BUSINESS PROMOTION gS.L.325.06 1 
SUBSIDIARY LEGISLATION 325.06 
BUSINESS PROMOTION REGULATIONS 
1st November, 2000 
LEGAL NOTICE 135 of 2001, as amended by Legal Notices 228 of 2002, 
and 98 and 128 of 2003. 
Title. 1. The title of these regulations is the Business Promotion 
Regulations. 
Interpretation. 
Amended by: 
L.N. 228 of 2002; 
L.N. 98 of 2003; 
L.N. 128 of 2003. 
Cap. 325. 
2. (1) In these regulations, unless the context otherwise 
requires: 
"Act" means the Business Promotion Act; 
"Corporation" means: 
(a) for the purposes of regulation 11, the Institute for the 
Promotion of Small Enterprise Limited; 
(b) for the purpose of regulations 13 and 14(1) to (5), the 
Employment and Training Corporation; 
(c) for the purpose of regulations 4, 5, 6, 7, 8, 9, 10, 12, 
14(6) to (9), 18, 20, 28 and 30 to 39, the Malta 
Development Corporation; 
a n d f o r t h e p u r p o s e s o f t h e o t h e r r e g u l a t i o n s , t h e w o r d 
"Corporation" shall mean any of the above entities as the case may 
require; 
"medium-sized enterprise", "small enterprise" and "micro 
enterprise" shall have the meaning assigned to them by regulation 
3; 
"Minister" means the Minister responsible for Economic 
Services and includes, to the extent of the authority given, any 
person or authority authorised by him to act in that behalf for any 
purpose of these regulations; 
"qualifying expenditure" shall mean expenditure of a capital 
nature -
(a) incurred in acquiring, developing or constructing 
tangible fixed assets consisting of land, buildings or 
structures, plant and machinery (including computer 
software); or 
(b) incurred in the acquisition or development of 
technology or know-how whether this is patented or 
not; 
where the tangible and intangible assets referred to in paragraphs 
(a) and (b) are used in the production of the income derived from 
the activities referred to in article 3(1) of the Act; and 
where the investment project in respect of which the expenditure 
has been incurred is maintained for at least five years or such other 
shorter period as the Corporation may deem appropriate in view of

2 gS.L.325.06 BUSINESS PROMOTION 
the nature of the investment project; and "investment project" shall 
include any qualifying expenditure incurred by a company whether 
such expenditure is incurred over a period of time or not and 
whether such expenditure is in respect of a number of items or not: 
Provided that with respect to companies which do not 
qualify as a medium or small sized enterprise, the qualifying 
expenditure in terms of paragraph (b) shall not exceed twenty-five 
per cent of the total qualifying expenditure: 
Provided further that the expenditure is incurred in relation 
to the setting up of a new activity, the extension or expansion of an 
existing activity or in relation to the commencement of an activity 
which involves a change in the product or production processes 
then undertaken by the company, and provided that the said activity 
is carried out in Malta: 
Provided further that with respect to expenditure referred 
to in paragraph (a) the expenditure is incurred on assets - 
(i) which are new or used in Malta for the first time 
except when the assets consist of land or 
buildings; and 
(ii) in respect of which no income tax benefit has 
previously been obtained under the Act or any 
regulations made thereunder by any person who 
is connected with the company claiming any 
benefit contemplated by these regulations or the 
Act; and, for the purposes of this sub-paragraph, 
a person shall be considered to be connected to 
such company if one is, directly or indirectly, 
controlled or beneficially owned to the extent of 
more than fifty per cent by the other or both are, 
directly or indirectly, controlled or beneficially 
owned to the extent of more than fifty per cent 
by the same persons: 
Provided further that: 
(i) immovable property held by title of 
emphyteusis; and 
(ii) any asset acquired under a contract of hire which 
stipulates that ownership of the asset shall or 
may pass to the lessee when a specified amount 
has been paid, 
shall, for the purposes of this definition, be deemed to be assets 
acquired by the company: 
Provided further that with respect to the expenditure 
incurred on the acquisition of assets referred to in paragraph (b) 
such expenditure is incurred on assets which, in accordance with 
generally accepted accounting principles, are amortizable and 
which are purchased from third parties under market conditions; 
"waste treatment" means physical, thermal, chemical or 
biological processes, including sorting, which change the 
characteristics of the waste in order to reduce its volume or 
hazardous nature, facilitate its handling or enhance recovery, and

BUSINESS PROMOTION gS.L.325.06 3 
shall include waste management. 
(2) Subject to the provisions of subregulation (1), terms and 
expressions used in these regulations shall, unless the context 
otherwise requires, have the meaning assigned to them in the Act. 
Definition of small 
and medium-sized 
enterprises. 
Amended by: 
L.N. 98 of 2003; 
L.N. 128 of 2003. 
3. (1) A medium-sized enterprise is an enterprise which is not 
a small enterprise as hereinafter defined in these regulations, and 
which -
(a) has fewer than two hundred and fifty employees; and 
(b) has either - 
(i) an annual turnover not exceeding the equivalent 
of forty million Euros, or 
(ii) a balance sheet total, that is to say, total assets, 
as at the end of an accounting period, not 
exceeding the equivalent of twenty-seven 
million Euros; and 
(c) is to be treated as being independent in terms of 
subregulation (3): 
Provided that the conditions set out in paragraphs (a) and 
(b) shall be deemed to be satisfied by the enterprise if they are 
satisfied collectively by the enterprise and by any other enterprise 
the capital or voting rights of which is owned, directly or 
indirectly, to the extent of at least twenty-five per cent by the 
enterprise; and for this purpose the number of employees, turnover 
and total assets shall be cumulated for all such enterprises; 
provided that sales transactions and balances between the said 
enterprises shall be ignored. 
(2) A small enterprise shall be an enterprise which - 
(a) has fewer than fifty employees; and 
(b) has either - 
(i) an annual turnover not exceeding the equivalent 
of seven million Euros; or 
(ii) a balance sheet total, that is to say, total assets, 
as at the end of an accounting period, not 
exceeding the equivalent of five million Euros; 
and 
(c) is to be treated as being independent in terms of 
subregulation (3): 
Provided that the conditions set out in paragraphs (a) and 
(b) shall be deemed to be satisfied by the enterprise if they are 
satisfied collectively by the enterprise and by any other enterprise 
the capital or voting rights of which is owned, directly or 
indirectly, to the extent of at least twenty-five per cent by the 
enterprise; and for this purpose the number of employees, turnover 
and total assets shall be cumulated for all such enterprises; 
provided that sales transactions and balances between the said 
enterprises shall be ignored. 
(3) An enterprise shall for the purposes of subregulations (1) 
and (2) be treated as being independent if no more than twenty-five

4 gS.L.325.06 BUSINESS PROMOTION 
per cent of its capital or voting rights are owned by one enterprise, 
or jointly by several enterprises, which do not satisfy the conditions 
of subregulations (1) and (2), as the case may require. 
(4) Where it is necessary to distinguish between a small 
enterprise and a micro-enterprise, the latter shall be an enterprise 
which has fewer than ten employees and satisfies the other 
conditions to qualify as a small enterprise. 
(5) The determination of whether the conditions referred to in 
subregulation (1)(a) and (b) and in subregulation (2)(a) and (b) are 
satisfied shall be made by reference to the enterprise’s last 
approved financial statements: 
Provided that where the company’s last approved financial 
statements do not refer to any of the enterprise’s last two financial 
periods or where financial statements have not yet been approved, 
the determination of whether or not a company satisfied those 
conditions shall be made by the Corporation on the basis of 
information provided by the company and any other information 
available to the Corporation. 
(6) For the purpose of determining whether an enterprise 
satisfies the conditions set out in subregulations (1) and (2) - 
(a) the annual turnover of that enterprise shall, when 
stated in Maltese liri, be translated into Euros at an 
average rate of exchange which shall be arrived at by 
dividing the aggregate of the middle rate of exchange 
determined by the Central Bank of Malta for each 
whole month comprised in an accounting period by the 
number of whole months comprised in that period; and 
(b) the total assets of that enterprise shall, when stated in 
Maltese liri, be translated into Euros at the middle rate 
of exchange last determined by the Central Bank of 
Malta on or prior to the date on which the accounting 
period of the enterprise ends; 
and where an enterprise prepares its financial statements in a 
currency other than in Maltese liri or Euros, the turnover and total 
assets of that company shall first be translated into Maltese liri and 
then into Euros by reference to the middle rate of exchange as 
determined by the Central Bank of Malta using the methods set out 
in paragraphs (a) and (b). 
(7) If, in respect of an enterprise, it has already been 
established by reference to its financial statements for a period of at 
least twelve months whether or not it qualifies as a medium-sized 
enterprise, a small enterprise or a micro-enterprise, it shall only 
acquire or lose such a status if the conditions set out in 
subregulations (1) and (2) are satisfied or are no longer satisfied, as 
the case may be, for two consecutive accounting periods. 
(8) For the purposes of this regulation, the number of full-time 
employees shall be arrived at by dividing the number of full-time 
employees employed by the enterprise at the end of each whole 
month comprised in an accounting period by the number of months 
in that accounting period.

BUSINESS PROMOTION gS.L.325.06 5 
(9) For the purposes of subregulations (1) and (2), the number 
of employees shall be determined by adding to the number of fulltime 
employees the result obtained from dividing the number of 
hours worked by employees, who are not employed on a full-time 
basis, by one thousand and seven hundred and sixty. 
(10) For the purposes of this regulation, if a financial period of 
a company, other than the first financial period, is less or more than 
twelve months, the amounts referred to in subregulation (1)(b) and 
in subregulation (2)(b) and the number of hours worked by 
employees who are not employed on a full-time basis referred to in 
subregulation (9) shall be divided by three hundred and sixty five 
and then multiplied by the number of days comprised in that 
accounting period. 
(11) For the purposes of this regulation, "enterprise" shall mean 
an enterprise which carries on a trade or business in Malta: 
Provided that this subregulation shall not be applicable for 
the purpose of determining whether or not an enterprise is a small, 
medium-sized or micro enterprise in order to establish: 
(i) the tax benefits such enterprise will be entitled 
to in year of assessment 2004 and subsequent 
years of assessments; 
(ii) the other benefits such enterprise will be entitled 
to as from 1 January 2003. 
Reduced rates of 
income tax. 
Amended by: 
L.N. 228 of 2002; 
L.N. 98 of 2003. 
4. (1) Where a company, throughout a relevant accounting 
period, satisfies the conditions set out in this regulation, the profits 
derived by such company from its trade or business carried out in 
Malta shall - 
(a) with effect from the year of assessment from which the 
provisions of this regulation become applicable and 
the six subsequent years of assessment, be subject to 
income tax at the rate of 5%; 
(b) for the six years of assessment immediately following 
the years of assessment as determined in accordance 
with paragraph (a), be subject to income tax at the rate 
of 10%; 
(c) for the five years of assessment immediately following 
the years of assessment as determined in accordance 
with paragraphs (a) and (b), be subject to income tax 
at the rate of 15%: 
Provided that the last year of assessment in respect of 
which the provisions of this regulation shall be applicable shall be 
year of assessment 2021: 
Provided further that, subject to the immediately preceding 
proviso, the Corporation shall confirm to each company qualifying 
in terms of this regulation the minimum number of years of 
assessment, which shall not exceed ten years of assessment, in 
respect of which the provisions of this regulation shall be 
applicable to that company; and the Corporation may, not earlier 
than twelve months prior to the expiration of such period, renew 
such confirmation for a further period not exceeding five years:

6 gS.L.325.06 BUSINESS PROMOTION 
Provided further that, without prejudice to a company’s 
rights with respect to any period confirmed by the Corporation in 
terms of the immediately preceding proviso, the Minister may by 
notice in the Gazette determine that the last year of assessment in 
respect of which the provisions of this regulation shall be 
applicable shall be a year of assessment prior to year of assessment 
2021: 
Provided further that companies referred to in 
subregulation (2)(a) shall only be eligible to be taxed at the rates 
stipulated in paragraphs (b) and (c) of this subregulation, and in 
such case the rate of tax referred to in paragraph (b) shall be 
applicable for six years of assessment with effect from the year of 
assessment from which the provisions of this regulation become 
applicable and the rate of tax referred to in paragraph (c) shall be 
applicable for the following five years of assessment. 
(2) For the purposes of subregulation (1), the year of 
assessment from which the provisions of this regulation shall 
become applicable is - 
(a) year of assessment 2002, or any of the subsequent two 
years of assessment in the case of - 
(i) a company incorporated in Malta and which 
existed on the day immediately preceding the 
date of the coming into force of this regulation; 
and 
Cap. 386. 
(ii) a company incorporated outside Malta and 
which was registered as an oversea company in 
terms of the Companies Act on the day 
immediately preceding the date of the coming 
into force of this regulation, 
as shall be determined by the company by notice to the 
Corporation by not later than 30 April 2003; 
(b) any of the first three years of assessment of the 
company in the case of any other company as shall be 
determined by the company by the end of its third year 
of assessment, 
so however that, if no such notice is given by the aforementioned 
dates, the earlier year from the available years of assessment shall 
be the first year of assessment from which the provisions of this 
regulation shall be applicable: 
Provided that where a company as is referred to in 
paragraph (a) carries on a trade consisting of a project in respect of 
which the Corporation has, prior to the date referred to in the said 
paragraph (a), granted its approval, conditional or otherwise, that a 
company which undertakes the said project shall qualify for any of 
the incentives provided by articles 4, 5 or 5A of the Act, such 
company shall, if it has not started utilising the said incentive, be 
deemed to be a company falling under paragraph (b). A certificate 
issued by the Corporation, to the effect that a company is deemed 
to be a company falling under paragraph (b), shall constitute 
conclusive evidence of the facts stated therein for all purposes of

