S.L. 123.86 Art. 2Interpretation. Cap. 123.

In these rules, unless the context otherwise requires -

"the Act" means the Income Tax Act;

"base year" means the year during which the profit eligible to be reinvested has been earned and subsequently declared in the tax return for the relative year of assessment; "the Commissioner" means the Commissioner of Inland Revenue; "the Corporation" means the Malta Enterprise Corporation;

"eligible person" means a person resident in Malta deriving eligible profits that are reinvested in an eligible reinvestment project approved by the Corporation and conforming with the requirements of rule 3; "eligible profits" means income deriving from any activity carried out in Malta chargeable under the provisions of article 4(1)(a) of the Act and computed in accordance with the provisions of the Act, and set-aside for the exclusive purpose of financing an approved reinvestment project; "eligible reinvestment project" means a project approved by the Corporation under these rules, in respect of which qualifying expenditure has been incurred and which is retained within the business for at least two years or such other shorter period as the Corporation may deem appropriate in view of the nature of the project:

Provided that a project shall not be treated as an eligible reinvestment project if it is linked to -

(i) the production, processing or marketing of agricultural and fisheries products;

(ii) export-related activities;

(iii) activities contingent upon the use of domestic over imported goods; "qualifying expenditure" means expenditure of a capital nature exclusively financed by eligible profits, incurred as part of an eligible reinvestment project as approved by the Corporation in:

(a) acquiring an industrial building or structure;

(b) carrying out any extension or improvement to an existing industrial building or structure, including the cost of land forming an integral part of such extension;

(c) acquiring brand new or second-hand plant and machinery excluding:

(i) motor vehicles unless these are, to the satisfaction of the Corporation, specialised commercial vehicles that are essential to the implementation of the project; and

(ii) works of art, antiques, any assets whose use is wholly or mainly of a decorative nature and any assets whose cost is related to their intrinsic value rather than to their specific usefulness for a qualifying project;

(d) acquiring intellectual property rights that are essential to the implementation of the project;

(e) labour costs which may be capitalized as part of the cost of any of the assets, extensions or improvements referred to above: Provided that such expenditure is incurred on assets:

(a) which are first used in Malta; and

(b) in respect of which no income tax benefit or incentive has previously been obtained under any other legislation; "qualifying profits" means income deriving from the same activity in which eligible profits have been earned, computed in accordance with the provisions of the Act, that is relieved by a reinvestment tax credit.