FAQ - MALTA CASH REBATE
Last update 19 December 2023
1. The 40% cash rebate including foreign hires (equipment and crew) seems too good to be true. Is it?
It is all very real and happening. Indeed Malta might be the only country in the world with such generous incentives and it might not last for long for sustainability reasons, especially with government now trying to reign in expenses. However meanwhile there is no catch and the government is honoring each and every payout provided the rules are abided to. Note equipment is eligible only if hired from the EU/EEA/UK.
2. How soon is the cash rebate delivered?
There is a target deadline of five months once the proper accounts are delivered. Sometimes the amount of productions hitting the island's shores can be a little overwhelming for the government-appointed auditors. However the pool of auditors has been increased and the majority of productions receive the rebate within five months, more or less. It is worth nothing however that lately, there are recorded delays for some productions, some which exceeded a year.
3. Is there a ceiling on the rebate?
No but the rebate on ATL costs cannot exceed 5 million Euros. However this capped amount of ATL salaries cannot be higher than 30% of the total eligible spend.
4. How sure is the rebate? Can it not be honoured for any reason beyond the production's control?
It is guaranteed by the government so as long as you have a provisional certificate and you abide by all the accounting rules. Despite politics playing a big part in the majority of lives of the Maltese, the country itself is politically stable and there are no signs of economic turmoil or 'bankruptcy'.
5. Is there an expiry date for the current incentives?
Yes, they are valid until end of 2023 after which they will be revised / extended. The new rebate starting from 2024 is expected to be very much the same as the current one, with the exception of some tweaks which 'might' affect high budget productions. When the new official and legal rebate document is released and published, its contents will be updated on this page.
6. Can I double dip?
No double dipping of state aid is allowed if within the EU. If you are receiving regional funding, then there can be a case where this does not constitute double-dipping.
7. Do I need a local service company to apply for the rebate?
Yes. Unless you are a local qualifying company. As a foreign company, it is wise to entrust a local service company to facilitate your needs.
8. How easy is it to apply?
You must apply at least 30 working days before the start of shooting. There is also a cultural test required. When the PCP prepares applications the process usually takes a full week but only provided all supporting documentation is immediately available. We advise you start preparing at least 3 weeks before the application deadline, especially if the PCP needs to separate or refine your Malta budget.
9. The rebate is "up to" 40%. How is the 40% rate achieved?
The base is 30%. If your story portrays Malta as Malta OR you use local facilities such as using the Malta Film Studios or other service providers, you will raise your rebate to 35%. If you maximize local resources such as hiring local crew so that the majority of your crew is not all foreign (unless there are availability issues) then you will achieve the 40% rate. In practice all productions try to maximize local resources and local facilities as it helps their budget, and therefore 40% is an easy rate to achieve.
10. Can I get a post rebate without shooting there?
Animation and VFX can participate in the rebate even if shooting does not take place in Malta as long as all works are taking place in Malta in conjunction with a local and recognized studio.
11. How does the advance grant work?
When you start to shoot you may present accounts along with supporting documents as per guidelines and a top sheet after which 10 percent of the rebate can be processed. Depending on how organized your accounts are you could receive this rebate within four weeks if the official current guidelines prevail.
12. How far can the budget change after the rebate certificate is provided?
A variance of 10% is acceptable. Anything over this contingency will require the approval of the MFC.
13. What obligations do we have besides adhering to the correct accounting regulations?
You will be required to hire at least five trainees, to give the MFC right of first refusal to receive hero props and/or hero costumes for its future promotional events, and you and your director and/or lead actors will be required to submit to brief interviews about the Malta experience. The MFC will not release any materials before your production is released, unless you approve otherwise.
14. Is there any taxes involved as a cost to the production?
The 18% VAT is not a cost and is refundable, although its good to note the turnaround can easily take nine months from the time of expenditure.
Any taxes applicable for crew would be strictly according to Double Taxation Agreements applicable, usually only if they are resident in Malta for over six months and in this case there is a favourable tax rate offered of 15%. All such taxes can usually be off-set in the national's home country.
All foreign performers in front of the camera (actors and stunts) must pay 10% regardless of if they are in Malta for under or over six months. These taxes usually qualify for double taxation agreements where the tax is offset by the taxpayer in his/her home country, if such an agreement exists with Malta. For periods longer than six months there can be Social Security Contributions (another form of 'tax') unless proof is provided that the respective crew member is already paying such in his/her home country. However one should check Double Taxation Agreements with Malta as the criteria is ultimately dependent on these agreements.
Local extras must be paid with a 10% final withholding tax as these are considered as performers in front of camera.