BUSINESS PROMOTION gS.L.325.06 7 
law and a copy of any such certificate shall be forwarded by the 
Corporation to the Commissioner of Inland Revenue: 
Provided further that a company to which the preceding 
proviso refers shall be deemed to be a company falling under 
paragraph (b) as long as it satisfies such of those conditions 
contained in the aforementioned Corporation’s approval as the 
Corporation may specify in the certificate referred to in the 
preceding proviso. 
(3) Subject to the provisions of subregulation (4), a company 
shall qualify for the benefit provided by subregulation (1) if its 
trade or business, in Malta, consists solely of one or more of the 
following qualifying activities: 
(a) any one or more of the activities set out in the 
Schedule, which is published in the English language 
only; 
(b) the repair, improvement or maintenance of any of the 
following: 
(i) yachts or motor boats having a length of at least 
eight metres which are not used in a trade or 
business consisting of the transportation of 
passengers or goods but including yachts or motor 
boats, which although used in such a trade or 
business, are so used for the transportation and 
accommodation of passengers in yachts or motor 
boats not having more than thirty berths, aircraft, 
engines or equipment incorporated or used in 
such vessels or aircraft; or components of such 
engines or equipment; 
(ii) turbines; 
(iii) gantry cranes, quay cranes, reach stackers, tug 
masters and large fork lifters (or their 
equipment) which are used to handle containers 
in a port; 
(iv) containers which are fifteen feet or more in 
length and which are used for the transportation 
of merchandise; 
(v) goods the manufacture of which would fall 
within any one or more of the activities referred 
to in paragraph (a), and which goods have been 
manufactured by the company; 
(c) repair, maintenance, installation and commissioning of 
marine electrical and electronic systems; 
(d) software development, including debugging of 
software and the installation, implementation, support 
and maintenance of the software, and the provision of 
training on the use of the software where the 
installation, implementation, support, maintenance or 
training is carried out by the company which has 
developed the said software in Malta or, with respect 
to a specific project, is mainly carried out in relation to

8 gS.L.325.06 BUSINESS PROMOTION 
software developed by the company in Malta; 
(e) development and maintenance of information and 
content mainly for international dissemination through 
electronically accessed media including the internet, 
the world wide web, WAP services, interactive 
television, compact discs and intranets; 
(f) research and development, including the design or 
development of goods or the development of 
production processes or methods; 
(g) waste treatment; 
Cap. 334. (h) the activities set out in article 11 of the Malta 
Freeports Act and carried on mainly in a freeport as 
defined by that Act, by a company licensed under that 
Act; 
(i) the production of audio visual productions consisting 
of feature films, television films, advertising 
programmes or advertisements, and documentaries; 
(j) biotechnology, comprising: 
(i) the production or development of intellectual 
property or goods; or 
(ii) the rendering of services; 
resulting from, or related to, the study, research, 
discovery, application, modification or development of 
living organisms or materials derived from them: 
Provided that a company carrying out the activities set out 
under paragraphs (g), or (j) shall only qualify for the benefit 
provided by this regulation if the project is approved by the 
Corporation and, in giving its approval, the Corporation may 
impose such conditions as it deems fit. 
(4) A company shall not qualify for the benefit provided by 
subregulation (1) if - 
(a) the company sells by retail and, for this purpose, a 
company shall be deemed not to sell by retail if its 
sales of goods or services are made to - 
(i) a person who carries on a trade and the goods or 
services so sold to such person are either resold 
by such person or are used by such person for 
the purpose of his trade; or 
(ii) a person, other than an individual, who uses 
those goods or services for the purpose of an 
undertaking carried on by such person; 
(b) the company’s trade or business includes any one of 
the following activities: 
(i) dividing, sorting, packaging, mixing without 
changing the character of the good, drying, 
labelling, or other similar processes or any 
combination of such processes to goods which 
are acquired in bulk merely to prepare those

BUSINESS PROMOTION gS.L.325.06 9 
goods for sale or distribution, excluding goods 
in respect of which the said company carries on 
any other activity referred to in subregulation 
(3)(a); 
(ii) the assembly of any goods where - 
(1) the final assembled good is clearly 
recognisable from the individual 
components or parts from which it is 
assembled without regard being had to any 
exterior casing of the good; and 
(2) the components and parts from which the 
good is assembled are such that the good is 
nearly complete and the assembly work 
and the supervision of such assembly work 
only require the employment of almost 
exclusively unskilled workers, 
such that the assembly operation is of a spurious 
nature when considered in the light of 
manufacturing activities; 
(iii) without prejudice to subregulation (3)(b) and 
(c), the repair, maintenance, preservation, 
improvement, reconditioning, refurbishing or 
restoration of any good or any combination of 
such activities where such activities do not 
impose on such goods a change in their 
character; 
(iv) without prejudice to subregulation (3)(c), the 
installation, commissioning or assembly of 
goods on site, where the said goods have not 
been manufactured by the company which is 
installing, commissioning or assembling the 
goods on site: 
Provided that the provisions of this paragraph shall 
not be applicable to a company which carries on only 
any one or more of the activities set out in 
subregulation (3)(b) to (j): 
Provided further that the provisions of this 
paragraph shall not be applicable to a company which 
carries on any assembly work as, or as part of, the 
activities referred to in subregulation (3)(h); 
(c) the company, being eligible for the benefits provided 
by articles 4, 5 or 5A of the Act, has not, in terms of 
article 34(2) of the Act, waived its right to be eligible 
for the benefits provided by those articles for the year 
of assessment in question and for subsequent years of 
assessment: 
Provided that a company which has not waived its 
right to be eligible to the benefits provided by articles 
4, 5 and 5(a) of the Act as aforesaid may make its 
determination pursuant to subregulation (2) by 
notifying the Corporation.

10 gS.L.325.06 BUSINESS PROMOTION 
(5) (a) A company shall be eligible to qualify for the benefits 
provided by this regulation if it has been determined 
that it is so eligible by the Corporation. 
(b) For the purpose of making a determination pursuant to 
paragraph (a), the Corporation shall consider whether, 
g i v e n i t s a c t i v i t i e s , t h e c o m p a n y s a t i s f i e s t h e 
conditions set out in subregulations (3) and (4). 
(c) For the purposes of paragraph (b), the Corporation may 
request such information and explanations as it deems 
fit and may visit the premises of the company. 
(d) On being satisfied that a company satisfies the 
conditions set out in subregulations (3) and (4), the 
Corporation shall provide the said company with a 
certificate signifying the accounting period from which 
the company does satisfy the said conditions, and the 
company’s entitlement to the benefit provided by this 
regulation shall be conditional on the production of 
this certificate by the said company. A copy of any 
such certificate shall be forwarded by the Corporation 
to the Commissioner of Inland Revenue. 
(e) The certificate referred to in paragraph (d) shall 
constitute prima facie, and not conclusive, proof that 
the company qualifies for the benefit provided by this 
regulation. 
(f) The Corporation shall communicate its decision as to 
whether a company satisfies the conditions set out in 
subregulations (3) and (4) within sixty days from the 
receipt of all information requested by the Corporation 
for the purpose of making its determination. 
(g) The Corporation may, as and when it deems fit, request 
information and explanations from a company which 
has been furnished with a certificate pursuant to 
paragraph (d), and may visit the premises of such a 
company in order to determine whether the company is 
still eligible to qualify for the benefits provided by this 
regulation. 
(6) A company wishing to avail itself of the benefits provided 
by this regulation shall apply for a determination referred to in 
subregulation (5) by submitting an application to the Corporation. 
(7) A company shall only be entitled to benefit from the 
provisions of this regulation if, with the submission of its income 
tax return for every year of assessment in respect of which it claims 
a benefit in accordance with this regulation, it submits - 
(a) a declaration, signed by all the directors of the 
company or by the company secretary where such 
declaration is approved by the board of directors of the 
company, confirming that throughout the relevant 
accounting period the company’s trade or business 
consisted solely of the activities referred to in 
subregulation (3) and that the company is not

BUSINESS PROMOTION gS.L.325.06 11 
disqualified from benefiting from the provisions of 
this regulation by virtue of subregulation (4). Where 
the declaration is signed by the company secretary it 
shall also state: 
(i) whether all the directors of the company were 
present at the meeting approving the declaration 
and, if not all the directors were present, 
whether the meeting was properly convened as 
required by the company’s memorandum and 
articles; 
(ii) whether the declaration was unanimously 
approved by all the directors present at the 
meeting and, if approval was not unanimous, the 
number of votes against and the number of votes 
for the motion; and 
(b) a declaration, signed by the auditor of the company for 
the accounting period in question, confirming that, to 
the best of his knowledge and belief, the declaration 
referred to in paragraph (a) is correct. 
(8) Where a company (hereinafter in this subregulation 
referred to as the "relevant company") carries on a trade or business 
which consists solely or mainly in the mere expansion, duplication 
or replacement of a trade or business formerly carried on in Malta 
by any company in any way directly or indirectly connected or 
associated with the relevant company through shareholding, voting 
or other ownership or controlling rights, irrespective of the person 
in whom such rights are or may have been vested, the following 
provisions shall apply: 
(a) where such other company is a company to which 
subregulation (2)(a) applies, the relevant company 
shall, even if it is incorporated in Malta or registered 
as an oversea company after the date referred to in that 
subregulation, be deemed to be a company to which 
the said subregulation applies; and the years of 
assessment referred to in subregulation (1)(b) and (c) 
shall, with respect to the relevant company, commence 
from year of assessment from which the provisions of 
this regulation became applicable in respect of the 
other company in accordance with the provisions of 
subregulation (2); 
(b) where such other company is a company to which 
subregulation (2)(b) applies and the relevant company 
is also a company to which the said subregulation 
applies, the years of assessment referred to in 
subregulation (1)(a), (b) and (c) shall, with respect to 
the relevant company, commence from the year of 
assessment from which the provisions of this 
regulation became applicable for the other company in 
accordance with the provisions of subregulation (2): 
Provided that the provisions of article 25(3), (4) and (5) of 
the Act shall be applicable to this condition in like manner as they 
are applicable to article 4(1)(c) of the Act.

12 gS.L.325.06 BUSINESS PROMOTION 
Cap. 123. 
(9) Profits which are taxed at a reduced rate of income tax as 
provided by subregulation (1) shall, for the purposes of the Income 
Tax Act, be allocated to the Maltese Taxed Account and article 67 
of that Act shall not be applicable to any distribution of such profits 
whether or not such distribution is made by the company qualifying 
from the benefit provided by this regulation or by any other 
company which, directly or indirectly, receives dividends which 
include the profits which have been taxed at a reduced rate in 
accordance with the provisions of this regulation. 
(10) The provisions of article 25 of the Act shall, as far as they 
are applicable, apply to the incentive provided by this regulation 
and, for this purpose, references in that article to a qualifying 
company shall include references to a company qualifying for the 
benefit provided by this regulation; and subarticles (1) and (2) 
thereof shall apply with respect to the years of assessment as 
determined in accordance with subregulations (1) and (2). 
(11) In this regulation "relevant accounting period" shall mean 
the accounting period as determined in accordance with article 11 
of the Income Tax Act which ends in the year preceding year of 
assessment 2002 and subsequent years of assessment, as the case 
may require. 
Investment tax 
credits. 
Amended by: 
L.N. 228 of 2002. 
5. (1) A company which qualifies for the benefit provided by 
regulation 4 or which would have so qualified, but for the fact that 
the years of assessment in respect of which it may so qualify have 
not, as elected for by the said company, yet commenced or have 
elapsed, shall, in respect of year of assessment 2002 and 
subsequent years of assessment, be entitled to an investment tax 
credit which tax credit shall, with respect to an investment project, 
be calculated either - 
(a) as a percentage of the qualifying expenditure incurred 
by such company in the year preceding the year of 
assessment in question; or 
(b) in accordance with the provisions of subregulations (3) 
to (11): 
Provided that the total amount of the investment tax credit 
that may be claimed in terms of this regulation for a given 
investment project shall be such that the conditions set out in 
regulations 12 and 18 are satisfied. 
(2) The percentage referred to in subregulation (1)(a) shall, in 
the case of a company which qualifies as a small or medium-sized 
enterprise, not exceed 65%, and in the case of any other company 
the said percentage shall not exceed 50%. 
(3) A company may claim an investment tax credit by 
reference to the wage costs pertaining to the jobs created, in Malta, 
as a result of an investment project the expenditure on which 
constitutes qualifying expenditure. 
(4) For the purposes of subregulation (3), the investment tax 
credit based on job creation shall be a percentage of the wage cost 
for the first twenty-four month period of the employment of an 
individual in respect of whom the job was created.

