S.L. 123.83 Art. 12Calculation of the tax credit. Cap. 325.

(1) The tax credit due to a company for a year of assessment in connection with an approved project is calculated as follows:

(a) the amount of allowable expenditure falling within each category of expenditure listed in the definition of "qualifying expenditure" in rule 2 and incurred from the date of the commencement of the project period up to the end of the year immediately preceding that year of assessment is multiplied by the respective percentage as specified in the Schedule;

(b) the results obtained under paragraph (a) for the different categories of expenditure are added and the total is multiplied by the number of additional employees employed by the company from the date of the commencement of the project period up to the end of the year immediately preceding that year of assessment;

(c) the result obtained under paragraph (b) is then reduced by the amount of tax credit, if any, already claimed for previous years of assessment in connection with the project in question.

(2) Notwithstanding the provisions of sub-rule (1) the tax credit due to a company in respect of an approved project shall not exceed, in the aggregate -

(a) in the case of a small or medium sized enterprise, fifty percent of the total cost of the project in question and in conformity with Article 4 of Commission Regulation (EC) No 70/2001 on the application of Articles 87 and 88 of the EC Treaty to State Aid to small and medium-sized enterprises, as subsequently amended; and

(b) in the case of any other company, forty percent net grant equivalent of the total cost of the project in question:

Provided that where the company in question has benefited from any State aid in respect of expenditure incurred in the carrying out of the project, other than as provided for in this Part, the threshold referred to in paragraph (a) or (b), as the case may be, shall be reduced by the value of that aid:

Provided further that the correct calculation of the said ceiling and, where applicable, reduction, shall be the sole responsibility of the company.

(3) The tax credit shall be availed of by way of a deduction from the tax chargeable on gains or profits derived from back office operations, and shall not be allowable as a deduction from tax chargeable on gains or profits from any other source; and any amount of tax credit due for a year of assessment that is not so absorbed in that year may be carried forward and deducted from the tax chargeable on gains or profits derived from back office operations in subsequent years: Provided that any part of the tax credit that is not availed of up to the year of assessment 2013 shall not be carried forward and the right to a credit in respect thereof will lapse.

(4) Where, for a year of assessment, a company qualifies for a tax credit under the Business Promotion Act and also under the provisions of these rules, it shall avail itself of the tax credit under the Business Promotion Act before any set-off is made in respect of the tax credit due under these rules.

(5) A tax credit due in accordance with these rules shall not give rise to a right for any refund.