15. How easy is it to engage non-EU/EEA crew in Malta?
Unfortunately you need up to 8 weeks for processing their working permits. Without the correct permit their salaries will not be eligible for the rebate.
16. Are there any notable exclusions from eligible expenses?
It is worth noting that air travel outside the EU/EEA/UK is not eligible as well as equipment from outside these areas. All hires of foreign equipment (from EU/EEA/UK) and crew (worldwide) are eligible only for the period that they are on the ground in Malta. Construction and costume expenses must adhere to specific rules in order to be eligible (See Guidelines, page 32, No. 5.1.14 for construction related info, and, page 33, No. 5.1.22 for Wardrobe and costumes purchases.) Other general purchases and fuel are not eligible.
Other ineligible costs include the standard items ineligible in most other countries such as financing costs, development costs and cash payments without proper receipts. The audit fee (ranging from 5k-30k) which is deducted from the cash rebate is a non-eligible item. The Malta-based service company must be in good standing with local taxes and VAT payments.
17. Any deductions to the rebate or anything else worth noting?
Do note that currently 0.5% of the eligible costs will need to be paid to a skills development fund. Basically, with effect from 1st January 2023, the Malta Film Commission introduced a mandatory financial contribution from all industry players, the relevant beneficiary applying for the Financial Incentives for the Audiovisual Industry scheme (aka ‘Cash Rebate’). This contribution will be calculated as a percentage of the final eligible Malta Spend set at 0.5% which is to be paid to the “Opportunity for All: Skills Development Fund. Furthermore you will be obliged to perform some promotional activities such as those described in point 13 above, and most likely you will need to entertain a photo op visit by the minister or the commissioner on set. However these events are respectful to any sensitivities you may have on your set on the day. Note also you must demonstrate a green effort towards your operations.
18. Anything else worth noting?
At the time of updating this page, the MFC is not issuing any provisional certificates for 2024 but expects to do so in due course "after the end of 2023". Also the MFC is excersizing the rule of issuing certificates not earlier than 3 months before the start of shooting in Malta. Until then it is issuing a LOI that does not require a full application to be submitted. The LOI can generaly be issued within a few weeks depending on the workload of the office. The provisional certificate usually gets issued within three weeks. However there were various reports in late 2022 and in 2023 from service providers and producers who experienced delays due to understaffing issues at the time of application.
It is all very real and happening. Indeed Malta might be the only country in the world with such generous incentives and it might not last for long for sustainability reasons, especially with government now trying to reign in expenses. However meanwhile there is no catch and the government is honoring each and every payout provided the rules are abided to. Note equipment is eligible only if hired from the EU/EEA/UK.
2. How soon is the cash rebate delivered?
There is a target deadline of five months once the proper accounts are delivered. Sometimes the amount of productions hitting the island's shores can be a little overwhelming for the government-appointed auditors. However the pool of auditors has been increased and the majority of productions receive the rebate within five months, more or less. It is worth nothing however that lately, there are recorded delays for some productions, some which exceeded a year.
3. Is there a ceiling on the rebate?
No but the rebate on ATL costs cannot exceed 5 million Euros. However this capped amount of ATL salaries cannot be higher than 30% of the total eligible spend.
4. How sure is the rebate? Can it not be honoured for any reason beyond the production's control?
It is guaranteed by the government so as long as you have a provisional certificate and you abide by all the accounting rules. Despite politics playing a big part in the majority of lives of the Maltese, the country itself is politically stable and there are no signs of economic turmoil or 'bankruptcy'.
5. Is there an expiry date for the current incentives?
Yes, they are valid until end of 2023 after which they will be revised / extended. The new rebate starting from 2024 is expected to be very much the same as the current one, with the exception of some tweaks which 'might' affect high budget productions. When the new official and legal rebate document is released and published, its contents will be updated on this page.
6. Can I double dip?
No double dipping of state aid is allowed if within the EU. If you are receiving regional funding, then there can be a case where this does not constitute double-dipping.
7. Do I need a local service company to apply for the rebate?
Yes. Unless you are a local qualifying company. As a foreign company, it is wise to entrust a local service company to facilitate your needs.
8. How easy is it to apply?
You must apply at least 30 working days before the start of shooting. There is also a cultural test required. When the PCP prepares applications the process usually takes a full week but only provided all supporting documentation is immediately available. We advise you start preparing at least 3 weeks before the application deadline, especially if the PCP needs to separate or refine your Malta budget.