BUSINESS PROMOTION gS.L.325.06 13 
(5) In the case of a company which qualifies as a small or 
m e d i u m - s i z e d e n t e r p r i s e , t h e p e r c e n t a g e r e f e r r e d t o i n 
subregulation (4) shall not exceed 65%, and in the case of any other 
company the percentage shall not exceed 50%. 
(6) The amount of investment tax credit based on job creation 
which a company may claim in a year of assessment shall be based 
on the wage cost incurred by that company in the accounting period 
ending in the year preceding that year of assessment. 
(7) A company shall be considered to have created a job as a 
result of an investment project for those individuals who are 
employed by the company during the employment qualifying 
period as defined in subregulation (9), as long as the employment 
of any such individual is not in replacement of another individual 
and provided that such employment is not terminated before the 
lapse of five years from the date on which they were employed: 
Provided that for the purpose of determining whether jobs 
have been created, individuals who are employed by the company 
on a part-time basis shall be deemed to be a number of full-time 
employees as is produced by dividing the number of hours worked 
by such part-time employees by one thousand and seven hundred 
and sixty: 
Provided further that where the accounting period ending 
in the year preceding a year of assessment is more or less than 
twelve months, the number of hours worked by part-time 
employees shall be divided by an amount which shall be arrived at 
by dividing the amount of one thousand and seven hundred and 
sixty by three hundred and sixty-five and then multiplying the 
result by the number of days comprised in that accounting period. 
(8) For the purpose of determining whether an individual has 
been employed by a company for the required five year period 
referred to in subregulation (7), it shall be deemed that the date of 
commencement of employment of an individual who has been 
employed by that company in replacement of another individual, 
whose employment was terminated for whatever reason, shall be 
the date of commencement of employment of the individual whose 
employment was replaced; provided that any such individual is 
employed within six months of the date of termination of 
employment of the individual whose employment is replaced. 
(9) For the purposes of this regulation, the employment 
qualifying period shall be the period commencing on the day which 
precedes the day on which the assets pertaining to the investment 
project are first employed by the company by one hundred and 
eighty-three days, up to the third anniversary of the date of 
completion of the investment project. 
(10) A company wishing to claim an investment tax credit for a 
year of assessment based on job creation in accordance with 
subregulations (3) to (9) shall submit details of its investment 
project and of the individuals employed as a result of that 
investment project to the Corporation for its approval and shall, for 
each year comprised in the employment qualifying period, submit 
further details with respect to the same investment project

14 gS.L.325.06 BUSINESS PROMOTION 
consisting of further amounts invested, termination of employees 
previously detailed as having been employed and new employees 
distinguishing between employees in respect of whom new jobs 
have been created and employees employed in replacement of 
employees whose employment has been terminated as well as the 
wage costs in respect of which a credit is to be claimed in terms of 
this regulation for that year of assessment. 
(11) The Corporation, on being satisfied with the submissions 
referred to in subregulation (10), and within sixty days from the 
receipt of all relevant information it may request, shall issue a 
certificate setting out the investment tax credits to which the 
company is entitled to. 
(12) A company which is entitled to an investment tax credit in 
respect of a year of assessment shall be entitled to deduct from the 
amount of income tax which is due on its chargeable income 
derived from its trade or business for that year of assessment the 
amount of the investment tax credit and, where the investment tax 
credit, for any year of assessment, exceeds the income tax payable 
by such a company for that year, the excess shall be added to the 
investment tax credit for the following year and deemed to be part 
of that investment tax credit, or if there is no such investment tax 
credit for that year, be deemed to be the investment tax credit for 
that year and so on for subsequent years: 
Provided that so much of the investment tax credit which is 
not so utilised at the end of any year and which is therefore carried 
forward to be added to the investment tax credit of the following 
year of assessment and deemed to be part of that investment tax 
credit or to be deemed to be the investment tax credit for that year, 
shall be increased by seven per cent per annum or by such other 
rate as may be prescribed by the Minister by notice in the Gazette; 
and where any part of the investment tax credit as so increased is 
again not utilised, so much of it as is not utilised shall be further 
increased by the said percentage and carried forward to the 
following year and so on for subsequent years: 
Provided further that an investment tax credit may only be 
deducted from the tax due on chargeable income which is derived 
from one or more of the activities referred to in regulation 4(3). 
(13) The provisions of article 25 of the Act shall, as far as is 
applicable, apply to the incentive provided in terms of this 
regulation and for this purpose references in that article to a 
qualifying company shall include references to a company 
qualifying for the benefit provided by this regulation. 
(14) Where a company has benefited from the provisions of this 
regulation, the investment tax credit shall be deemed to have 
relieved from tax so much of that company’s chargeable income 
which, when multiplied by the rates of tax at which it was 
chargeable in that year, is equal to the investment tax credit, and 
where such chargeable income has been taxed at different rates of 
tax the investment tax credit shall first be deemed to have relieved 
that part of the income which has been taxed at the lowest rate; and 
where the company or any subsequent company distributes the

BUSINESS PROMOTION gS.L.325.06 15 
income which is so deemed to have been relieved from tax, such 
company or companies shall state in the dividend warrant 
pertaining to any such distribution that such income has been 
relieved from tax by an investment tax credit in accordance with 
this regulation; and the tax which has been so relieved shall not be 
available for refund for any purpose of the Income Tax Acts. 
Cap. 123. 
(15) The chargeable income which is deemed to have been 
relieved from tax in accordance with subregulation (14) shall, for 
the purposes of the Income Tax Act, be allocated to the Maltese 
Taxed Account of the company in question and upon distribution 
shall be exempt from income tax to the same extent as dividends 
referred to in article 9 of the Act, and for this purpose references in 
that article to a qualifying company shall include references to a 
company qualifying for the benefit provided by this regulation. 
Value added 
incentive scheme. 
Amended by: 
L.N. 228 of 2002; 
L.N. 98 of 2003. 
6. (1) Where a qualifying company, being a company which 
qualifies as such in terms of article 3(1)(a) and (b) of the Act, 
throughout a relevant accounting period, satisfies the conditions set 
out in this regulation, an amount of the company’s profits as is 
determined in accordance with subregulation (3), shall - 
(a) with effect from the year of assessment from which the 
provisions of this regulation may become applicable 
and the six subsequent years of assessment, be subject 
to income tax at the rate of 5%; 
(b) for the six years of assessment immediately following 
the years of assessment as determined in accordance 
with paragraph (a), be subject to income tax at the rate 
of 10%; 
(c) for the five years of assessment immediately following 
the years of assessment as determined in accordance 
with paragraphs (a) and (b), be subject to income tax 
at the rate of 15%: 
Provided that the last year of assessment in respect of 
which the provisions of this regulation shall be applicable shall be 
year of assessment 2021: 
Provided further that, subject to the immediately preceding 
proviso, the Corporation shall confirm to each company qualifying 
in terms of this regulation the minimum number of years of 
assessment, which shall not exceed ten years of assessment, in 
respect of which the provisions of this regulation shall be 
applicable to that company; and the Corporation may, not earlier 
than twelve months prior to the expiration of such period, renew 
such confirmation for a period not exceeding five years: 
Provided further that, without prejudice to a company’s 
rights with respect to any period confirmed by the Corporation in 
terms of the immediately preceding proviso, the Minister may by 
notice in the Gazette determine that the last year of assessment in 
respect of which the provisions of this regulation shall be 
applicable shall be a year of assessment prior to year of assessment 
2021: 
Provided further that companies referred to in

16 gS.L.325.06 BUSINESS PROMOTION 
subregulation (2)(a) shall only be eligible to be taxed at the rates 
stipulated in paragraphs (b) and (c) hereof, and in such case the rate 
of tax referred to in paragraph (b) shall be applicable for six years 
of assessment with effect from the year of assessment from which 
the provisions of this regulation may become applicable, and the 
rate of tax referred to in paragraph (c) shall be applicable for the 
following five years of assessment. 
(2) For the purposes of subregulation (1), the year of 
assessment from which the provisions of this regulation become 
applicable, is - 
(a) year of assessment 2002, or any of the subsequent two 
years of assessment in the case of - 
(i) a company incorporated in Malta and which 
existed on the day immediately preceding the 
date of coming into force of this regulation; and 
Cap. 386. 
(ii) a company incorporated outside Malta and 
which was registered as an oversea company in 
terms of the Companies Act on the day 
immediately preceding the date of coming into 
force of this regulation, 
as shall be determined by the company by notice to the 
Corporation by not later than 30 April 2003; 
(b) any of the first three years of assessment of the 
company in the case of any other company as shall be 
determined by the company by the end of its third year 
of assessment, 
so however that if no such notice is given by the aforementioned 
dates, the earlier year from the available years of assessment shall 
be the first year of assessment from which the provisions of this 
regulation shall be applicable. 
(3) The amount of profits which shall be subject to reduced 
rates of income tax in accordance with the provisions of 
subregulation (1) shall be arrived at by the following formula: 
Where: 
Vc = value added in relevant accounting period 
Vb = average value added in base period 
Sc = sales in relevant accounting period 
Sb = average sales in base period 
Pc = profit in relevant accounting period 
Pb = average profit in base period: 
(a) 
æ 
Vc - Vb 
ö 
X (c) 
æ 
Pc - Pb 
ö Vb 
ç ÷ ç ÷ 
(b) è Sc - Sb ø è ø 
Sb

BUSINESS PROMOTION gS.L.325.06 17 
Provided that the amount of tax payable by a company as a 
result of this regulation shall in no case be lower than the 
company’s average tax payable in the base period for year of 
assessment 2002 which shall be arrived at by dividing the total of 
the tax payable by the company for each year of assessment 
pertaining to each accounting period comprised in the base period 
by the number of days in those accounting periods and multiplying 
the result thereof by the number of days comprised in the relevant 
accounting period; and, for the purpose of this proviso, "tax 
payable" shall comprise the tax payable by the company on its 
chargeable income derived from its trade or business: 
Provided further that the total amount of profits which are 
brought to charge to tax in a year of assessment, shall in no case 
exceed the actual amount of profits as calculated before the 
application of the formula set out in this subregulation. 
(4) A company shall only qualify for the benefit provided by 
the provisions of this regulation if it satisfies all of the following 
conditions: 
(a) the amount of value added resulting from the 
company’s audited financial statements for the 
relevant accounting period exceeds the average 
amount of value added as shown in that company’s 
financial statements covering the base period; 
(b) throughout the base period and the relevant accounting 
period it was a qualifying company; 
(c) during the relevant accounting period it satisfied the 
conditions set out in regulation 4(4), without regard 
being had to the provisos to paragraph (b) thereto; 
(d) during the relevant accounting period its trade or 
business did not include the preparation or production 
of "food in the course of catering" including - 
(i) meals or snacks including - 
(1) hot and cold dishes including antipasto and 
dessert; 
(2) sandwiches, toast, potato chips, sausage 
rolls, pizza, pastizzi, qassatat and similar 
snacks; 
(3) biscuits, cakes, confectionery and similar 
items but excluding those sealed in a 
package by the manufacturer and supplied 
in that original sealed package, and those 
items which individually weigh 500 grams 
or more; 
(4) food supplied in restaurants, cafeterias, 
canteens, bars and other similar 
establishments 
(5) food prepared or produced for parties, 
functions, weddings and similar events; 
(6) food prepared or produced for 
consumption on aircraft and vessels or for

18 gS.L.325.06 BUSINESS PROMOTION 
consumption by persons pertaining to a 
particular location or organisation, 
including patients in hospitals or homes, 
residents of hotels or guest houses, 
workers in a particular workplace and the 
preparation or production of food in 
similar circumstances; 
(ii) milk, milkshake, tea, coffee and chocolate 
supplied in liquid form, excluding milk and 
milkshake supplied by the manufacturer thereof 
in bottles and containers for distribution to retail 
outlets but including any form of drink which is 
merely produced by adding liquid to powder or 
substance and where such drink is produced in 
order that it may be served in a bar, restaurant, 
canteen, cafeteria or other establishment or place 
to individuals for consumption. 
(5) For the purposes of this regulation: 
(a) except for paragraph (c), "profits" means the 
company’s chargeable income for income tax purposes 
after deducting any part thereof which does not accrue 
to the company from its trade or business carried out in 
Malta and after account has been taken of any 
incentive or benefit obtained by the company under the 
provisions of the Act or of these regulations; 
(b) a loss made in any accounting period comprised in a 
base period shall be deemed to be zero profits; 
(c) "value added" means the aggregate of - 
(i) the profits, before taxation, derived by the 
company from its trade or business, as reported 
in the company’s financial statements for the 
accounting period in question; 
(ii) the wages and salaries paid by the company, 
whether in cash or in kind, to its full-time and 
part-time employees and which amounts have 
been reported to the Inland Revenue Department 
under the final settlement system rules or any 
other rules complementing or replacing the 
same; 
(iii) the social security contributions paid by the 
company in respect of the amounts referred to in 
sub-paragraph (ii); and 
(iv) the cost of services which are provided by a 
company which, during the relevant accounting 
period, did not qualify for any of the benefits 
provided by this regulation, regulation 4 or 
articles 4, 5 or 5A of the Act and which is, 
directly or indirectly, controlled and beneficially 
owned to the extent of more than ninety per cent 
by the same persons and for the purpose of this 
sub-paragraph (iv) the cost of services shall

BUSINESS PROMOTION gS.L.325.06 19 
mean the wages and salaries paid by such other 
company, whether in cash or in kind, to its full 
time and part-time employees that carried out 
the services in question to the company claiming 
the benefit of this regulation and which amounts 
have been reported to the Inland Revenue 
Department under the final settlement system 
rules and any other rules complementing or 
replacing the same; 
Cap. 386. 
(d) where a company was not in existence, or in the case 
of a qualifying company incorporated outside Malta 
such company was not registered as an oversea 
company in accordance with the Companies Act, 
during the accounting periods comprised in a base 
period, the company shall, for the purpose of applying 
the formula set out in subregulation (3), be deemed to 
have had zero profits and zero value added in the base 
period and the result of parts (a) and (b) of the said 
formula shall be deemed to be one; 
(e) the amount of total sales shall be calculated free on 
board and where the sale is made pursuant to a 
contract of works, the amount of total sales shall 
include the uninvoiced value of any materials and 
components provided by the customer; 
(f) the average value added, average sales and average 
profits of a base period shall be arrived at by dividing 
the aggregate sales, value added and profits of the 
accounting periods comprised in the base period by the 
number of days comprised in those accounting periods 
and multiplying the result thereof by the number of 
days comprised in the relevant accounting period; 
(g) the base period shall be comprised of the accounting 
periods the profits of which fall to be charged to tax in 
the three years of assessment preceding the two years 
of assessment which precede the year of assessment in 
which the profits of the relevant accounting period fall 
to be charged to tax: 
Provided that where the profits of the relevant 
accounting period fall to be charged to tax in the 
company’s fourth year of assessment, the base period 
shall be comprised of the accounting period the profits 
of which fall to be charged to tax in the company’s 
first year of assessment; and where the profits of the 
relevant accounting period fall to be charged to tax in 
the company’s fifth year of assessment, the base 
period shall be comprised of the accounting period or 
periods the profits of which fall to be charged to tax in 
the company’s first two years of assessment; 
(h) where the result of parts (a) and (b) of the formula set 
out in subregulation (3) is a negative amount, such 
result shall be multiplied by "-1"; 
(i) where the result of part (b) of the formula set out in

