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Malta

Government and institution measures in response to COVID-19.

Government and institution measures in response to COVID-19.

Return to homepage  |  Last updated: 24 June, 2020

General Information

The Maltese Government has announced several measures as part of a financial package to help the Maltese economy during the COVID-19 outbreak, mainly aimed at easing pressures on the liquidity of businesses, protecting jobs and helping the most vulnerable during this challenging period.

Following the initial measures, the focus of Government shifted on an Economic Recovery Plan (rolled out on 8th June 2020) aimed at reducing business costs, stimulating domestic consumption and directly supporting businesses.

Tax measures – Direct and Indirect

(e.g. payment deferrals, rate reductions…)

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Employment-related measures

(e.g. state compensation schemes, training…)

Wage Supplement March - June 2020

  • As from 9th March 2020, the Government will finance:
    • For those engaged in the hardest hit sectors:
      • €800 per month per full-time employee to businesses or self-employed that have been hardest hit by the COVID-19 outbreak (€500/month in the case of part-timers). Where the wage is in excess of €800 per month, the employers have to top up the pay. A minimum top-up of €400 per employee per month is required when the salary is in excess of €1,200, otherwise contact has to be made with the Department of Industrial and Employment Relations.

        The eligibility for the funding will be determined based on the NACE (Nomenclature of Economic Activities) codes of the business activity. The hardest hit sectors are those listed in Annex A on Malta Enterprise’s website and include wholesale, retail, accommodation, food and beverage service activities, vehicle rentals and leasing, employment activities, tour operators, travel agencies and other related enterprises, security and investigation services, services to buildings, transport companies, creative arts, entertainment activities and personal services (like barbers, beauticians, hairdressers). This list should cover all those hit by forced closure.
    • For those engaged in the less critically hit sectors:
      • A day’s salary per week equivalent to €160/month per full-time employee (€100/month in case of part-timers);
      • A 2 days’ salary per week equivalent to €320/month per full-time employee employed by Malta-based individuals or employed by Gozo based businesses €200/month in case of part-timers);
      • A 3 days’ salary per week equivalent to €480/month per full-time employee employed by a Gozo-based individual (€300/month in case of part-timers).

        The less critical sectors are parts of wholesale, manufacturing, retail, warehousing and information, as listed in Annex B published on Malta Enterprise’s website.
  • Employers who were constrained to lay off employees will be eligible for such payment if they re-engage the laid off employees.
  • The wage supplement has been approved by the European Commission on 24th April 2020.

Wage Supplement July -  September 2020

  • The wage supplement referred to above was extended until the end of September 2020 with the following changes:
    • For businesses dependent on tourism (such as tourist accommodation, travel agencies, English learning schools, event organisers and air transport) the wage supplement will remain the same until the end of September i.e. €800/month for full-time employees and €500/month for part-time employees;
    • Businesses dependent on local demand such as personal services will be moved from Annex A to Annex B and will thus see their wage supplement generally fall to €160/month per full-time employee and €100/month in case of part-timers (certain additional supplements may apply for individual employers and/or Gozo-based businesses), as from July 2020;
    • For all other businesses in Annex A not mentioned above, the wage supplement will fall to €600/month for full-time employees and €375 per month for part-time employees, as from July 2020;
    • The wage supplement will be extended to pensioners and full-time students who are also in employment.
  • Applications closed on 19th June 2020.

Quarantine Leve Supplement

  • €350 grant is being awarded to employers for each employee required to be on mandatory quarantine leave. Applications are open.

Unemployment Benefit

  • Workers who lost their job with effect from 9 March 2020 were entitled to a new temporary benefit of €800 per month (€500 per month for part-timers). Payments cease on 3rd July.

Benefit to persons with disabilities

  • Persons with disabilities who had to stay at home due to health concerns that arose as a consequence of COVID-19 and could not telework were entitled to a benefit of €800 per month for a specified period (€500 per month for part-timers). Applications closed.

Parent benefit

  • A benefit of €800 per month (€500 in case of part-timers) to one of the parents (including single parents) who took additional unpaid leave to take care of children whilst schools remain closed, when both parents work in the private sector. Applications closed.

