Deferral of payment of taxes
The COVID-19 Tax Deferral Scheme will be extended until the end of August 2020. The payments for deferred taxes will be spread over a 12-month period. As of 1 July 2020, the tax deferral scheme will no longer apply with respect to Final Settlement System and Social Security Contribution payments.
Managing Authority: Department of Social Security
Who applies: Employer
The Office of the CfR has updated the guidelines concerning the deferral of certain taxes, one of the measures announced in March 2020 to assist businesses that suffered a significant downturn in their turnover as a result of the economic constraints arising from the coronavirus pandemic. The guidelines clarify that the measure applies to eligible taxes which fell due in March up to and including June 2020.
The eligible taxes are:
- Provisional tax, social security contributions of self-employed persons and Value Added Tax which fall due in March up to and including August 2020;
- Employee taxes, maternity fund payments and social security contributions which fall due in March up to and including June 2020.
The taxes due are to be settled by 31 May 2021.
Fiscal Assistance – Postponement of Payment of Certain Taxes (Updated 25th May 2020)
As outlined in the Press Release issued by the Ministry for Finance and Financial Services https://www.gov.mt/en/Government/DOI/Press%20Releases/Pages/2020/April/29/pr200787.aspx, the Tax Deferral Scheme has been extended. The deadline for the submission of application form is 15th May 2020.
- A deferral to enterprises, including the self-employed, to pay Provisional Tax, VAT and National Insurance Contribution on salaries.
- This will apply for taxes owed up to and including June 2020. All tax forms should be submitted according to normal deadlines. The incentive is primarily aimed, but not limited to, the tourism and hospitality, entertainment, transport, and manufacturing sectors. Enterprises will still collect National Insurance on their employees’ wages, but will keep these dues for the duration of the deferral. Without prejudice to the right of each enterprise to prove a “significant downturn in turnover” in its specific circumstances, a drop of circa 25% or more in sales registered would certainly satisfy this condition.
This would be ascertained on the basis of a 3 month period in which March would be either the first or the second month, i.e. either from February to April or else from March to May 2020 as compared with the same period of 2019. This would in part be based on estimates but as long as such estimates are drawn up in a reasonable manner then they should suffice.
Enterprises claiming this benefit should keep records of these estimates.
Companies and self-employed persons which have failed to comply with their tax obligations (submission of documents / returns and payments) falling due by the 31st December 2019 and who opted to pay VAT under the Mini One Stop Shop (MOSS) are specifically excluded.
Application Form: https://covid19.maltaenterprise.com/deferral-of-payment-of-taxes/
More information can be obtained from the Commissioner for Revenue website: https://cfr.gov.mt/en/News/Pages/2020/Fiscal-Assistance-Postponement-of-Payment-of-Certain-Taxes.aspx