20 gS.L.325.06 BUSINESS PROMOTION 
subregulation (3) is zero, the result of parts (a) and (b) 
of the said formula shall be deemed to be one. 
(6) Where a company which claims the benefit provided by 
this regulation has, since the end of any accounting period 
comprised in a base period, acquired the business, or part thereof, 
of another person, who is connected with such company, whether 
such acquisition is made by means of a merger or otherwise, the 
value added, total sales and profits for that accounting period and 
relating to the business acquired, shall be added to the value added, 
total sales and profits respectively of the company for the purpose 
of determining the amount of profits which shall be subject to 
reduced rates of income tax in accordance with the provisions of 
this regulation; and for the purposes of this subregulation, a person 
shall be considered to be connected to such company if one is, 
directly or indirectly, beneficially owned and controlled to the 
extent of more than fifty per cent by the other or both are, directly 
or indirectly, beneficially owned and controlled to the extent of 
more than fifty per cent by the same persons. 
(7) The provisions of regulation 4(5) to (11) shall apply 
mutatis mutandis to the benefit provided by this regulation as they 
apply to the benefit provided by that regulation. 
Rules for articles 6, 
7, 24B and 24C of 
the Act. 
Amended by: 
L.N. 228 of 2002. 
7. (1) The provisions of articles 6, 24B and 24C of the Act, 
and with effect from year of assessment 2003, the provisions of 
article 7 of the Act, shall only be applicable to expenditure which is 
qualifying expenditure as defined in these regulations: 
Provided that the provisions of article 7 of the Act shall 
only be applicable with respect to qualifying expenditure incurred 
in acquiring plant or machinery, or industrial buildings or 
structures as set out in the said article: 
Provided further that the provisions of this subregulation 
shall not affect the entitlement of any company in terms of article 
5A of the Act, which article shall apply without regard being had to 
the provisions of this subregulation.. 
Cap. 123. 
(2) Where the provisions of articles 6 and 24B of the Act are 
applied to a company which is not entitled to the incentive provided 
by regulation 5, the reduction in the rate of income tax shall be 
arrived at by multiplying nineteen and a quarter percentage points 
by the rate of tax at which the company is chargeable to tax in a 
year of assessment and dividing the product by the rate of income 
tax prescribed by article 56(6) of the Income Tax Act: 
Provided that where the company’s chargeable income, 
before applying the provisions of the said articles 6 and 24B of the 
Act, is taxable at different rates of tax: 
(a) the reduction in the rate of tax shall be calculated 
separately for each part of the company’s chargeable 
income, as is so taxable at different rates of tax, as is 
set in this sub-regulation; and 
(b) the profits which shall first be deemed to be reinvested 
for the purpose of article 6 of the Act shall, if 
the company by extraordinary resolution so resolves,

BUSINESS PROMOTION gS.L.325.06 21 
be those profits which are chargeable to tax at the 
highest rate. 
Soft loans. 
Amended by: 
L.N. 228 of 2002. 
8. (1) Where the Corporation is satisfied that the activities of 
a qualifying company, being a company which qualifies as such in 
terms of article 3(1)(a) and (b) of the Act, may contribute to the 
development of the economy as is consistent with the aims and 
objectives of the Government, the Corporation may grant loans to 
the said company, which loans shall not exceed 75% of the 
qualifying expenditure. 
Cap. 204. 
(2) The rate of interest charged by the Corporation on loans 
granted in terms of this regulation shall be at least equal to a rate to 
be arrived at by deducting two and a half percentage points from 
the minimum discount rate established by the Central Bank of 
Malta by means of directives issued in terms of the Central Bank of 
Malta Act. 
(3) The repayment of principal and the payment of interest on 
any loan granted in terms of the provisions of this regulation shall 
be secured by a general hypothec over the property of the company 
receiving the loan in addition to any other security which the 
Corporation may require: 
Cap. 16. 
Provided that for the purposes of Title XXIII of Part II of 
Book Second of the Civil Code, the Corporation may allow a 
hypothecary debt in respect of a loan or other banking facility 
granted by a financial institution to rank immediately prior to the 
general hypothec or other security of the Corporation relative to 
such loan: 
Provided further that the Corporation may accept a prime 
bank guarantee or other similar security in respect of its loan 
instead of or in addition to a general hypothec as aforesaid. 
(4) The repayment of any loan granted under the provisions of 
this regulation and the payment of interest thereon shall be made 
within a period of time and at instalments to be agreed upon with 
the Corporation, but such period shall in no case exceed ten years 
from the date on which the first loan amount was received by the 
company: 
Provided that, unless otherwise stipulated by the 
Corporation, for the first two years of the duration of the loan the 
company shall only be required to pay interest on the loan. 
(5) Where the Corporation has approved that a loan be granted 
by instalments, and any part of such loan has not yet been 
advanced, the Corporation may, without prejudice to any other 
remedy, withhold any portion of the loan still outstanding if - 
(a) any sum of money, whether principal or interest, due 
in respect of any loan provided under this regulation or 
article 16 of the Act, remains unpaid; or 
(b) any prior loan made under this regulation or under 
article 16 of the Act has not been applied for the 
purpose for which it was made or has not been 
expended in a careful, timely and economical manner; 
or

22 gS.L.325.06 BUSINESS PROMOTION 
(c) the company has gone into liquidation or has become 
insolvent or has assigned property for the benefit of 
creditors; or 
(d) there has been a breach or non-observance of any 
condition attached to the loan. 
Cap. 233. 
(6) The granting of loans made under this regulation shall not 
be subject to the provisions of the Exchange Control Act. 
(7) A company which carries on or intends to carry on the 
activities referred to in regulation 4(3)(f) or (j), either solely or 
together with any of the activities referred to in article 3(1)(a) and 
(b) of the Act shall, subject to the approval of the Corporation, be 
entitled to the benefit provided by this regulation. 
Loan interest 
subsidies. 
Amended by: 
L.N. 228 of 2002. 
9. (1) Where the Corporation is satisfied that the activities of 
a qualifying company, being a company which qualifies as such in 
terms article 3(1)(a) and (b) of the Act, may contribute to the 
development of the economy as is consistent with the aims and 
objectives of the Government, the Corporation may subsidise the 
rate of interest payable by the company on loans which the said 
company may take out in order to acquire additional assets to be 
employed in the company’s trade or business to the extent that the 
expenditure on such assets constitutes qualifying expenditure. 
(2) The subsidy referred to in subregulation (1) shall be such 
as to ensure that the rate of interest effectively borne by the 
qualifying company shall not be less than the rate established in 
accordance with regulation 8(2). 
(3) The subsidy provided by this regulation shall be in respect 
of loans taken to finance qualifying expenditure for which a soft 
loan in terms of regulation 8 has not been granted. 
(4) Loans which qualify for the interest rate subsidy 
contemplated by this regulation shall be loans provided by banks 
and other licensed financial institutions. 
(5) A company which carries on or intends to carry on the 
activities referred to in regulation 4(3)(f) or (j) either solely or 
together with any of the activities referred to in article 3(1)(a) and 
(b) of the Act shall, subject to the approval of the Corporation, be 
entitled to the benefit provided by this regulation 
Loan guarantees. 
Amended by: 
L.N. 228 of 2002. 
10. (1) Where the Corporation is satisfied that the activities of 
a qualifying company, being a company which qualifies as such in 
terms of article 3(1)(a) and (b) of the Act, may contribute to the 
development of the economy as is consistent with the aims and 
objectives of the Government, the Corporation may guarantee loans 
taken by the company to finance the acquisition of additional assets 
to be employed in the company’s trade or business to the extent that 
the expenditure on such assets constitutes qualifying expenditure. 
(2) The loan guarantee referred to in subregulation (1) shall 
not exceed 75% of the qualifying expenditure in respect of which 
the loan is provided. 
(3) For every loan guarantee provided, the Corporation shall 
keep sufficient funds on investment in order to cover the maximum

BUSINESS PROMOTION gS.L.325.06 23 
amount of capital and interest that the Corporation may be required 
to pay as guarantor at any point in time. 
(4) When acting as guarantor, the Corporation shall retain its 
rights to be subrogated in the rights of the lender once it effects a 
payment under the guarantee. 
(5) The Corporation shall only provide guarantees to banks 
and other licensed financial institutions. 
(6) A company which carries on or intends to carry on the 
activities referred to in regulation 4(3)(f) or (j) either solely or 
together with any of the activities referred to in article 3(1)(a) and 
(b) of the Act shall, subject to the approval of the Corporation, be 
entitled to the benefit provided by this regulation 
Small and 
medium-sized 
enterprises. 
11. (1) Where the Corporation is satisfied that a qualifying 
company which is a small or medium-sized enterprise requires the 
assistance of experts in a particular field, the Corporation may give 
such an enterprise a grant which shall not exceed 50% of the cost of 
the services of such experts: 
Provided that such a grant shall not be given in respect of 
services which are of a continuous nature or are provided 
periodically and relate to the enterprise’s usual operating 
expenditure such as routine consultancy services or advertising. 
(2) Where the Corporation is satisfied that a qualifying 
company which is a small or medium-sized enterprise may benefit 
from its participation in fairs and exhibitions, the Corporation may 
give such an enterprise a grant which shall not exceed 50% of the 
costs of renting, setting up and running the stand; provided that 
such a grant may only be provided in respect of the first 
participation of an enterprise in a certain fair or exhibition. 
Maximum aid for 
investment projects 
for SMEs. 
Amended by: 
L.N. 228 of 2002. 
12. The aggregate amount that a company may benefit from in 
respect of an investment project in terms of regulations 5, 8, and 9 
and articles 6, 7, 24B and 24C of the Act shall, where the company 
qualifies as a small or medium-sized enterprise, not exceed the 
higher of - 
(a) 65% of the qualifying expenditure pertaining to that 
investment project; or 
(b) 65% of the wage cost for the first twenty-four month 
period pertaining to individuals in respect of whom 
jobs were created as determined by regulation 5(7) to 
(11). 
Incentives for job 
creation. 
13. (1) Where the Corporation is satisfied that an enterprise 
has created a full-time job for a qualifying individual, the 
Corporation shall issue a certificate confirming that the said 
enterprise has created such job and is accordingly entitled to the 
benefits of this regulation. 
(2) An enterprise shall be considered as having created a job 
for the purpose of subregulation (1) when it employs a qualifying 
individual for a period of at least three years and where such 
employment is not in replacement of that of another individual 
whose employment was terminated by the enterprise; provided that

24 gS.L.325.06 BUSINESS PROMOTION 
in the case of a qualifying individual qualifying as such in terms of 
subregulation (13)(c), a job shall be considered as being created if 
the previous employer of the qualifying individual confirms in 
writing that the post vacated by the said individual need not be 
replaced. 
(3) The onus of proof that the employment of a qualifying 
individual is not in replacement of that of another individual whose 
employment was terminated by the enterprise shall lie with the 
enterprise. 
(4) Where an enterprise may be entitled to benefit from the 
provisions of this regulation in respect of the employment of a 
qualifying individual and in the six months immediately preceding 
the date on which it has employed that qualifying individual, the 
employment of another individual was terminated, whether or not 
such employment was terminated by the enterprise, the enterprise 
shall provide proof to the Corporation that the employment of the 
qualifying individual is not in replacement of the employment of 
any such other individual or that such other individual terminated 
his employment voluntarily. 
(5) For the purpose of determining whether a qualifying 
individual has been employed by an enterprise for the required 
three year period referred to in subregulation (2), it shall be deemed 
that the date of commencement of employment of an individual 
who has been employed by that enterprise in replacement of 
another individual, whose employment was terminated by the 
enterprise as a consequence of that individual’s gross misconduct 
or who terminated his employment with the enterprise voluntarily, 
shall be the date of commencement of employment of the 
individual whose employment was replaced; and it shall be 
incumbent on the enterprise to prove to the satisfaction of the 
Corporation that the individual so employed was in replacement of 
the individual whose employment was terminated as described in 
this subregulation. 
(6) The benefits which an enterprise shall be entitled to under 
the provisions of this regulation are the following: 
Cap. 123. 
(a) when the individual is a qualifying individual in terms 
of subregulation (13)(a) or (b), the enterprise shall, in 
computing its total income for the purposes of the 
Income Tax Act, in respect of a year of assessment, be 
entitled to deduct, in addition to the deductions 
allowed by the provisions of that Act, an additional 
65% of the wage cost of such a qualifying individual 
incurred by the enterprise in the year preceding the 
year of assessment in question: 
Provided that this additional deduction shall be due 
only in respect of the wage cost incurred in respect of 
the first twelve months of the qualifying individual’s 
employment and if, before the expiration of sixty days 
from the date on which the said qualifying individual 
was employed, the enterprise submits to the 
Corporation details of a training programme which the 
qualifying individual is to undergo and such

BUSINESS PROMOTION gS.L.325.06 25 
programme meets the approval of the Corporation, the 
additional deduction shall be increased to 100%; 
Cap. 123. 
(b) when the individual is a qualifying individual in terms 
of subregulation (13)(c), the enterprise shall, in 
computing its total income for the purpose of the 
Income Tax Act, in respect of a year of assessment, be 
entitled to deduct, in addition to the deductions 
allowed by the provisions of that Act, an additional 
150% of the wage cost of such qualifying individual 
incurred by the enterprise in the year preceding the 
year of assessment in question: 
Provided that this additional deduction shall be due 
only in respect of the wage cost incurred in respect of 
the first twenty-four months of the qualifying 
individual’s employment and if, before the expiration 
of sixty days from the date on which the said 
qualifying individual was employed, the enterprise 
submits details of a training programme which the 
qualifying individual is to undergo and such 
programme meets the approval of the Corporation, the 
additional deduction shall be increased to 200%. 
(7) For the purposes of subregulation (6) - 
(a) when the individual is a qualifying individual in terms 
of subregulation (13)(a), the wage cost in respect of 
which the additional deduction is due shall not exceed 
125% of an amount established by the Corporation in 
respect of that individual; 
(b) when the individual is a qualifying individual in terms 
of subregulation (13)(b), the wage cost in respect of 
which the additional deduction is due shall not exceed 
125% of the wage cost pertaining to such individual’s 
main employment during the last twelve months prior 
to the commencement of his employment with the 
enterprise claiming the said additional deduction; 
(c) when the individual is a qualifying individual in terms 
of subregulation (13)(c), the wage cost in respect of 
which the additional deduction is due shall not exceed 
125% of the wage cost pertaining to such individual’s 
main employment during the last twenty-four months 
prior to the commencement of his employment with 
the enterprise claiming the said additional deduction: 
Provided that, for the purposes of paragraphs (b) and (c), 
the wage cost in respect of which the additional deduction is due 
shall exclude any terminal benefits, benefits in respect of untaken 
leave, bonuses or any other payments which are not part of the 
basic emoluments payable to the qualifying individual. 
(8) For the purposes of this regulation "wage cost" shall mean 
the aggregate of the gross basic emoluments paid to a qualifying 
individual and the employer’s share of the social security 
contributions payable in respect of those gross emoluments.

