S.L. 325.6 Art. 13Incentives for job creation.

(1) Where the Corporation is satisfied that an enterprise has created a full-time job for a qualifying individual, the

Corporation shall issue a certificate confirming that the said enterprise has created such job and is accordingly entitled to the benefits of this regulation.

(2) An enterprise shall be considered as having created a job for the purpose of sub-regulation (1) when it employs a qualifying individual for a period of at least three years and where such employment is not in replacement of that of another individual whose employment was terminated by the enterprise; provided that in the case of a qualifying individual qualifying as such in terms of sub-regulation (13)(c), a job shall be considered as being created if the previous employer of the qualifying individual confirms in writing that the post vacated by the said individual need not be replaced.

(3) The onus of proof that the employment of a qualifying individual is not in replacement of that of another individual whose employment was terminated by the enterprise shall lie with the enterprise.

(4) Where an enterprise may be entitled to benefit from the provisions of this regulation in respect of the employment of a qualifying individual and in the six months immediately preceding the date on which it has employed that qualifying individual, the employment of another individual was terminated, whether or not such employment was terminated by the enterprise, the enterprise shall provide proof to the Corporation that the employment of the qualifying individual is not in replacement of the employment of any such other individual or that such other individual terminated his employment voluntarily.

(5) For the purpose of determining whether a qualifying individual has been employed by an enterprise for the required three year period referred to in sub-regulation (2), it shall be deemed that the date of commencement of employment of an individual who has been employed by that enterprise in replacement of another individual, whose employment was terminated by the enterprise as a consequence of that individual’s gross misconduct or who terminated his employment with the enterprise voluntarily, shall be the date of commencement of employment of the individual whose employment was replaced; and it shall be incumbent on the enterprise to prove to the satisfaction of the Corporation that the individual so employed was in replacement of the individual whose employment was terminated as described in this sub-regulation.

(6) The benefits which an enterprise shall be entitled to under the provisions of this regulation are the following:

(a) when the individual is a qualifying individual in terms of sub-regulation (13)(a) or (b), the enterprise shall, in computing its total income for the purposes of the

Income Tax Act, in respect of a year of assessment, be entitled to deduct, in addition to the deductions allowed by the provisions of that Act, an additional 65% of the wage cost of such a qualifying individual incurred by the enterprise in the year preceding the year of assessment in question: Provided that this additional deduction shall be due only in respect of the wage cost incurred in respect of the first twelve months of the qualifying individual’s employment and if, before the expiration of sixty days from the date on which the said qualifying individual was employed, the enterprise submits to the Corporation details of a training programme which the qualifying individual is to undergo and such programme meets the approval of the Corporation, the additional deduction shall be increased to 100%;

(b) when the individual is a qualifying individual in terms of sub-regulation (13)(c), the enterprise shall, in computing its total income for the purpose of the Income Tax Act, in respect of a year of assessment, be entitled to deduct, in addition to the deductions allowed by the provisions of that Act, an additional 150% of the wage cost of such qualifying individual incurred by the enterprise in the year preceding the year of assessment in question: Provided that this additional deduction shall be due only in respect of the wage cost incurred in respect of the first twenty-four months of the qualifying individual’s employment and if, before the expiration of sixty days from the date on which the said qualifying individual was employed, the enterprise submits details of a training programme which the qualifying individual is to undergo and such programme meets the approval of the Corporation, the additional deduction shall be increased to 200%.

(7) For the purposes of sub-regulation (6) -

(a) when the individual is a qualifying individual in terms of sub-regulation (13)(a), the wage cost in respect of which the additional deduction is due shall not exceed 125% of an amount established by the Corporation in respect of that individual;

(b) when the individual is a qualifying individual in terms of sub-regulation (13)(b), the wage cost in respect of which the additional deduction is due shall not exceed 125% of the wage cost pertaining to such individual’s main employment during the last twelve months prior to the commencement of his employment with the enterprise claiming the said additional deduction;

(c) when the individual is a qualifying individual in terms of sub-regulation (13)(c), the wage cost in respect of which the additional deduction is due shall not exceed 125% of the wage cost pertaining to such individual’s main employment during the last twenty-four months prior to the commencement of his employment with the enterprise claiming the said additional deduction: Provided that, for the purposes of paragraphs (b) and (c), the wage cost in respect of which the additional deduction is due shall exclude any terminal benefits, benefits in respect of untaken leave, bonuses or any other payments which are not part of the basic emoluments payable to the qualifying individual.

(8) For the purposes of this regulation "wage cost" shall mean the aggregate of the gross basic emoluments paid to a qualifying individual and the employer’s share of the social security contributions payable in respect of those gross emoluments.

(9) An enterprise may, by application to the Corporation and in lieu of claiming a deduction in terms of sub-regulation (6)(b), opt to be given a cash grant to be calculated by multiplying 70% of the additional deduction referred to in that sub-regulation by the rates or rate of tax at which the enterprise was taxable in the year of assessment in respect of which it became entitled to such additional deduction if the qualifying individual has been employed for the required three year period referred to in sub-regulation (2).

(10) Where an enterprise creates a job for a qualifying individual who is registered as a disabled person with Jobsplus in accordance with regulation 3 of the Persons with Disability (Registration and Appeal) Regulations, the entitlement to an additional deduction shall in all cases be of 200%.

(11) The benefits provided by this regulation shall only be due to an enterprise on proof being shown that the qualifying individual has been employed for the required three year period. During the said three year period the collection of income tax which, but for the provisions of this regulation, would be payable by an enterprise shall be kept in abeyance and shall become due and payable only if the employment of the qualifying individual is terminated before the expiration of three years from the date of his employment, and in any such case the tax shall be due and payable within sixty days from the date of such termination of employment.

(12) For the purpose of this regulation, an "enterprise" shall include the person who has claimed a deduction in accordance with the provisions of this regulation, persons which control or beneficially own, directly or indirectly, more than fifty per cent of such person, and persons which are controlled or beneficially owned, directly or indirectly, to the extent of more than fifty per cent by such person.

(13) For the purposes of this regulation, a ‘qualifying individual’ shall mean an individual who either -

(a) has been registered as unemployed for -

(i) a minimum of one year prior to his employment with the enterprise, in the case of an individual who is either over forty years of age or is an individual to whom sub-regulation (10) is applicable; or

(ii) a minimum of two years prior to his employment with the enterprise in the case of any other individual;

(b) is identified by the Employment Re-structuring Unit within the Ministry for Economic Services as being an individual who may become redundant as a consequence of a restructuring programme undertaken by the enterprise with which he is employed; or

(c) is employed with a public sector related entity and occupies a position as may be prescribed and, or identified by the Minister by notice in the Gazette.

(14) Subject to the approval of the Corporation, the provisions of this regulation shall also be applicable where an enterprise engages an individual who is a qualifying individual in terms of sub-regulation (13)(c) under a secondment arrangement between the enterprise and the employer of such individual, and in granting its approval the Corporation may impose such conditions as it may deem fit.