9. The rebate is "up to" 40%. How is the 40% rate achieved?
The base is 30%. If your story portrays Malta as Malta OR you use local facilities such as using the Malta Film Studios or other service providers, you will raise your rebate to 35%. If you maximize local resources such as hiring local crew so that the majority of your crew is not all foreign (unless there are availability issues) then you will achieve the 40% rate. In practice all productions try to maximize local resources and local facilities as it helps their budget, and therefore 40% is an easy rate to achieve.
10. Can I get a post rebate without shooting there?
Animation and VFX can participate in the rebate even if shooting does not take place in Malta as long as all works are taking place in Malta in conjunction with a local and recognized studio.
11. How does the advance grant work?
When you start to shoot you may present accounts along with supporting documents as per guidelines and a top sheet after which 10 percent of the rebate can be processed. Depending on how organized your accounts are you could receive this rebate within four weeks if the official current guidelines prevail.
12. How far can the budget change after the rebate certificate is provided?
A variance of 10% is acceptable. Anything over this contingency will require the approval of the MFC.
13. What obligations do we have besides adhering to the correct accounting regulations?
You will be required to hire at least five trainees, to give the MFC right of first refusal to receive hero props and/or hero costumes for its future promotional events, and you and your director and/or lead actors will be required to submit to brief interviews about the Malta experience. The MFC will not release any materials before your production is released, unless you approve otherwise.
14. Is there any taxes involved as a cost to the production?
The 18% VAT is not a cost and is refundable, although its good to note the turnaround can easily take nine months from the time of expenditure.
Any taxes applicable for crew would be strictly according to Double Taxation Agreements applicable, usually only if they are resident in Malta for over six months and in this case there is a favourable tax rate offered of 15%. All such taxes can usually be off-set in the national's home country.
All foreign performers in front of the camera (actors and stunts) must pay 10% regardless of if they are in Malta for under or over six months. These taxes usually qualify for double taxation agreements where the tax is offset by the taxpayer in his/her home country, if such an agreement exists with Malta. For periods longer than six months there can be Social Security Contributions (another form of 'tax') unless proof is provided that the respective crew member is already paying such in his/her home country. However one should check Double Taxation Agreements with Malta as the criteria is ultimately dependent on these agreements.
Local extras must be paid with a 10% final withholding tax as these are considered as performers in front of camera.
15. How easy is it to engage non-EU/EEA crew in Malta?
Unfortunately you need up to 8 weeks for processing their working permits. Without the correct permit their salaries will not be eligible for the rebate.
16. Are there any notable exclusions from eligible expenses?
It is worth noting that air travel outside the EU/EEA/UK is not eligible as well as equipment from outside these areas. All hires of foreign equipment (from EU/EEA/UK) and crew (worldwide) are eligible only for the period that they are on the ground in Malta. Construction and costume expenses must adhere to specific rules in order to be eligible (See Guidelines, page 32, No. 5.1.14 for construction related info, and, page 33, No. 5.1.22 for Wardrobe and costumes purchases.) Other general purchases and fuel are not eligible.
Other ineligible costs include the standard items ineligible in most other countries such as financing costs, development costs and cash payments without proper receipts. The audit fee (ranging from 5k-30k) which is deducted from the cash rebate is a non-eligible item. The Malta-based service company must be in good standing with local taxes and VAT payments.
17. Any deductions to the rebate or anything else worth noting?
Do note that currently 0.5% of the eligible costs will need to be paid to a skills development fund. Basically, with effect from 1st January 2023, the Malta Film Commission introduced a mandatory financial contribution from all industry players, the relevant beneficiary applying for the Financial Incentives for the Audiovisual Industry scheme (aka ‘Cash Rebate’). This contribution will be calculated as a percentage of the final eligible Malta Spend set at 0.5% which is to be paid to the “Opportunity for All: Skills Development Fund. Furthermore you will be obliged to perform some promotional activities such as those described in point 13 above, and most likely you will need to entertain a photo op visit by the minister or the commissioner on set. However these events are respectful to any sensitivities you may have on your set on the day. Note also you must demonstrate a green effort towards your operations.
18. Anything else worth noting?
At the time of updating this page, the MFC is not issuing any provisional certificates for 2024 but expects to do so in due course "after the end of 2023". Also the MFC is excersizing the rule of issuing certificates not earlier than 3 months before the start of shooting in Malta. Until then it is issuing a LOI that does not require a full application to be submitted. The LOI can generaly be issued within a few weeks depending on the workload of the office. The provisional certificate usually gets issued within three weeks. However there were various reports in late 2022 and in 2023 from service providers and producers who experienced delays due to understaffing issues at the time of application.