Film
Malta has opened its doors for the filming of some of the most renowned blockbusters and TV series recently produced in the film industry. Malta really has well and truly proved to film industry stakeholders that it not only has some great attractions and characteristics to offer but also that the professionals in the industry are up to the task of servicing a very demanding market. Boasting a rich and diverse 5,000 years of history, our warm Mediterranean island has the architecture, locations and environment for to suit a wide range of movie sets.
Apart from the locations and climate, there are also some very attractive financial incentives offered under Maltese legislation.
MALTA CASH REBATES
The Government of Malta has recently upgraded the cash rebates for filmmakers making the financial guidelines more attractive to the film industry.
Productions which satisfy a cultural test can benefit from a rebate of up to 25% of eligible expenditure with an additional 2% if the production boasts added local cultural values such as the featuring of Malta within the production. Qualifying productions are required to present a provisional application to the Malta Film Commission, including a detailed projection of the Malta budget for the production. The rebate is given once filming is complete and on receipt of the audit report. Upon final review by the Commissioner, the cash rebate is forwarded to the qualifying production not later than five months from the date of receipt of the presented production expenditure in Malta. Feature film, television film or television series or mini-series, animation, creative documentary, transmedia and cross-media productions are all eligible for the incentives, provided that the qualifying production is all or partially produced in Malta. Expenditure incurred during production in Malta which qualifies for a cash rebate, includes the following items: EU below-the-line labour (that is labour directly engaged on a production during its shooting in Malta and exclude salaries for producers, director, cast and stunts, including their travel and living expenses as well as miscellaneous ancillary associated costs over Euro 200,000), accommodation, transportation equipment and hire, location fees, catering services, per diems, leasing of offices, computer equipment, props, property, animals, equipment, vehicles, and boats. Other qualifying expenditure includes wardrobe rentals, courtesy payments, telecommunications, craft service, laundry and cleaning services and professional services. Fuel is not qualifying.
TAX CREDITS
Investment aid for audio-visual facilities is available under the Malta Enterprise Act. The aid is offered in the form of tax credits to a qualifying company in respect to an initial investment project in relation to qualifying expenditure.
Tax credits are computed as a percentage of either the value of capital investment or the value of wages for 24 months, covering new jobs created as a result of an investment project. Facilities for filming and audio-visual productions qualify for investment tax credits.
Qualifying enterprise must be engaged solely in eligible activities as established by the Incentive Guidelines which include:
- The production (through scriptwriting, casting, shooting, directing and editing) of audio-visual productions, which includes: feature films, television films, advertisements and documentaries;
- The operation and provision of facilities and equipment (such as film studios, audio-visual editing facilities and filming equipment) required in the production of feature films, television films, advertisements and documentaries;
- The operation of a sound studio; and
- The development of digital audio-visual media and digital games.
Undertakings engaged in broadcasting of audio-visual content to live audiences through any media channels and/or engaged in programming and broadcasting activities are not considered eligible.
The Government of Malta, under various other legislative provisions, also, offers filmmakers the possibility to produce and distribute audio-visual productions from Malta and pay the lowest corporate tax rates in the European Union, also by way of significant tax credits.
CO-PRODUCTION FUND
The Government of Malta allocates a significant budget for film co-productions. The main purpose of the fund is to encourage collaboration between Maltese and foreign companies to produce films and TV series for international distribution.
Malta Co-Production Fund
The main purpose of this fund is to encourage foreign filmmakers and producers to engage with Maltese counter-parts in order to produce feature film, television film or television series or mini-series, animation, creative documentary, transmedia and cross-media productions intended primarily for cinema release/broadcast and suitable for international distribution. The fund aims to grow and further develop the Maltese film industry as well as strengthen Maltese participation within the industry. It also boosts the country’s economy, since qualifying projects have to be filmed primarily in Malta and make use of Maltese talent. The purpose of supporting co-productions is to strengthen partnerships between Maltese and international producers and to develop skills in the Maltese film industry. The fund will also allow partner countries to share the risk and cost of screen production. Co-production arrangements offer both cultural and economic benefits to partner countries. Co-productions have the ability to engage new international audiences and enhance existing relationships between partner countries. Productions that have been approved as official co-productions are treated as ‘national’ productions in each partner country.
The total budget available under the Malta Co-Production Fund is €1 million per annum. The amount of the financial contribution to be awarded will be determined within the limits of the available budgetary resources and with regard to the cost and nature of each proposed action.
Funding through this Fund can be made available through the following methods:
- Loan Guarantee: A loan guarantee may be provided by the Fund to facilitate the access to local banks whereby local banks are more secure in providing loan facilities to allow local producers to contribute to their co-financing share needed to make the film and/or to provide economic support to cover expenditure for the production in Malta and therefore be able to participate in the co-production itself. The Malta Co-Production Fund will act as a loan guarantor and will provide the lending bank with a maximum amount of €200,000 to be utilised as a guarantee against the loan to be taken up by the beneficiary. The loan under guarantee is to be used wholly and exclusively for the film under guarantee. Once the loan is repaid by the beneficiary, this is returned to the Malta Co-Production Fund. This scheme will be subject to De Minimis Regulation and the amount of the guarantee shall be subject to any prior de minimis grants in the prior three years.
