FAQ - MALTA CASH REBATE
Last update 6 July 2024
1. The "up to 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. There is no catch and the government is honoring each and every payout provided the rules are abided to. Furthermore the government carried out a groundbreaking secret economic study revealing that for every tax payer's handout the local economy benefits from a multiple of 3 times the handout.
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. It is worth nothing however that, lately, there are recorded delays for some productions.
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 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 currently is no significant risk of economic turmoil or so called 'bankruptcy'.
5. Is there an expiry date for the current incentives?
Yes, they are valid until end of 2025 after which they will be revised or extended.
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. Qualifying companies (the producer's company) can also apply directly and it is not mandatory that the service company becomes the applicant.
9. The rebate is "up to" 40%. How is the 40% rate achieved?
The base or minimum 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. However there are specific targets to reach in every department and if you have difficult reaching them you need to coordinate with the commission and their Opportunity For All department which helps with recruiting.
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 well organized your accounting is, 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. The VAT on hotels and accomodation is reduced to 7%.
Taxes applicable for crew would be applicable if they worked in Malta for more than six months and the rates are strictly according to any Double Taxation Agreements applicable. In the absence of a DTA, Malta offers a favourable flat tax rate of 15%. All such taxes can usually be off-set in the national's home country, depending on the DTA terms.
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 (DTA) exists with Malta. For periods longer than six months there are usually applicable 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 on payroll must be paid with a 10% final withholding tax.
15. How easy is it to engage non-EU/EEA crew in Malta?
Unfortunately you need to allow up to eight weeks for processing their working permits even if the guidelines say six weeks. With luck some working permits from certain countries can arrive within four or five weeks. Without the correct permit their salaries will not be eligible for the rebate. If the crew or cast member requires a visa to enter Malta this working permit needs to be issued before the visa is issued by Malta's embassy abroad, unless he/she enters Malta as a tourist first for a personal trip under a tourist visa. But then that person's stay in Malta is limited to the period allowed by the tourist visa unless an extension is applied for.
16. Are there any notable exclusions from eligible expenses?
IAll foreign equipment 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. 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 expense. 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?
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.
18. Anything else worth noting?
The MFC is exersising 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 generally be issued within a few weeks depending on the workload of the office. The provisional certificate usually gets issued within three or four weeks. Currently the commission is being very strict with the amount of local crews hired in order for producers to garner the extra 5%, topping the 35% to 40%. In extremely busy times where more than three productions are shooting in Malta at the same time, finding enough qualified crew in certain roles can be a challenging feat.
It is all very real and happening. Indeed Malta might be the only country in the world with such generous incentives. There is no catch and the government is honoring each and every payout provided the rules are abided to. Furthermore the government carried out a groundbreaking secret economic study revealing that for every tax payer's handout the local economy benefits from a multiple of 3 times the handout.
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. It is worth nothing however that, lately, there are recorded delays for some productions.
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 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 currently is no significant risk of economic turmoil or so called 'bankruptcy'.
5. Is there an expiry date for the current incentives?
Yes, they are valid until end of 2025 after which they will be revised or extended.
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. Qualifying companies (the producer's company) can also apply directly and it is not mandatory that the service company becomes the applicant.
9. The rebate is "up to" 40%. How is the 40% rate achieved?
The base or minimum 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. However there are specific targets to reach in every department and if you have difficult reaching them you need to coordinate with the commission and their Opportunity For All department which helps with recruiting.
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 well organized your accounting is, 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. The VAT on hotels and accomodation is reduced to 7%.
Taxes applicable for crew would be applicable if they worked in Malta for more than six months and the rates are strictly according to any Double Taxation Agreements applicable. In the absence of a DTA, Malta offers a favourable flat tax rate of 15%. All such taxes can usually be off-set in the national's home country, depending on the DTA terms.
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 (DTA) exists with Malta. For periods longer than six months there are usually applicable 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 on payroll must be paid with a 10% final withholding tax.
15. How easy is it to engage non-EU/EEA crew in Malta?
Unfortunately you need to allow up to eight weeks for processing their working permits even if the guidelines say six weeks. With luck some working permits from certain countries can arrive within four or five weeks. Without the correct permit their salaries will not be eligible for the rebate. If the crew or cast member requires a visa to enter Malta this working permit needs to be issued before the visa is issued by Malta's embassy abroad, unless he/she enters Malta as a tourist first for a personal trip under a tourist visa. But then that person's stay in Malta is limited to the period allowed by the tourist visa unless an extension is applied for.
16. Are there any notable exclusions from eligible expenses?
IAll foreign equipment 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. 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 expense. 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?
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.
18. Anything else worth noting?
The MFC is exersising 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 generally be issued within a few weeks depending on the workload of the office. The provisional certificate usually gets issued within three or four weeks. Currently the commission is being very strict with the amount of local crews hired in order for producers to garner the extra 5%, topping the 35% to 40%. In extremely busy times where more than three productions are shooting in Malta at the same time, finding enough qualified crew in certain roles can be a challenging feat.