26 gS.L.325.06 BUSINESS PROMOTION 
(9) An enterprise may, by application to the Corporation and 
in lieu of claiming a deduction in terms of subregulation (6)(b), opt 
to be given a cash grant to be calculated by multiplying 70% of the 
additional deduction referred to in that subregulation by the rates or 
rate of tax at which the enterprise was taxable in the year of 
assessment in respect of which it became entitled to such additional 
deduction if the qualifying individual has been employed for the 
required three year period referred to in subregulation (2). 
S.L. 210.01. 
(10) Where an enterprise creates a job for a qualifying 
individual who is registered as a disabled person with the 
Employment and Training Corporation in accordance with 
regulation 3 of the Persons with Disability (Registration and 
Appeal) Regulations, the entitlement to an additional deduction 
shall in all cases be of 200%. 
(11) The benefits provided by this regulation shall only be due 
to an enterprise on proof being shown that the qualifying individual 
has been employed for the required three year period. During the 
said three year period the collection of income tax which, but for 
the provisions of this regulation, would be payable by an enterprise 
shall be kept in abeyance and shall become due and payable only if 
the employment of the qualifying individual is terminated before 
the expiration of three years from the date of his employment, and 
in any such case the tax shall be due and payable within sixty days 
from the date of such termination of employment. 
(12) For the purpose of this regulation, an "enterprise" shall 
include the person who has claimed a deduction in accordance with 
the provisions of this regulation, persons which control or 
beneficially own, directly or indirectly, more than fifty per cent of 
such person, and persons which are controlled or beneficially 
owned, directly or indirectly, to the extent of more than fifty per 
cent by such person. 
(13) For the purposes of this regulation, a ‘qualifying 
individual’ shall mean an individual who either - 
(a) has been registered as unemployed for - 
(i) a minimum of one year prior to his employment 
with the enterprise, in the case of an individual 
who is either over forty years of age or is an 
individual to whom subregulation (10) is 
applicable; or 
(ii) a minimum of two years prior to his employment 
with the enterprise in the case of any other 
individual; 
(b) is identified by the Employment Re-structuring Unit 
within the Ministry for Economic Services as being an 
individual who may become redundant as a 
consequence of a restructuring programme undertaken 
by the enterprise with which he is employed; or 
(c) is employed with a public sector related entity and 
occupies a position as may be prescribed and, or 
identified by the Minister by notice in the Gazette.

BUSINESS PROMOTION gS.L.325.06 27 
(14) Subject to the approval of the Corporation, the provisions 
of this regulation shall also be applicable where an enterprise 
engages an individual who is a qualifying individual in terms of 
subregulation (13)(c) under a secondment arrangement between the 
enterprise and the employer of such individual, and in granting its 
approval the Corporation may impose such conditions as it may 
deem fit. 
Training 
assistance. 
Amended by: 
L.N. 228 of 2002. 
14. (1) Where the Corporation is satisfied that any individual 
employed by a qualifying company, being a company which 
qualifies as such in terms of article 3(1)(a) and (b) of the Act, is a 
full-time employee (hereinafter in this regulation referred to as the 
"employee") and that such employee is undergoing training in 
accordance with a training programme approved by the 
Corporation, a training grant may be given by the Corporation to 
the company, which grant shall not exceed - 
(a) where such grant is given to a company which 
qualifies as a small or medium-sized enterprise - 
(i) 45% of the eligible costs where the training 
provided is not general training; and 
(ii) 80% of the eligible costs where the training 
provided is general training; 
(b) where the grant is given to a company which does not 
qualify as a small or medium-sized enterprise - 
(i) 35% of the eligible costs where the training 
provided is not general training; and 
(ii) 60% of the eligible costs where the training 
provided is general training. 
(2) For the purposes of subregulation (1), the eligible costs 
are: 
(a) trainers’ fees and, or costs; 
(b) trainers’ and the employee’s travel expenses; 
(c) other current expenses, such as materials and supplies; 
(d) depreciation of tools and equipment, or a proportion 
thereof, to the extent that they are used for the training 
project; 
(e) cost of consultancy services with regard to the training 
project; 
(f) the personnel costs relating to the employee up to the 
amount of the total of the other eligible costs referred 
to in paragraphs (a) to (e): provided that only the hours 
during which the employee effectively participates in 
the training, after deduction of any productive hours or 
of their equivalent, may be taken into account. 
(3) In this regulation "general training" means training 
involving tuition which is not applicable only or principally to the 
employee’s present or future position in the company to which the 
grant is given, but provides qualifications and skills that are largely 
transferable to other enterprises or fields of work and thereby 
improving the employability of the employee.

28 gS.L.325.06 BUSINESS PROMOTION 
(4) The Corporation may, after having obtained the approval 
of the Minister, provide grants in excess of the limits set out in this 
regulation. 
(5) A company which carries on or intends to carry on the 
activities referred to in regulation 4(3)(f) or (j), either solely or 
together with any of the activities referred to in article 3(1)(a) and 
(b) of the Act shall, subject to the approval of the Corporation, be 
entitled to the benefit provided by this regulation. 
(6) The Corporation may provide a training grant in the form 
of a tax credit (hereinafter referred to as a "training tax credit") to a 
company which carries on or intends to carry on an activity which 
consists of the repair, improvement or maintenance of aircraft or of 
engines or equipment incorporated in such aircraft; and where the 
Corporation approves the granting of such a training tax credit, the 
provisions of subregulations (7) to (9) shall apply. 
(7) Without prejudice to the provisions of the proviso to 
subregulation (9), the amount of the training tax credit which may 
be approved by the Corporation shall not exceed the maximum 
amount of grants which the Corporation may give in terms of 
subregulation (1). 
(8) The amount of training tax credit which may be approved 
by the Corporation in respect of a company for a year of assessment 
shall be based on the eligible costs incurred by such company in the 
accounting period ending in the year preceding that year of 
assessment. 
(9) A company entitled to a training tax credit may benefit 
from that tax credit for year of assessment 2003 and subsequent 
years of assessment by deducting from the amount of income tax 
which is due on its chargeable income derived from its trade or 
business for a year of assessment the amount of the training tax 
credit and where the framing tax credit, for any year of assessment, 
exceeds the income tax payable by such a company for that year the 
excess shall be added to the training tax credit for the following 
year and deemed to be part of that training tax credit, or if there is 
no such training tax credit for that year, be deemed to be the 
training tax credit for that year and so on for subsequent years: 
Provided that so much of the training tax credit which is not so 
utilised at the end of any year and which is therefore carried 
forward to be added to the training tax credit of the following year 
of assessment and deemed to be part of that training tax credit or to 
be deemed to be the training tax credit for that year, shall be 
increased by seven per cent per annum or by such other rate as may 
be further prescribed by the Minister by notice in the Gazette; and 
where any part of the training tax credit as so increased is again not 
utilised so much of it as is not utilised shall be further increased by 
the said percentage and carried forward to the following year and 
so on for subsequent years: 
Provided further that a training tax credit may only be 
deducted from the tax due on chargeable income which is derived 
from any of the activities referred to in subregulation (6).

BUSINESS PROMOTION gS.L.325.06 29 
Income tax kept in 
abeyance. 
Cap. 372. 
15. Unless otherwise provided in these regulations, where the 
entitlement of a company to the benefits provided by the Act or by 
these regulations for a year of assessment cannot be established 
only by reason of the fact that not enough time has elapsed for the 
purpose of determining whether certain conditions have been 
satisfied, the collection of the income tax which, but for the 
provisions of the Act and these regulations, would be payable by 
such company, shall be kept in abeyance until the expiration of six 
months from the date on which such entitlement can be established, 
and in the event that the said conditions are not satisfied and 
therefore the income tax kept in abeyance becomes payable, the 
date on which it shall be due for payment for the purposes of the 
Income Tax Management Act shall be the day immediately 
following the last day on which it shall be kept in abeyance as 
aforesaid and the fact that such tax has become payable shall not be 
considered to be an omission for the purpose of the Income Tax 
Acts. 
Approval in 
writing. 
16. On granting its approval for any purpose under these 
regulations, the Corporation shall confirm its approval in writing 
setting out the conditions to be satisfied by a company or 
enterprise, as the case may be, and the company’s or enterprise’s 
entitlement to the benefits provided by these regulations shall be 
conditional on the production of such written approval by the 
company or enterprise. 
Application. 17. Any application required to be submitted to the 
Corporation in order to benefit from any of the provisions of the 
Act or of these regulations shall be in such form and contain such 
particulars as the Corporation may require. 
Maximum benefit 
for investment 
projects. 
18. (1) The aggregate amount that a company may benefit 
from in respect of an investment project in terms of regulations 5, 
8, and 9 and articles 6, 7, 24B and 24C of the Act shall not, where 
the company does not qualify as a small or medium-sized 
enterprise, exceed the higher of - 
(a) 50% of the qualifying expenditure pertaining to that 
investment project; or 
(b) 50% of the wage cost for the first twenty-four month 
period pertaining to individuals in respect of whom 
jobs were created as determined by regulation 5(7) to 
(11). 
(2) The benefit referred to in subregulation (1) and in 
regulation 12 shall be the net benefit enjoyed by the company after 
deduction of any taxes payable by the company as a result of 
receiving any assistance under the said regulations and articles, and 
where the benefit is enjoyed by such company over a number of 
years the benefit shall be discounted to present value at a discount 
rate equivalent to the percentage referred to in regulation 5(12) and 
using such methods as shall be determined by the Corporation. 
(3) In determining whether the provisions of this regulation 
and of regulation 12 are or have been satisfied, where the terms of 
any soft loan or interest rate subsidy granted in terms of regulations 
8 or 9 are altered or an amount of any soft loan, or part thereof, is

30 gS.L.325.06 BUSINESS PROMOTION 
repaid before the due date (hereinafter collectively referred to as an 
"alteration"), if as a consequence of any such alteration - 
(a) the amount which could have been claimed by a 
company in terms of article 7 of the Act or in terms of 
regulation 5 exceeds the amount actually claimed, the 
company shall be entitled to claim such additional 
amount, under that article or regulation, for the 
purpose of determining its chargeable income or tax 
payable, as the case may be, for the year of 
assessment, the tax return filing date of which next 
follows the date on which any such alteration is made; 
(b) a company’s chargeable income or income tax payable 
for any year of assessment is in excess than that which 
it has declared in its income tax return or paid for that 
year of assessment, this fact shall not be considered as 
an omission for the purposes of the Income Tax Acts; 
and any tax which becomes payable as a consequence 
of any such alteration shall be deemed to be income 
tax payable for the year of assessment, the tax return 
filing date of which next follows the date on which any 
such alteration is made. 
Certificate 
confirming 
fulfilment of 
conditions. 
19. A certificate issued by the Corporation confirming that any 
provision of the Act or of these regulations have been complied 
with or that the computation of any incentive provided by the Act 
or by these regulations is correct shall, without prejudice to any 
other proof available to a company or enterprise, be conclusive 
evidence of the matters referred to in the certificate. 
Copy of income 
tax returns and 
notice to the 
Corporation. 
Amended by: 
L.N. 228 of 2002. 
20. (1) A company which claims a benefit provided by the Act 
or these regulations in year of assessment 2001 or subsequent years 
of assessment, shall furnish the Corporation with a copy of every 
income tax return, audited financial statements, TIFD documents, 
and any other information or documents concerning its chargeable 
income derived from its trade or business for any year of 
assessment in which it claims a benefit, within three months from 
the earlier of: 
(i) the last date on which it is obliged to file such 
returns and documents with the Department of 
Inland Revenue; or 
(ii) the date on which it filed its such returns and 
documents with the Department of Inland 
Revenue; 
and where a company submits any further returns, adjustments or 
any other information pertaining to the aforementioned returns or 
documents, it shall also furnish the Corporation with a copy thereof 
within three months of it having provided the Inland Revenue with 
such further returns, adjustments or other information. 
(2) A qualifying company which has claimed any benefit 
provided by or under the Act in respect of year of assessment 2000 
shall furnish the Corporation with a copy of its income tax return 
for year of assessment 2000 by not later than the 30th June 2001 or