- Equity Finance: Equity financing will allow local producers to contribute to their co-financing share needed to make the film and/or to provide economic support to cover expenditure for the production in Malta. Local co-producers are expected to make an effective technical and creative (film-making) contribution in proportion to their financial contribution (this does not apply for ‘finance only’ contributions). Each co-production agreement sets a minimum and maximum financial contribution, and the country of the co-producer(s) making the largest financial contribution is deemed to be the majority country for that film. This scheme is compliant with Commission Regulation (EU) No 651/2014 of 17th June 2014 (Article 54 – Aid Schemes for Audio-visual Works). Equity Finance may amount up to €350,000.
CO-PRODUCTION TREATIES
Malta has been a member of the European Convention on Cinematographic Co-Production since September 2001. The aim of this Convention is to promote the development of European multilateral cinematographic co-production to safeguard creation and freedom of expression and defend the cultural diversity of the various European countries.
Malta has also signed a bilateral co-production treaty with Canada. Qualifying as a Maltese film under this treaty provides a number of advantages and productions are eligible to apply for funding and may therefore benefit from financial advantages under this treaty, including that of avoidance of double taxation.
VALUE ADDED TAX
Generally, Malta imposes a Value Added Tax charge of 18% on all goods and services supplied in Malta and on all taxable importations. The VAT rate for accommodation in hotels and licensed premises and the supply of alternative energy equipment stands at 7%.
Certain supplies are exempted [e.g. food and medicine]. On the majority of goods and services supplied, a VAT refund is given to the person/company acquiring the service or good – depending on the types of supplies carried out by that person/company.
Foreign film productions shooting in Malta can also claim refunds in the following cases:
- Input VAT incurred on property rental or hotel accommodation with respect to all those persons, foreign or otherwise, directly engaged in the production of a foreign film, TV series, animation, commercial or documentary;
- Input VAT incurred on fuel may be claimed back when consumed by vehicles, commercial or otherwise, used directly in connection with the production of a foreign film, TV series, animation, commercial or documentary;
- Input VAT on the cost of taxis and car hire relative to the film production – excluding however VAT on purchase of non-commercial motor vehicles;
- Input VAT on the cost of materials used for the purpose of the film production which would not be otherwise recoverable.
VAT refunds are generally affected within five months from the later of the expiration of the time allowed for furnishing the VAT return for the particular VAT period or from the day on which the said return is made.
IGAMING
The last decade has seen Malta emerge as one of the front-runners in the regulation of the online gaming industry.
The foresight and determination of the Maltese authorities to develop the iGaming industry, together with the Malta Gaming Authority’s (MGA) pro-active approach to the inevitable changes in the sector, have created a stable and attractive regulatory environment for this sector to flourish.
In 2004, Malta became the first EU Member State to enact comprehensive legislation on remote gaming. This set the solid foundations on which a decade old industry has flourished. Malta is considered by all the sector stakeholders to be a well-developed, tried-and-tested online gaming jurisdiction.
Advantages and incentives
The gaming regulatory framework developed by the Maltese authorities provides for several innovative incentives.
Foremost among these are the wide-ranging incentives available to employees and investors of remote gaming businesses, licensed by the MGA, that may include, subject to satisfying certain criteria, reduced rates of income tax on personal income, exemptions on income derived from patents, refunds on dividends and double taxation relief, apart from all the advantages linked to the free movement of goods and services within the EU.
Non-residents who opt to relocate to Malta are also eligible to benefit from some very attractive tax planning opportunities. These include the High Net Worth Individuals Scheme and the Global Residence Programme.
Other initiatives include a Continuation of Companies Regulations that further serves to enhance Malta’s appeal, as does a very favourable Participation Holding Exemption regime.
Albeit taxes levied on gaming activities vary depending on the class of gaming licence that is applicable, it is widely acknowledged that such rates are among the most competitive in the world. This combined with the various tax incentives place Malta at the forefront of the gaming industry.
Growth and Development
With a sound jurisdiction that steers clear of bureaucracy and that has a proven track record, the iGaming industry in Malta is continuing to build on its successful trajectory. The next three years will see the sector, as certain regulations are re-visited and new schemes intended to sustain the industry’s rapid growth are introduced.
The number of licensees operating under Maltese gaming legislation continues to increase as do the gaming operators setting up shop locally, benefitting from the advanced technical capability and relatively low labour costs of the local workforce.
The MGA, together with the various Maltese authorities, continues its mission to create the right environment for gaming operators to feel safe and protected. A consistent approach to regulation, together with the launch of Gaming Malta and the Gaming Academy, will ensure that Malta will continue to be considered by the gaming industry as a centre of excellence – both as a gaming jurisdiction as well as a dynamic economic hub for iGaming and ancillary services.