Medical benefit

  • A benefit of €800 per month (€500 in case of part-timers) to persons employed in the private sector, who after 27th March 2020 had been ordered by the Superintendent of Public Health not to leave their home, were not able to work from home and were not being paid by their employer during their absence from work. Applications closed.

Teleworking grant

  • Employers who invested in a teleworking set-up benefitted from a cash grant of up to €4000, capped at €500 per teleworking agreement, awarded against 45% of the eligible cost. Applications closed on 8th May and covered costs incurred between the 1st and the 30th of March 2020.

Rent subsidies

  • Rent subsidies or increased rent subsidies to employees who lose their job and have rent to pay.
  • Rent Subsidy Regulations published on 8th May 2020, provide for subsidy assistance to eligible undertakings requiring support to rent industrial space for developing a business activity. The aid shall not exceed €25,000 per annum and shall cover up to 50% of the cost  of the rental. More detailed Guidelines still need to be published. The deadline for submission of applications for assistance is 31 December 2022.

Other measures aimed at Third Country Nationals

  • Enterprises which terminate the employment of an employee will be denied the possibility to offer such employment to a Third Country National.
  • Work permit applications in relation to new Third Country Nationals are currently not being accepted.
  • Assistance will be provided to Third Country Nationals to find alternative employment in case of job termination.
  • Jobsplus will be helping to find alternative employment to those who lose their jobs and to employers seeking recruits

Start-ups: All the aforementioned measures apply to start-ups as well.

Voluntary Organisations Emergency Fund

  • An emergency fund for voluntary organisation has been launched to provide assistance to assist registered and compliant Voluntary Organisations by providing financial support in case they are facing difficulties. The Fund is aimed at  VOs whose operations are related to, and essential for, the COVID-19 pandemic. The Fund’s budget currently amounts to €125,000 and every voluntary organization may be given a sum of up to €5,000. Applications for funding close on 31 July 2020.

Free e-learning to the tourism workforce

  • Whilst tourism was on hold, an e-learning platform was launched which offers free online courses to individuals working in the tourism sector. The aim is that of making the best use of employee and employer resources in these challenging times and empower the workforce to come back stronger and better after the COVID-19 pandemic. The courses are financed by Malta Tourism Authority and cover a variety of skills and occupational level. The scheme is a one-year project.

Assistance to Gozo-based enterprises:

  • MICE in Gozo Scheme 2020: The aim of the measures is to assist the voluntary and private business sectors which undertake projects to restore and upgrade venues with the capacity to host MICE events in Gozo. Beneficiaries can benefit from a reimbursement of up to 50% of the works and expenses incurred, capped at €50,000 for year 2020 in case of NGOs and at €25,000 for year 2020 in case of private businesses.
  • Gozo Back Office Employment Refund Scheme: Eligible employers can benefit from a partial refund of the salary cost of employees carrying out back office operations in Gozo, up to a maximum of €8,700 per employee, spread over 3 years, capped at €35,000 a year. The rate of reimbursement is calculated according to the wage bracket in which the employee’s wage falls
  • Gozo Business Relocation Scheme: A partial reimbursement of costs of or grants for partly/fully relocate/establish business in Gozo.
  • Gozo Teleworking Scheme: The aim of the measure is to encourage Malta-based businesses to offer teleworking facilities to Gozitan resident employees, thereby reducing their commuting time to Malta. Employers offering such teleworking facilities may be eligible to receive (i) a partial refund of 75% of the purchase cost of teleworking equipment up to a maximum of €850 per employee; (ii) a partial refund of the salary cost, up to €10,000, based on the number of hours that the employee teleworks, spread over 3 years i.e. a maximum of €3,000 in each of the first two years and a maximum of €4,000 in the third year.

Economic stimulus measures

(e.g. loans, moratorium on debt repayments…)

Malta Development Bank ‘COVID-19 Guarantee Scheme

Through the Malta Development Bank, the Government is guaranteeing loans granted by commercial banks in Malta to meet new working capital requirements of businesses facing cashflow disruptions due to the COVID-19 pandemic. The Scheme has been approved by the European Commission under the Temporary Framework for State aid measures to support the economy. The Scheme will enable commercial banks, accredited by the MDB, to leverage the €350 million guarantee fund into €777.8 million in new working capital loans.