BUSINESS PROMOTION gS.L.325.06 31 
such later date as the Corporation may determine. 
(3) A qualifying company which intends to benefit from any of 
the incentives provided by articles 4, 5 and 5A of the Act in any 
year subsequent to year of assessment 2000 shall notify the 
Corporation of such intention by the 30th June, 2001, or such later 
date as the Corporation may determine, specifying: 
(a) the likely years of assessment in respect of which it 
intends to qualify for the benefit provided by article 4 
of the Act or for the benefit provided by article 5 of the 
Act by virtue of article 5(6)(b); 
(b) the likely number of years of assessment in respect of 
which it intends to qualify for the benefits provided by 
article 5A of the Act or the incentive provided by 
article 5 of the Act, other than by virtue of article 
5(6)(b) of the Act; 
and where a qualifying company specifies that it intends to so 
qualify, such company may, and if requested by the Corporation 
shall, provide statements, business plans or financial projections in 
support of its intention to so qualify. 
(4) A qualifying company which intends to benefit from any of 
the incentives provided by articles 4, 5 and 5A of the Act in any 
year subsequent to year of assessment 2002 shall, irrespective of 
the fact that it has already notified the Corporation in terms of 
subregulation (3), notify the Corporation of such intention not later 
than thirty (30) days from the 9th August, 2002, or such later date 
as may be determined by the Corporation, by completing the form 
set out in the schedule, which is published in the English language 
only, and any company which fails to notify the Corporation as 
herein provided shall forfeit its right to be eligible to the benefits 
provided by those articles. 
(5) A qualifying company may only be entitled to the 
incentives provided by articles 4, 5 and 5A of the Act, in any year 
of assessment subsequent to year of assessment 2002, only as 
indicated by it in its notification to the Corporation in terms of 
subregulation (4). 
Database of 
assistance 
provided. 
21. The Corporation shall keep a database of all assistance 
provided to, or claimed by, companies and enterprises in order to 
enable it to - 
(a) verify whether the provisions of the Act and of these 
regulations have been complied with; 
(b) provide the State Aid Monitoring Board with such 
information as it may require; and 
(c) inform the Department of Inland Revenue whether the 
benefits claimed in terms of the Act and these 
regulations have been properly calculated. 
Grants not taxable. 
Amended by: 
L.N. 98 of 2003. 
22. (1) Benefits and grants provided in terms of regulations 8, 
9, 11, 13 and 14 or by the Institute for the Promotion of Small 
Enterprises Limited shall be exempt from income tax and the 
provisions of article 36 of the Act shall apply with regard to such 
receipts as the provisions of that article are applicable to the grants

32 gS.L.325.06 BUSINESS PROMOTION 
referred to in subarticle (4)(b) of that article. 
(2) For the purposes of subregulation (1), the benefit provided 
by regulations 8 and 9 shall be the difference between the interest 
charged by the Corporation and the interest which is normally 
charged by a commercial bank in Malta as determined by the 
Corporation and the company benefiting from these regulations 
shall be entitled to deduct the benefit accruing to it in an 
accounting period from its chargeable income of that accounting 
period. 
Benefits to certain 
partnerships inure 
to partners. 
23. Where any benefit provided by these regulations or by the 
Act is due to a partnership and, in accordance with the Income Tax 
Acts, the partners thereof and not the partnership itself are 
assessable to tax on any income of such partnership, any such 
benefit provided by these regulations or by the Act to a partnership 
shall be due to the partners of any such partnership. 
Certain 
partnerships. 
Amended by: 
L.N. 228 of 2002. 
Cap. 123. 
24. A partnership, other than a partnership en commandite the 
capital of which is divided into shares shall, for the purposes of 
article 15 of the Act and article 56(20) of the Income Tax Act, be 
considered to be a company, as defined in that Act, and the 
provisions of the said subarticle shall be applicable to such a 
partnership in like manner and to the same extent as it would have 
been applicable to a company which has as its shareholders the 
partners of the said partnership having equivalent rights in the 
company as they have in the partnership. 
Qualifying 
companies. 
25. Where a provision in these regulations or in the Act refers 
to a qualifying company such company shall, except for a company 
the activities of which include the activities referred to in 
regulation 4(3)(h), include a company which qualifies for the 
incentives provided by regulations 4 or 5, and such company shall 
be entitled to the benefit provided by any such provision. 
Examination of 
records. 
Amended by: 
L.N. 228 of 2002. 
26. Where a benefit has been provided in terms of these 
regulations or the Act to a company or enterprise, the Corporation 
may - 
(a) from time to time make or cause to be made such 
examination of books, documents, premises and all 
other things and matters of that company or enterprise 
whatsoever as may be necessary to ensure that the 
assistance is being applied for the purpose for which it 
had been made; and 
(b) request such financial statements from the company or 
the enterprise as it may require, to be submitted 
quarterly or at shorter intervals at the discretion of the 
Corporation. 
Deferment of tax 
investment 
incentives. 
Amended by: 
L.N. 228 of 2002. 
27. A company which is entitled to the benefit provided by 
regulation 5 may, at its option, defer the claiming of the benefit, or 
part thereof, to which it may be entitled in any year of assessment, 
to one or more subsequent years of assessment and in such case the 
benefit so deferred and claimed in any such subsequent year of 
assessment shall be deemed to be part of the benefit, or the benefit, 
to which such company is entitled to for that year; provided that 
any benefit provided by regulation 5 which is so deferred shall not

BUSINESS PROMOTION gS.L.325.06 33 
be increased by the percentage referred to in the proviso to 
regulation 5(12). 
Entitlement in case 
of waiver of certain 
incentives. 
Substituted by: 
L.N. 228 of 2002. 
Amended by: 
L.N. 128 of 2003. 
28. (1) A qualifying company, as defined in the Act, whose 
activities are not qualifying activities as set out in regulation 4(3) 
and: 
(a) which, in any one of the five consecutive years of 
assessment including and ending with year of 
assessment 2002 benefited from the provisions of 
articles 4, 5, or 5A of the Act, such that at least 10% of 
its chargeable income derived from its trade or 
business, for any of those years of assessment, 
reckoned before taking into consideration the 
provisions of the said articles, has been exempted 
from, or subjected to reduced rates of income tax in 
terms of those articles; or 
(b) which is constituted in terms of Maltese law, or 
registered as an oversea company with the Registrar of 
Companies, on or after the 1st November 2000 but 
before the 12th June 2001, and which would have been 
entitled to the benefits provided by articles 4, 5 or 5A 
of the Act but for the provisions of articles 4(6), 5(7) 
and 5A(6) of the Act, and which, had it so qualified, 
would have had at least 10% of its chargeable income 
derived from its trade or business for years of 
assessment 2002 or 2003, reckoned before taking into 
consideration the provisions of the said articles, 
exempt from, or subjected to reduced rates of income 
tax in terms of those articles, 
shall qualify for the benefits provided by regulations 4 and 5 if it 
satisfies the other relevant conditions to qualify for the benefits 
provided by those regulations and if, where applicable, it revokes, 
by 30 April 2003 in terms of article 34(2) of the Act, its right to be 
eligible for the benefits provided by articles 4, 5 and 5A of the Act 
with effect from year of assessment 2004 or any previous year of 
assessment; and the trading activities of such a qualifying company 
shall, as regards such company only, be deemed to be activities 
referred to in regulation 4(3): 
Provided that the provisions of this regulation shall not be 
applicable in respect of a qualifying company for a year of 
assessment if, in the accounting period ending in the year preceding 
that year of assessment, there has been a material change in the 
trading activities of such qualifying company: 
Provided further that a company which would have been 
entitled to benefit for the aforementioned incentives in the manner 
set out in this subregulation in any of the aforementioned years of 
assessment but did not so benefit, or would not have so benefited, 
solely due to the fact that it did not have any chargeable income or 
did not claim the benefit, shall be deemed to be a company to which 
this regulation refers: 
Provided further that for the purpose of this subregulation 
the base period profits referred to in article 5(2) of the Act shall be

34 gS.L.325.06 BUSINESS PROMOTION 
deemed to be zero. 
(2) A certificate issued by the Corporation confirming that a 
company satisfies the provisions of subregulation (1) or that there 
has been no material change in a company's trade or business, shall 
be conclusive evidence of those facts. 
Dates from which 
certain provisions 
of the Act are no 
longer applicable. 
Amended by: 
L.N. 228 of 2002; 
L.N. 98 of 2003. 
29. (1) The date referred to in - 
(a) the proviso to article 3(2) of the Act; 
(b) the fourth proviso to article 3(8) of the Act; 
(c) article 4(6) of the Act; 
(d) article 5(7) of the Act; 
(e) article 5A(6) of the Act; 
(f) the third proviso to article 15 of the Act; 
(g) article 16(11) of the Act; 
(h) article 23(6) of the Act, but only as regards paragraphs 
(a) and (b) thereof; and 
(i) article 24A(6) of the Act, 
shall be the 1 November, 2000. 
(2) The date referred to in article 18(7) of the Act shall be the 
22nd March 2001. 
(3) The year of assessment referred to in - 
(a) article 11(5) of the Act; 
(a) article 12(4) of the Act; 
(b) the third proviso to article 13 of the Act; and 
(c) the proviso to article 14 of the Act, 
shall be year of assessment 2002. 
(4) The date referred to in - 
(a) article 10(3) of the Act; 
(b) article 19(8) of the Act; 
(c) article 20(4) of the Act; and 
(d) article 23(6) of the Act, but only as regards paragraph 
(c) thereof, 
shall be the 1 January, 2002. 
(5) The year of assessment referred to in article 8(8) of the Act 
shall be year of assessment 2002. 
(6) Notwithstanding the provisions of subregulation (3), the 
year of assessment referred to in article 11(5) of the Act shall be 
year of assessment 2001. 
Privatisations. 
Added by: 
L.N. 228 of 2002. 
Amended by: 
L.N. 98 of 2003. 
30. (1) Where a company was, on or after the 1st November, 
2000, controlled at least as to fifty per cent, directly or indirectly, 
by Government and not less than fifty per cent of the shares of the 
company were owned, directly or indirectly, by Govemment, if all 
such shares are acquired by any person or persons not under

BUSINESS PROMOTION gS.L.325.06 35 
Government control, and such company is entitled to the benefits 
provided by regulations 4 and 5: 
(a) the company shall be deemed to be a company to 
which regulation 4(2)(b) refers and regulation 4(8) 
shall not apply in its regard; and 
(b) assets owned by the company as at the date on which 
the said shares are acquired, shall be deemed to 
constitute qualifying expenditure incurred by such 
company as on that date at a value which shall be 
determined by the Corporation: 
Provided that the provisions of this subregulation shall not 
apply where the provisions of subregulation (2) are applicable. 
(2) Where a company (hereinafter referred to as the "first 
company") which was entitled to an exemption from income tax, 
was, on or after the 1st November, 2000, fully controlled and 
owned, directly or indirectly, by Government and for the purpose 
of privatising the operations carried out by such company, the 
business of such company together with such assets, liabilities, 
rights and obligations as is expedient, are transferred to another 
company (hereinafter referred to as the "second company") which 
is also fully controlled and owned by Government, and the second 
company is a company that is entitled to the benefits provided by 
regulations 4 and 5: 
(a) the second company shall be deemed to be a company 
to which regulation 4(2)(b) refers and regulation 4(8) 
shall not apply in its regard; and 
(b) the cost at which the second company acquired the 
assets from the first company shall be deemed to 
constitute qualifying expenditure: 
Provided that the provisions of this subregulation shall also 
apply where any assets, liabilities, rights and obligations, are for 
the purpose of privatisation, transferred to the second company by 
any entity or corporation which is fully owned, directly or 
indirectly, by the Government, so long as the second company is 
entitled to the benefits provided by regulations 4 and 5. 
Tax credit for large 
company. 
Added by: 
L.N. 98 of 2003. 
Amended by: 
L.N. 128 of 2003. 
31. (1) Where a qualifying company - 
(a) does not qualify as a small or medium-sized 
enterprise; and 
(b) (i) is entitled to any of the benefits provided by 
articles 4, 5 or 5A of the Act subsequent to year 
of assessment 2003 and waives, in terms of 
article 34(2) of the Act its right of entitlement to 
benefit from the provisions of these articles with 
effect from year of assessment 2004; or 
Cap. 334 
(ii) is entitled to any of the benefits provided by 
articles 18 or 20 of the Malta Freeports Act in 
any year of assessment subsequent to year of 
assessment 2004 and waives, in terms of article 
27(5) of the said Act its right of entitlement to 
benefit from the said provisions of article 18 of

36 gS.L.325.06 BUSINESS PROMOTION 
that Act with effect from year of assessment 
2004 and its right of entitlement to benefit from 
the provisions of article 20 of that Act with 
effect from 1st January 2003; or 
(c) (i) had waived its entitlement to the benefits 
provided by articles 4, 5 and 5A of the Act and 
as a result of such waiver became entitled to the 
benefits provided by regulations 4 and 5; or 
Cap. 334. 
(ii) pursuant to a change in legislation is no longer 
entitled to benefit from the provisions of articles 
4, 5 or 5A of the Act or of articles 18 or 20 of 
the Malta Freeports Act, 
such company shall, subject to the approval of the Corporation, be 
entitled to the benefits provided by regulations 4 and 5 and to 
utilize the tax credits provided by regulations 32 to 35, as reduced 
by regulation 36, in accordance with the provisions of regulation 
37; and for the purpose of regulation 4, such company shall, for the 
years of assessment in respect of which it can utilize the 
aforementioned tax credits in accordance with regulation 37, be 
deemed to be a company to which regulation 4(2)(b) refers. 
(2) A company shall be eligible to qualify for the benefits 
provided by any of the regulations referred to in subregulation (1) 
if it has been determined that it is so eligible by the Corporation. 
(3) On being satisfied that a company is eligible to any of the 
said regulations, the Corporation shall provide the said company 
with a certificate setting out therein the tax credits and their 
respective amounts to which the company is so entitled. 
(4) A certificate issued by the Corporation in terms of 
subregulation (3) shall, without prejudice to any other proof 
available to the company, be conclusive evidence of the matters 
stated therein. 
(5) A company wishing to avail itself of the said regulations 
shall apply for a determination referred to in subregulation (2) by 
submitting an application to the Corporation. 
(6) The provisions of article 25 of the Act shall, as far as is 
applicable, apply to the incentives provided by this regulation and 
to regulations 32 to 37. 
Investment credits. 
Added by: 
L.N. 98 of 2003. 
32. (1) A company which has been determined by the 
Corporation as having satisfied the conditions set out in regulation 
31(1) and in this regulation shall be entitled to an investment credit 
which shall be equal to a percentage of the expenditure incurred by 
such company on qualifying expenditure on or after the 1st January 
1995 up to 31st December 2006 and for this purpose the qualifying 
expenditure incurred up to 31st December 2001 shall be multiplied 
by 1.07n (1.07 to the power of "n") where "n" is a number arrived at 
by deducting from 2002 the year in which the expenditure was 
incurred: 
Provided that the qualifying expenditure shall be that which 
is incurred under a programme approved by the company by the

