulation 31 hereof<”<
(b) in the proviso to sub-regulation (1) for the words “the provisions of this regulations” there shall be substituted the words “the provisions of this regulation”.
(c) in sub-regulation (3) for the words “in the absence of that incentive>” there shall be substituted the words “in the absence of that incentive, and deducting the fraction so obtained from the integer one (1), and multiplying the result by 100>”<
(d) in sub-regulation (4) for the words “in the absence of that incentive>” there shall be substituted the words “in the absence
of that incentive, and deducting the fraction so obtained from the integer one (1), and multiplying the result by 100>”.
12. In regulation 41 of the principal regulations immediately after the words “ entitlement to a tax credit under” and immediately before the words “these regulations” there shall be added the words “regulations
32 to 35 of”.
13. Immediately after regulation 42 of the principal regulations, there shall be added the following new regulation>
“43. (1) With effect from year of assessment 2004 the profits which shall be taxed at the reduced rates of tax in accordance with the provisions of regulation 4 or 6 of these regulations shall not, in any relevant year of assessment, exceed the amount produced by multiplying the number of employees by>
a) Lm25,000 or such higher amount as may result from the adjustments referred to in sub-regulations (2) and (3) hereof, where the profits are taxed at the rate of 5%<
b) Lm28,000 or such higher amount as may result from the adjustments referred to in sub-regulations (2) and (3) hereof, where the profits are taxed at 10% or 15%<
(2) The amounts of Lm25,000 and Lm28,000 referred to in sub-regulation (1) hereof are stated at 2002 prices and these amounts shall in respect of year of assessment 2004 be increased by a percentage equal to the percentage increase in the inflation index, established in terms of article 13 of the Housing (Decontrol) Ordinance, during 2003. For subsequent years of assessment these amounts shall be increased by a percentage equal to the percentage increase in the inflation index, established in terms of article 13 of the Housing (Decontrol) Ordinance, from 2002 to the year preceding the relevant subsequent year of assessment.
Provided that if the inflation index for a particular year has not been published before the date that a company submits its income tax return for a year of assessment the inflation index for that year shall be provisionally deemed to be the inflation index of the previous year and once the inflation index for the year in question is published the company may make a further return in accordance with article 13 of the Income Tax Management Act.
(3) Where in a relevant year of assessment the amount of profits which are taxed at a reduced rate of income tax in
B 1481

Amends regulation

41 of the principal regulations.

Adds new regulation 43 to the principal regulations.

Cap. 158.

Cap. 158.

Cap. 372.

B 1482
accordance with regulation 4 or 6 of these regulations is less than the applicable amount set out in sub-regulation (1) hereof as adjusted by>
a) sub-regulation (2) hereof< and
b) this sub-regulation in respect of the year of assessment preceding the relevant year of assessment, such shortfall shall be increased by the percentage referred to in the first proviso to regulation 5(12) of these regulations and such increased amount shall be added to the amount set out in sub-regulation (1) hereof as adjusted by sub-regulation (2) hereof for the year of assessment following the relevant year of assessment.
(4) The number of employees referred to in sub- regulation (1) hereof shall be the employees employed by the company, claiming the benefit provided by regulation 4 or 6 of these regulations, during the accounting period ending in the year preceding the relevant year of assessment and such number of employees shall be determined in accordance with the provisions of regulations 3(8) and 3(9) of these regulations.
(5) In this regulation “relevant year of assessment” means the year of assessment in respect of which the provisions of regulation 4 or 6 of this regulation are to be applied.
(6) Within the scope of the provisions of the third proviso to regulation 4(1) and the third proviso to regulation 6(1) of these regulations, the Minister hereby determines that the last year of assessment in respect of which the provisions of regulations
4 and 6 shall be applicable shall be year of assessment 2009.”

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