  • The maximum individual loan amounts is €2 million for SMEs and €5 million for large enterprises. Higher amounts require the prior ad-hoc approval of MDB and are to be capped at €4 million for SMEs and €8 million for large enterprises. However, in all cases, the loan amount shall not exceed double the annual wage bill of the beneficiary or 25% of total turnover of the beneficiary in 2019. Amounts higher than these limits are subject to appropriate justification and self-certification, to cover the liquidity needs of SMEs for the coming 18 months and of large enterprises for the coming 12 months since the launch of the scheme.
  • Commercial banks would need to give an interest rate reduction to beneficiaries of at least one percentage point on the average lending rate as compared to similar facilities prior to the introduction of the guarantee scheme.
  • The term of the loans is between 18 and 48 months. The term can increase to 72 months, subject to additional terms and conditions.
  • A moratorium on both interest and capital repayments is given for a minimum period of 6 months with the possibility to extend to one year on a case-by-case basis. 
  • Eligible costs under these loans mainly include, but are not limited to, salaries, leases, utilities, working capital creditor balances, creditor balances for investment expenditure contracted for before the approval of the Scheme, acquisition of material and stock, maintenance costs and expenses directly related to contracts which were cancelled or postponed because of the COVID-19 outbreak excluding penalties and other liabilities incurred due to non-performance of contracts. The Scheme shall not cover restructuring or rescheduling of existing facilities. 

Interest rate subsidy of up to 2.5% on bank loans

Government is providing an interest rate subsidy of up to 2.5% on bank loans. The subsidy is subject to the payment of a minimum rate of 0.1%. The subsidy is aimed at supporting businesses to keep operating during COVID times and eventually recover. It is not aimed at financing investments like the purchase of property but is aimed at supporting businesses to keep operating during COVID times and eventually recover. Businesses wishing to avail themselves of the subsidized facilities should contact any of the participating banks. Applications close in June 2020 and are subject to the eligibility criteria of the banks.

Six month moratorium on facilities sanctioned prior to 1st March 2020

Credit and financial institutions licensed by the Malta Financial Services Authority have been directed to offer a six-month moratorium on repayment of capital and interest ‘to support economically vulnerable persons who have been materially affected by the COVID-19 outbreak’. The moratorium applies to credit facilities sanctioned prior to 1 March 2020 - whether to individuals, households or businesses - and who can show that they have been negatively affected by the pandemic. Applications by borrowers are to be made with their respective credit or financial institution until 30 June 2020. The borrower will need to apply to the respective credit or financial institution. The moratorium comes into effect once the application has been approved. Credit and financial institutions have the right to refuse the application as long as this is done within the terms of the Directive issued by the Central Bank of Malta. Borrowers who have been in arrears prior to 1 March 2020 are not eligible for the moratorium. Borrowers can apply to forego payments of both capital and interest completely for six months, and can also opt to continue to pay the interest but not the capital.

Start-ups

Same as above. 3-month moratorium can be requested from banks in relation to both personal and business loans

Measures announced on 8th June 2020 as part of the Economy Recovery Plan

Rent subsidies: Businesses classified as Annex A and Annex B on Malta Enterprise’s website will receive a one-time grant of up to €2,500.

Utility bill subsidies: Certain businesses will receive a refund of 50% of their electricity bills for the months of July, August and September, capped at €1,500.

Fuel price cut: Fuel prices to be reduced by 7c per litre to €1.34 per litre of petrol and €1.21 per litre of diesel (although such measure is not limited to businesses).

Refund of commercial licences paid to the Commerce Department and the Malta Tourism Authority to be paid to businesses.

Logistics costs refund: A temporary refund of 33% of port charges for vessels which import goods to Malta and 10% of container discharge fees, excluding transhipment. €200,000.

Vouchers: €100 vouchers, expiring by the end of September 2020, will be sent to each person aged 16 years and over to be spent locally to the extent of 80% on accommodation, restaurant and bar services and 20% in outlets that have reopened following a period of forced closure.

Wedding expenses refund: Couples who had to postpone their wedding due to the disruptions caused by COVID-19 will get reimbursed for their forfeited deposits up to a maximum of €2,000.