BUSINESS PROMOTION gS.L.325.06 37 
31st December 2002 and notified to the Corporation by such date as 
it shall determine. 
(2) The percentage referred to in subregulation (1) shall be: 
Cap. 334. 
(a) 75%, where the company was entitled to any of the 
benefits provided by articles 4, 5, or 5A of the Act or 
by articles 18 or 20 of the Malta Freeports Act on or 
before the 31st December 1999; 
Cap. 334. 
(b) 50%, where the company became entitled to any of the 
benefits provided by articles 4, 5 or 5A of the Act or 
by articles 18 or 20 of the Malta Freeports Act on or 
after the 1st January 2000. 
Research and 
development 
credits. 
Added by: 
L.N. 98 of 2003. 
Amended by: 
L.N. 128 of 2003. 
33. (1) A company which has been determined by the 
Corporation as having satisfied the conditions set out in regulation 
31(1) and in this regulation shall be entitled to a research and 
development tax credit which shall be equal to a percentage of the 
eligible expenditure incurred by such company on or after 1st 
January 1995 up to 31st December 2006 and for this purpose the 
eligible expenditure incurred up to 31st December 2001 shall be 
multiplied by 1.07n (1.07 to the power of "n") where "n" is a 
number arrived at by deducting from 2002 the year in which the 
expenditure was incurred: 
Provided that the eligible expenditure shall be that which is 
incurred under a programme approved by the company by the 31st 
December 2002 and notified to the Corporation by such date as it 
shall determine. 
(2) The percentage referred to in subregulation (1) shall be: 
(a) 75% where the expenditure has been incurred on 
fundamental research activities; 
(b) 60% where the expenditure has been incurred on 
industrial research activities; 
(c) 35% where the expenditure has been incurred on 
development activities; 
(d) 75% where the expenditure has been incurred on 
studies preparatory to industrial research activities; 
(e) 60% where the expenditure has been incurred on 
studies preparatory to development activities. 
(3) In this regulation: 
(a) "fundamental research activities" means an activity or 
activities designed to broaden scientific and technical 
knowledge not linked to industrial or commercial 
objectives; 
(b) "industrial research activities" means an activity or 
activities consisting of critical investigation aimed at 
the acquisition of knowledge with the objective that 
such knowledge may be useful in developing new 
products, processes or services or in bringing about a 
significant improvement in existing products, 
processes or services;

38 gS.L.325.06 BUSINESS PROMOTION 
(c) "development activities" means an activity or 
activities consisting of the shaping of the results of 
industrial research into a plan, arrangement or design 
for new, altered or improved products, processes or 
services, whether they are intended to be sold or used - 
including the creation of initial prototypes which could 
not be us ed commercially and the conceptual 
formulation and design of products, processes or 
services and initial demonstration projects or pilot 
projects provided that such products cannot be 
converted or used for industrial applications or 
commercial exploitation - but excluding the routine or 
periodic changes made to products, production lines, 
manufacturing processes, existing services and other 
operations in progress even if such changes may 
represent improvements. 
(4) The eligible expenditure shall consist of: 
(a) personnel expenses comprising all emoluments paid 
for services rendered by researchers, technicians and 
other employees attributable to such employees’ time 
spent on the research activity and including the 
employer’s share of social security contributions 
attributable to such emoluments; 
(b) the costs of instruments, plant and machinery and land 
and buildings used solely for the research activity; 
(c) the cost of renting instruments, plant and machinery 
and land and buildings for the period of time used for 
the research activity; 
(d) the cost of consultancy and equivalent services used 
exclusively for the research activity, including the 
research, technical knowledge and patents bought from 
outside sources; 
(e) additional overheads incurred directly as a result of the 
research activity; 
(f) other expenses, including costs of materials, supplies 
and similar products, incurred directly as a result of 
the research activity. 
Training credits. 
Added by: 
L.N. 98 of 2003. 
34. (1) A company which has been determined by the 
Corporation as having satisfied the conditions set out in regulation 
31(1) and in this regulation shall be entitled to a training credit 
which shall be equal to a percentage of the eligible costs incurred 
by such company on or after 1st January 1995 up to 31st December 
2006 and for this purpose the eligible costs incurred up to 31st 
December 2001 shall be multiplied by 1.07n (1.07 to the power of 
"n") where "n" is a number arrived at by deducting from 2002 the 
year in which the expenditure was incurred: 
Provided that the qualifying expenditure shall be that which 
is incurred under a programme approved by the company by the 
31st December 2002 and notified to the Corporation by such date as 
it shall determine.

BUSINESS PROMOTION gS.L.325.06 39 
(2) The percentage referred to in subregulation (1) shall be one 
of the percentages set out in regulation 14(1)(b) depending on 
whether the training qualifies as general training. 
(3) The eligible costs referred to in subregulation (1) shall be 
the costs set out in regulation 14(2). 
(4) For the purpose of calculating the training credit provided 
by this regulation, the term "general training" shall have the 
meaning assigned to it by regulation 14(3). 
Environmental 
investment credits. 
Added by: 
L.N. 98 of 2003. 
Amended by: 
L.N. 128 of 2003. 
35. (1) A company which has been determined by the 
Corporation as having satisfied the conditions set out in regulation 
31(1) and in this regulation shall be entitled to an environmental 
credit which shall be equal to 60% of the eligible expenditure 
incurred by such company on or after 1st January 1995 up to 31st 
December 2006 and for this purpose the eligible expenditure 
incurred up to 31st December 2001 shall be multiplied by 1.07n 
(1.07 to the power of "n") where "n" is a number arrived at by 
deducting from 2002 the year in which the expenditure was 
incurred: 
Provided that the eligible expenditure shall be that which is 
incurred under a programme approved by the company by the 31st 
December 2002 and notified to the Corporation by such date as it 
shall determine. 
(2) The eligible expenditure shall consist of the expenditure set 
out in subregulation (3): 
(a) where such expenditure is incurred for the purpose of 
reducing pollution and nuisances or to adopt 
production methods with a view to protecting the 
environment; and 
(b) to the extent that the company did not incur such 
expenditure for the purpose of it complying with any 
applicable laws or regulations. 
(3) The expenditure referred to in subregulation (2) shall be: 
(a) the acquisition of land which is strictly necessary to 
meet environmental objectives; 
(b) the acquisition, development or construction of 
buildings or structures, plant and machinery; 
(c) the acquisition or development of technology or knowhow, 
which is - 
(i) a depreciable asset in accordance with generally 
accepted accounting principles; 
(ii) acquired on market terms from a person in which 
the company has no direct or indirect control; 
(iii) included in the assets of the company which 
retains ownership or use or both such ownership 
and use of the intangible asset for a period of 
five years or a shorter period if the intangible 
assets are technically out of date before the 
expiry of this five year period:

40 gS.L.325.06 BUSINESS PROMOTION 
Provided that should such intangible assets be sold before 
the expiration of five years from the date of their acquisition or 
development completion the sales proceeds shall be deducted from 
the amount of the eligible expenditure. 
Deductions from 
tax credits. 
Added by: 
L.N. 98 of 2003. 
Amended by: 
L.N. 128 of 2003. 
Cap. 334. 
36. (1) The aggregate of the tax credits a company may be 
entitled to in terms of regulations 32 to 35 shall be reduced by the 
benefits accruing to that company, on or after the 1st January, 2001, 
as a consequence of it having availed itself of any of the benefits 
provided by articles 4, 5, 5A, 6, 7, 16, 19, 20 or 24C of the Act or 
by regulations 5, 8, 9 or 14 or by articles 18 or 20 of the Malta 
Freeports Act and the benefits accruing to such company shall be 
calculated as follows: 
Cap. 334. 
(a) in the case of an income tax benefit provided by 
articles 4, 5, 5A, 6 and 7 of the Act and by regulations 
5 and 14 and by article 18 of the Malta Freeports Act, 
the benefit accruing shall be the amount of income tax 
that would have been borne by the company for a year 
of assessment in the absence of the provisions of the 
above mentioned articles and regulations, less the 
amount of income tax actually borne by the company 
for that year of assessment and the result of this 
subtraction shall, for each year of assessment, be 
multiplied by 1.07n (1.07 to the power of "n") where 
"n" is a positive number arrived at by deducting from 
2002 the year of assessment in which the benefit was 
availed of: 
Provided that where the profits brought to charge 
to tax in year of assessment 2002 or 2003 relate to an 
accounting period which commenced prior to the 1st 
January 2001, the benefit accruing from the 1st 
January 2001 up to the end of that accounting period 
shall be determined by dividing the result of the 
calculation hereinabove described for that accounting 
period by the total number of days comprised in that 
accounting period and multiplying the result by the 
number of days in that accounting period which are in 
2001and 2002 as applicable; 
(b) in the case of a benefit provided by article 16 of the 
Act, the benefit shall be arrived at by multiplying the 
after-tax interest saved from the soft loan facility in 
each year up to 31 st December 2002 by 1.07n (1.07 to 
the power of "n") where "n" is a number arrived at by 
deducting from 2002 the year in which the after-tax 
interest saving was obtained and discounting the aftertax 
interest saving to be obtained in each year after 
31st December 2002 by the discount factor 1/1.07n (1 
divided by 1.07 to the power of "n") where "n" is a 
number arrived at by deducting 2002 from the year in 
which the after-tax interest saving is to be obtained; 
and the after-tax interest saved shall be calculated by 
multiplying the interest saved by the percentage 
(100%- x%) where x% is the rate of income tax

BUSINESS PROMOTION gS.L.325.06 41 
applicable to the company in the absence of the 
provisions of the articles and regulations referred to in 
paragraph (a); 
(c) in the case of a grant provided by articles 19, 20 and 
24C of the Act and by regulation 14, the benefit shall 
be the amount of the grant received in each year up to 
31st December 2002, which amount shall be 
multiplied by 1.07n (1.07 to the power of "n") where 
"n" is a number arrived at by deducting from 2002 the 
year in which the grant was received; 
Cap. 334. 
(d) in the case of the duty exemption provided by article 
20 of the Malta Freeports Act, the benefit shall be the 
amount of duty exempted, which amount shall be 
multiplied by 1.07n (1.07 to the power of "n") where 
"n" is a number arrived at by deducting from 2002 the 
year in which the exempted duty would have been 
payable; 
(e) in the case of a benefit provided by regulations 8 and 
9, the benefit shall be arrived at by multiplying the 
tax-free benefit obtained in each year up to 31st 
December 2002 by 1.07n (1.07 to the power of "n") 
where "n" is a number arrived at by deducting from 
2002 the year in which the tax free benefit was 
obtained and discounting the tax-free benefit to be 
obtained in each year after 31 st December 2002 by the 
discount factor 1/1.07n (1 divided by 1.07 to the power 
of "n") where "n" is a number arrived at by deducting 
2002 from the year in which the tax-free benefit is to 
be obtained. 
(2) Where the sum of the deductions set out in this regulation 
exceeds the amount of the tax credits calculated in accordance with 
the provisions of regulations 32 to 35, the amount of the tax credits 
shall be deemed to be zero. 
(3) A deduction in respect of benefits availed of pursuant to 
articles 19 or 20 of the Act or regulation 14 shall only be made if 
the relevant company claims training credits pursuant to regulation 
34.
(4) A deduction in respect of the benefits availed of pursuant to 
articles 6, 7 or 16 of the Act or regulations 5, 8 or 9 shall only be 
made if the relevant company claims credits pursuant to regulations 
32, 33 or 35 in respect of expenditure on which it was granted 
benefits under articles 6, 7 or 16 of the Act or regulations 5, 8 or 9. 
Utilization of tax 
credits. 
Added by: 
L.N. 98 of 2003. 
Amended by: 
L.N. 128 of 2003. 
37. (1) With effect from year of assessment 2004, a company 
which is entitled to any of the benefits provided by regulations 32 
to 35 as reduced by regulation 36 (hereinafter in this regulation 
collectively referred to as the "tax credits") shall be entitled to 
utilise the tax credits only as described below: 
(a) where the company became so entitled by virtue of it 
having been entitled to the incentive provided by 
article 4 of the Act, it shall be entitled to deduct from

