S.L. 463.4 Art. 17Tax credits for qualifying certifications.

(1) Where the Corporation is satisfied that an undertaking carrying on or intending to carry out an activity that may contribute to the economic development of Malta requires assistance to achieve qualifying certifications awarded by a certifying body to improve processes, products or services or to achieve growth in international markets, the Corporation may provide such an undertaking with a tax credit: Provided that for the purposes of this regulation, a ''qualifying certification'' and a ''certifying body'' shall have the meaning attributed to them in the Guidelines.

(2) The total amount of tax credits that may be granted in terms of this regulation shall not exceed fifty per cent (50%) of the eligible costs as may be prescribed in the Guidelines and as incurred and paid for as from the 1st March 2015 till the 31st December 2017: Provided that for applications received by the Corporation on st or after 1 January 2017, the total amount of tax credits that may be granted in terms of this regulation shall not exceed seventy-five per cent (75%) of the eligible costs as may be prescribed in the Guidelines and as incurred and paid for as from the 1st March 2015 till the 31st December 2017:

Provided further that the total amount of tax credits that may be granted in terms of this regulation may not exceed the amount of twenty-five thousand euro (€25,000).

(3) The tax credit referred to in this regulation shall be due as a deduction from tax payable by an undertaking on its chargeable income derived from its trade or business for that year of assessment commencing on the 1st January of the year immediately following the year in which the eligible costs are incurred, and where the tax credit, for that year of assessment, exceeds the income tax payable by such an undertaking for that year, the excess in tax credit shall be allowed to be carried forward to the subsequent year of assessment and deemed to be a tax credit for that year:

Provided that unutilised tax credits can only be availed of from the first year of assessment following the date of the Incentive Entitlement Certificate issued by the Corporation and any unutilised tax credit can only be carried forward to the next two years of assessment:

Provided also that ''Incentive Entitlement Certificate'' means an Incentive Entitlement Certificate as defined in the Act:

Provided further that a tax credit shall not give rise to a right to a refund of tax.

(4) Where an undertaking has benefited from the provisions of this regulation, the tax credit shall be deemed to have relieved from tax so much of that undertaking’s chargeable income which, when multiplied by the rates of tax which it was chargeable in that year, is equal to the tax credit on the investment; and where such undertaking or any subsequent company distributes the income which is so deemed to have been relieved from tax such undertaking or undertakings shall state in the dividend warrant pertaining to any such distribution that such income has been relieved from tax by a tax credit in accordance with this regulation; and the tax which has so been relieved shall not be available for refund for any purpose of the Income Tax Act.

(5) (a) The chargeable income which is deemed to have been relieved from tax in accordance with sub-regulation (4) shall, for the purposes of the Income Tax Act, be allocated to the Final Taxed Account of the company in question and any dividends, or part thereof, distributed from such income shall be exempted from income tax in the hands of the members of the company on receipt of such distribution.

(b) Where a dividend referred to in paragraph (a) is distributed to a member which is also a company, in this sub-regulation referred to as ''the second company'', the said dividend shall likewise be distributed by the second company to its members in the form of dividends exempt from income tax in the hands of the recipients, and where a member of the second company is again a company, the preceding provisions shall apply mutatis mutandis as though references to the first company were references to the second company, and as though references therein to the second company were references to that member, and the principle set out in this sub-regulation shall continue to be applied for as long as such income or part thereof to which this regulation applies are distributed by way of dividends.

(6) Applications for assistance under this regulation shall reach the Corporation by not later than ten in the morning central European time of the 31st December 2017.