Increase in in-work benefits for eligible beneficiaries and a one-time grant of €250 will be given to beneficiary families.

Real estate :

  • First-time buyers: Persons who did not qualify as first-time buyers due to them being part-owners in property or owners of a garage are now be able to qualify for the first-time buyers incentive.
  • Tax/duty cuts: Income tax on the sale of property will be reduced from 8% to 5% and stamp duty will be levied at 1.5% instead of 5% for the first €400k on contracts published by the end of March 2021.
  • Such measures complement the Home Deposit Scheme launched on 3rd June 2020. Through this scheme, government will be offering interest-free loans repayable over 25 years, to eligible first-time buyers, aged less than 40, to finance the 10% deposit payable upon signing a promise of sale agreement. The property value must not exceed €175,000.

Bond underwriting facility:

Through the Malta Development Bank, Government will act as underwriter for bonds issued by private companies which are due for roll over.

Cash grants in lieu of MicroInvest tax credits:

30% of approved MicroInvest tax credits can be converted into a cash grant, capped at €2,000 for enterprises operating in Malta and at €2,500 for female-run or Gozo-based enterprises.

Business re-engineering:

€5,000 financing for businesses to use on advisory services aimed at identifying new ways of operating such as through the use of innovative technology.

Guarantee scheme:

Government is in discussions with the EU to introduce a guarantee scheme through the Malta Development Bank in addition to the current COVID-19 Guarantee Scheme and the Interest Rate Subsidy Scheme.

Assistance to homes for the elderly:

€2 million allocated for certain homes for the elderly in recognition of their valuable work during the COVID-19 pandemic.

Skills Development Scheme:

Companies employing less than 50 employees may benefit from skills development training schemes.

Assistance for digital campaigns:

Grants of up to €10,000 to companies undertaking digital campaigns in new foreign markets.

Reimbursement of international fair costs:

A maximum of 80% reimbursement of costs incurred for the participation in international fairs that have been cancelled due to the pandemic.

Export credit guarantee:

Companies which seek to export their products to new markets will benefit from an export credit guarantee scheme to be launched in collaboration with the Malta Development Bank and Malta Enterprise. 

Promotion assistance:

 €5 million investment in a new platform for local businesses to help them promote their products.

Modernising the construction industry:

Construction enterprises which undertake investment to modernize equipment which is environmentally friendly may benefit from a grant of up to €200,000.

Customs Measures

Electronic processing of Customs formalities

  • A number of processes started being carried out electronically including:
    • Uploading and accessing all documents related to imports in the National Import and Export Systems as from 23rd March 2020. Prior to COVID-19, such system was planned to be implemented in Q3 of 2020. This measure applies both for the case of full load containers as well as groupage consignments transported by sea;
    • The processing of transit documents (T1), inward and outward applications, end-use and temporary admission (TA) and other procedures related with export consignments (by email to specialprocedures.customs@gov.mt.) as from 23rd March 2020.
    • Freeport terminal gate passes will be processed electronically (applications at gatepass.customs@gov.mt). (Effective from 23rd March 2020, mandatory from 1st April 2020)
    • Authorization of Fuel Stores for vessels will be made electronically

Deferral of excise duty payments due in April and May

  • On 14th April 2020, the Maltese Customs Department announced that excise duty payments for commodities that are due in April/May 2020 will be deferred by two months. On 21st April, such announcement has been enacted through Legal Notice 147. The LN provides that excise duty on excise goods and services payable during the months of April and May 2020 according to the Excise Duty Act is payable 60 days later than the due date, but not later than 28th June and 26th July 2020 respectively.

Relief from VAT and import duties on the importation of medical supplies to combat COVID-19

  • On 3rd April 2020, the EU Commission decided for the authorization of EU Member States to grant relief from import duties and VAT exemption on importation for goods needed to combat the effects of the COVID-19 outbreak during 2020. Such relief applies in Malta from 30 January until 31 July 2020 and could be extended should the need arises.  The organisations which are eligible include State organisations, charitable or philanthropic organisations and imports done on behalf of these organisations.
  • Commercial importations of protective face masks and visors are subject to a reduced rate of VAT of 5% as from 4th May 2020.

