Micro Invest Tax Credits

Everybody loves paying taxes… Why would work approximately 3 months every year just to pay taxes if this is not so?

Joking aside about the “Love” part, but I kid you not on the 3 months part! As when you work it, depending on how much you earn and your tax rates ( single , married , parent), you really do end up working an average 3 months of every year just to pay your income tax and social security!

The good news is that by investing in your business’s future and survival, you can hit two birds with one stone. You can grow and modernise your business whilst legally not paying any tax at all thanks to the Maltese Government and Malta Enterprises’ Micro Invest Tax Credit Incentive for SME businesses.

As apart from the normal tax deductions of any asset bought, with the Micro Invest Tax Credits you can also get an extra 45% deduction back in Tax Credits on your Investment (65% if business is operating from Gozo).

With a maximum of €50,000 in tax credits available to be claimed every three years ( €70,000 if female owned , a family business or operating from Gozo)

Think of tax credits as a “Credit Note”, but a special type that can be used against any Income Tax due to the Government from your business profits

So on what can I claim the Micro Invest Tax Credits?

- Furbishing, as well as re-furbishing of business premises
- Investment costs – such as equipment , machinery , technology and even website
- Commercial Motor Vehicle
- Wage Costs – need help, add a new team member and get 45% of the wage back

How does the Micro Invest Tax Credit work in a nutshell?

Imagine for a particular year you have to pay €3,000 in Income tax.

During the same year you also invest in equipment for your business worth €10,000 . All criteria etc is satisfied and you got a nice tax credit of €4,500 ( 45% of the €10,000) from Malta Enterprise after applying for this wonderful incentive the year after.

Therefore simply put:

Tax due on Net Profit last year: €3,000

Tax credit available (€4,500)

Remaining Tax Credit (€1,500)

That’s’ s right, any extra tax credit such as the remaining €1,500 above can used against any tax owed in the next two years (or next four years if you’re a start-up).

Reason being? The Government knows that many businesses might not have enough profits in that particular year. Especially start-ups, who are likely to make a big investment in the first year, and not have enough profits that particular year, or the year after to be taxed upon, as well as to use all the tax credits received… Though fear not, you’ve got a number of years after to use the tax credits applied for.

So especially if you’re a start-up you literally can end up saving a lot of tax due in the later years!

Instead, with those funds now staying in your business bank account, you can further grow your business and CASHFLOW. Plus sleep with that happy feeling and smile on your face of that almost all your 12 months profits will remain yours to re-invest in your business and your future!

Hurry up though….. the Micro Invest tax credits are only available till 2020!!

For the detailed specifics, you can access the Malta Enterprises guidance notes here:

https://www.maltaenterprise.com/support/micro-invest

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