Other measures and sources

COVID-19 R&D Fund

  • Further to the approval by the European Commission of Malta’s €5.3million R&D scheme, on 23rd April the Malta Council for Science and Technology (MCAST) launched the ‘COVID-19 R&D Fund’. The Fund is a mechanism through which cash grants will be given to eligible applicants, i.e. public, academic and private entities, undertaking R&D projects with outcomes addressing innovative and/or improved approaches with regards to current and/or future infectious disease prevention, control and contain the spread and other antiviral relevant research.
  • The R&D project proposals should be novel and not correspond with ongoing or completed projects funded by other instruments, programs or projects.
  • Eligible projects, including those projects having received a COVID-19 specific Seal of Excellence under the Horizon 2020 SME-instrument, are those projects that have started on or after 1 February 2020, but not later than 31 December 2020. The duration of the project should be a maximum of 18 months.
  • Successful proposals will see Maltese entities entering into a Grant Agreement with MCST and Malta Enterprise, the administrators of this incentive.
  • The Fund shall operate as an open call. Successful applications will be implemented as projects and will be awarded until all amounts in the Fund have been exhausted, or the duration of the incentive has elapsed, whichever is sooner.
  • Applications are open. The deadline for submission is 30th November 2020.

Investment Aid for COVID Products

  • The aid supports undertakings to carry out investment projects to increase or initiate production of COVID-19 relevant products or to diversify existing production to be able to produce such products. The aid is mainly in the form of cash grant not exceeding 80% of the eligible costs related to COVID-19 related products that are completed within 6 months from the start of works.

Main sources of information

Measures to ease lockdown

Despite relaxing the COVID-19 restrictions, the implementation of health risks mitigation measures, mainly related to hygiene and physical distance practices remains recommended.

As from 4th May:

  • Retail outlets and lotto booths were allowed to open, with conditions.
  • The order that prohibited non-essential travel between Malta and Gozo has been revoked.

As from 22nd May:

  • More establishments were allowed to open, subject to the implementation of establishment / sector-specific health risks mitigation measures. The businesses that reopened were hairdressers and barbers, beauticians, nail technicians and nail artists, drive-in cinemas, outdoor cinemas and outdoor theatres, tourism-related establishments i.e. catering establishments (including cafeterias and snack bars), accommodation establishments, outdoor establishments including lidos, swimming pools and outside entertainment, beach establishments and beach concessions, and open-air markets.
  • In the sports sector, individual non-contact sports and outdoor training for other sports was permitted provided that the group of persons was restricted to a maximum of six.

As from 5th June:

  • The following establishments were allowed to open - gyms, spas, indoor pools, vaping shops, tattooists, bars (which do not qualify as catering establishments), museums, clubs, discotheques, night clubs, massage parlours, gaming premises including controlled gaming premises, bingo halls, casinos, gaming parlours and betting shops.
  • Childcare centres and English Language Teaching institutions also reopened.
  • Organised events were no longer suspended such as cultural, recreational, entertainment, sporting and religious events, outdoor sport training and exhibitions in public or private places.
  • Gathering of masses in organised events was allowed for up to 75 persons.
  • Certain mitigation measures for establishments were relaxed.

As from 30th June:

  • Schools, colleges and tertiary educational institutions are allowed to open.
  • Contact sports can be practiced.
  • There is no limit on the amount of persons in organised events.

As from 1st July:

  • The travel ban is lifted. The airport will open for passengers travelling to/from 22 countries [Austria, Cyprus, Czech Republic, Denmark, Estonia, Finland, Hungary, Iceland, Ireland, Germany, Latvia, Lithuania, Luxembourg, Norway, Italy (with  the  exception  of  Emilia  Romagna, Lombardy and Piemonte), France (with the exception of Ile-de-France), Slovakia, Switzerland, Greece, Croatia, Spain (with  the  exception  of  Madrid,  Catalonia, Castilla-La Mancha, Castile and Leon) and Poland]. Other countries may be added in due course.

Contact us

Tax: Andre Zarb – andrezarb@kpmg.com.mt
COVID-related - Doreen Fenech – doreenfenech@kpmg.com.mt
Restructuring: David Caruana – davidcaruana@kpmg.com.mt
Legal: Juanita Brockdorff – juanitabrockdorff@kpmg.com.mt