42 gS.L.325.06 BUSINESS PROMOTION 
the amount of income tax which is due on its 
chargeable income, derived from its trade or business, 
for the consecutive years of assessment, forming part 
of the original ten consecutive years of assessment 
referred to in article 4(1) of the Act, subsequent to 
year of assessment 2003, the amount of the tax credits 
and with effect from year of assessment 2004 and 
subsequent years of assessment where the tax credits 
exceed such income tax payable by such a company 
for any of such years, the excess shall be increased by 
the percentage referred to in the first proviso to 
regulation 5(12) and the amount so increased shall be 
the amount which the company shall be entitled to 
deduct from the amount of income tax which is due on 
its chargeable income, derived from its trade or 
business, for the remaining consecutive years of 
assessment above mentioned; 
(b) where the company became so entitled by virtue of it 
having been entitled to the incentive provided by 
article 5 of the Act, it shall be entitled to deduct from 
the whole or a proportion of the amount of income tax 
due on its chargeable income, derived from its trade or 
business for the remaining years of assessment, the 
company is still entitled to benefit from the incentive 
provided by the said article 5 subsequent to year of 
assessment 2003, the amount of the tax credits and 
with effect from year of assessment 2004 and 
subsequent years of assessment where the tax credits 
exceed such income tax payable by such a company 
for any of such years, the excess shall be increased by 
the percentage referred to in the first proviso to 
regulation 5(12) and the amount so increased shall be 
the amount which the company shall be entitled to 
deduct from the whole or a proportion of the amount of 
income tax which is due on its chargeable income, 
derived from its trade or business, for the remaining 
years of assessment above mentioned; and the "whole 
or a proportion of the amount of income tax due" shall 
be determined by multiplying the total income tax due 
on the company’s chargeable income, derived from its 
trade or business, by a percentage which shall be 
calculated by dividing the income tax due in any year 
of assessment, as may be determined by the company, 
between year of assessment 1995 and year of 
assessment 2003, in respect of which the company 
qualified for the incentive provided by article 5 of the 
Act, by the income tax that would have been payable 
by the company in the absence of that incentive, and 
deducting the fraction so obtained from the integer one 
(1), and multiplying the result by 100: 
Provided that where a company demonstrates to 
the satisfaction of the Corporation that the percentage 
as calculated in accordance with the above provisions

BUSINESS PROMOTION gS.L.325.06 43 
is materially different from that which the company 
reasonably expects, the Corporation may approve a 
different percentage based on the evidence provided 
by the company; 
(c) where the company became so entitled by virtue of it 
having been entitled to the incentive provided by 
article 5A of the Act, it shall be entitled to deduct from 
the whole or a proportion of the amount of income tax 
due on its chargeable income, derived from its trade or 
business for the remaining years of assessment, the 
company is still entitled to benefit from the incentives 
provided by the said article 5A subsequent to year of 
assessment 2003, the amount of the tax credits and, 
with effect from year of assessment 2004 and 
subsequent years of assessment, where the tax credits 
exceed such income tax payable by such a company 
for any of such years the excess shall be increased by 
the percentage referred to in the first proviso to 
regulation 5(12) and the amount so increased shall be 
the amount which the company shall be entitled to 
deduct from the whole or a proportion of the amount of 
income tax which is due on its chargeable income, 
derived from its trade or business, for the remaining 
years of assessment above mentioned; and the "whole 
or a proportion of the amount of income tax due" shall 
be determined by multiplying the total income tax due 
on the company’s chargeable income, derived from its 
trade or business, by a percentage which shall be 
calculated by dividing the income tax due in any year 
of assessment, as may be determined by the company, 
between year of assessment 1995 and year of 
assessment 2004, in respect of which the company 
qualified for the incentive provided by article 5A of 
the Act, by the income tax that would have been 
payable by the company in the absence of that 
incentive, and deducting the fraction so obtained from 
the integer one (1), and multiplying the result by 100: 
Provided that where a company demonstrates to 
the satisfaction of the Corporation that the percentage 
as calculated in accordance with the above provisions 
is materially different from that which the company 
reasonably expects, the Corporation may approve a 
different percentage based on the evidence provided 
by the company: 
Provided further that the entitlement to the said 
deduction shall be conditional on the company 
satisfying the conditions set out in subarticle (1) of the 
said article 5A for that year of assessment; 
(d) for the purposes of paragraphs (b) and (c) - 
(i) a company which would have been entitled to 
benefit for the incentives provided by the said 
articles 5 and 5A in any year of assessment

44 gS.L.325.06 BUSINESS PROMOTION 
between year of assessment 1995 to year of 
assessment 2003 but did not so benefit solely 
due to the fact that it did not have any 
chargeable income, shall be deemed to be a 
company which qualified for the incentive 
provided by article 5 or 5A as the case may 
require and its chargeable income for that year 
of assessment shall be deemed to be Lm100; 
(ii) for the purpose of determining the percentage 
referred to therein, the income tax due in any of 
the years of assessment between year of 
assessment 1995 to year of assessment 2003 
shall be calculated on the basis that the base 
period profits referred to article 5(2) of the Act 
are deemed to be zero; 
(iii) the remaining years of assessment in respect of 
which the company is entitled to benefit from 
the provisions of article 5 of the Act subsequent 
to year of assessment 2003 shall be consecutive 
years of assessment commencing from year of 
assessment 2004; 
(iv) the remaining years of assessment in respect of 
which the company is entitled to benefit from 
the provisions of articles 5 and 5A subsequent to 
year of assessment 2003 shall, in the case of a 
company to which regulation 31(1)(c)(i) applies, 
be computed after deducting any years of 
assessment in respect of which such company 
benefitted from the provisions of regulations 4 
or 5; 
Cap. 334. 
(e) where a company became so entitled by virtue of it 
having been entitled to the incentives provided by 
articles 18 or 20 of the Malta Freeports Act, it shall be 
entitled to deduct from - 
Cap. 364. 
Cap. 334. 
(i) the amount of any duty payable by it in terms of 
the Duty on Documents and Transfers Act on or 
after the 1st January 2003, and which duty 
would not have been payable in terms of article 
20 of the Malta Freeports Act; and 
Cap. 334. 
(ii) the amount of income tax due on its chargeable 
income, derived from its trade or business 
exercised in a freeport pursuant to the provisions 
of article 11 of the Malta Freeports Act, for the 
years of assessment subsequent to year of 
assessment 2003, 
the amount of the tax credits and where the tax credits, 
for year of assessment 2004 and subsequent years of 
assessment, exceed such duty and/or such income tax 
payable by such company in or for that year the excess 
shall be increased by the percentage referred to in the 
first proviso to regulation 5(12) and the amount so 
increased shall be the amount which the company shall

BUSINESS PROMOTION gS.L.325.06 45 
be entitled to deduct from the amount of such duty 
and/or such income tax payable by it in subsequent 
years of assessments: 
Cap. 334. 
Provided that a company shall be entitled to the 
benefit provided by this paragraph for as long as it 
remains a company licensed to operate in a freeport in 
accordance with the Malta Freeports Act and provided 
that it satisfies the conditions, as set out in that Act, it 
would have been required to satisfy in order for it to 
qualify for the exemptions provided by the said 
articles 18 and 20 of the Malta Freeports Act; 
(f) the entitlement to set-off the tax credits against the 
income tax payable by the company in the manner 
provided herein, shall be exercised after the 
application of any other benefits available to the 
company in terms of the Act and these regulations. 
(2) The provisions of regulation 5(14) and (15) shall apply 
mutatis mutandis to the tax credits and references in those 
subregulations to investment tax credits shall be construed as 
references to tax credits. 
Special incentives 
for small and 
medium-sized 
enterprises. 
Added by: 
L.N. 98 of 2003. 
Amended by: 
L.N. 128 of 2003. 
38. (1) Where a qualifying company - 
(a) qualifies as a small or medium-sized enterprise; 
(b) satisfies the conditions set out in regulation 31(1)(b) or 
(c), 
such company shall, subject to the approval of the Corporation, be 
entitled to the benefits provided by this regulation in lieu of the 
benefits provided by regulations 4, 5 or 6: 
Provided that a company that benefits from the provisions 
of this regulation shall not be entitled to the benefits provided by 
regulations 4, 5 or 6. 
(2) A company which satisfies the conditions set out in 
subregulation (1) by virtue of it having been entitled to the benefit 
provided by article 4 of the Act shall, up to year of assessment 
2012, be exempt from income tax due on its chargeable income, 
derived from its trade or business, for the consecutive years of 
assessment, forming part of the original ten consecutive years of 
assessment referred to in article 4(1) of the Act, subsequent to year 
of assessment 2003, subject to it satisfying the conditions of the 
said article 4 other than the condition set out in paragraph (b) of 
subarticle (1) of the said article 4. 
(3) A company which satisfies the conditions set out in 
subregulation (1) by virtue of it having been entitled to the benefits 
provided by article 5 of the Act shall, for the remaining years of 
assessment the company is still entitled to benefit from the 
incentives provided by the said article 5 subsequent to year of 
assessment 2003, be entitled, up to year of assessment 2012, to a 
reduction of the whole or a proportion of the amount of income tax 
due on its chargeable income derived from its trade or business; 
and the "whole or a proportion of the amount of income tax due"

46 gS.L.325.06 BUSINESS PROMOTION 
shall be determined by multiplying the total income tax due on the 
company’s chargeable income, derived from its trade or business, 
by a percentage which shall be calculated by dividing the income 
tax due in any year of assessment, as may be determined by the 
company, between year of assessment 1995 and year of assessment 
2003, in which the company qualified for the incentive provided by 
article 5 of the Act, by the income tax that would have been 
payable by the company in the absence of that incentive, and 
deducting the fraction so obtained from the integer one (1), and 
multiplying the result by 100: 
Provided that where a company demonstrates to the 
satisfaction of the Corporation that the percentage as calculated in 
accordance with the above provision is materially different from 
that which the company reasonably expects, the Corporation may 
approve a different percentage based on the evidence provided by 
the company. 
(4) A company which satisfies the conditions set out in 
subregulation (1) by virtue of it having been entitled to the benefits 
provided by article 5A of the Act shall, for the remaining years of 
assessment the company is still entitled to benefit from the 
incentives provided by the said article 5A subsequent to year of 
assessment 2003, be entitled, up to year of assessment 2012, to a 
reduction of the whole or a proportion of the amount of income tax 
due on its chargeable income derived from its trade or business; 
and the "whole or a proportion of the amount of income tax due" 
shall be determined by multiplying the total income tax due on the 
company’s chargeable income, derived from its trade or business, 
by a percentage which shall be calculated by dividing the income 
tax due in any year of assessment, as may be determined by the 
company, between year of assessment 1995 and year of assessment 
2003, in which the company qualified for the incentive provided by 
article 5A of the Act, by the income tax that would have been 
payable by the company in the absence of that incentive, and 
deducting the fraction so obtained from the integer one (1), and 
multiplying the result by 100: 
Provided that where a company demonstrates to the 
satisfaction of the Corporation that the percentage as calculated in 
accordance with the above provision is materially different from 
that which the company reasonably expects, the Corporation may 
approve a different percentage based on the evidence provided by 
the company: 
Provided further that the entitlement to the said reduction 
shall be conditional on the company satisfying the conditions set 
out in subarticle (1) of the said article 5A for that year of 
assessment. 
(5) For the purposes of subregulations (3) and (4): 
(a) a company which would have been entitled to benefit 
for the incentives provided by the said articles 5 and 
5A in any year of assessment between year of 
assessment 1995 to year of assessment 2003 but did 
not so benefit solely due to the fact that it did not have

BUSINESS PROMOTION gS.L.325.06 47 
any chargeable income, shall be deemed to be a 
company which of the Act qualified for the incentive 
provided by article 5 or 5A of the Act as the case may 
require and its chargeable income for that year of 
assessment shall be deemed to be Lm100; 
(b) for the purposes of determining the percentage 
referred to therein, the income tax due in any of the 
years of assessment between year of assessment 1995 
to year of assessment 2003 shall be calculated on the 
basis that the base period profits referred to article 
5(2) of the Act are deemed to be zero. 
Cap. 334. 
(6) A company which satisfies the conditions set out in 
subregulation (1) by virtue of it having been entitled to the benefits 
provided by articles 18 or 20 of the Malta Freeports Act - 
Cap. 364. 
Cap. 334. 
(i) shall, up to the 31st December 2011, be exempt 
from the payment of duty chargeable in terms of 
the Duty on Documents and Transfers Act to the 
same extent as it would have been exempt from 
the payment of such duty in terms of article 20 
of the Malta Freeports Act; and 
Cap. 334. 
(ii) shall, up to year of assessment 2012, be exempt 
from the payment of income tax due on its 
chargeable income, derived from its trade or 
business exercised in a freeport pursuant to the 
provisions of article 11 of the Malta Freeports 
Act, for the years of assessment subsequent to 
year of assessment 2003: 
Cap. 334. 
Provided that a company shall be entitled to the benefit 
provided by this subregulation for as long as it remains a company 
licensed to operate in a freeport in accordance with the Malta 
Freeports Act and provided that it satisfies the conditions, as set 
out in that Act, it would have been required to satisfy in order for it 
to qualify for the exemptions provided by the said articles 18 and 
20 of the Malta Freeports Act. 
(7) The provisions of regulation 31(2) to (6) shall apply mutatis 
mutandis to this regulation as they apply to regulation 31. 
Cap. 123. 
(8) Profits which are relieved from tax in accordance with the 
provisions of this regulation shall, for the purposes of the Income 
Tax Act, be allocated to the Maltese Taxed Account and upon 
distribution shall be exempt from income tax to the same extent as 
dividends referred to in article 9 of the Act. 
(9) The provisions of article 25 of the Act shall, as far as is 
applicable, apply to the incentive provided by this regulation. 
(10) The benefit provided by this regulation shall cease to apply 
with respect to a company which ceases to qualify as a small or 
medium sized enterprise by reason of the fact that it was merged 
with another company or another company merged with it or as a 
consequence of the acquisition by it of another business.

48 gS.L.325.06 BUSINESS PROMOTION 
Limitation of 
applicability of 
regulations 31 to 
38. 
Added by: 
L.N. 98 of 2003. 
39. (1) The provisions of regulations 31 to 38 shall not be 
applicable with respect to a qualifying company for a year of 
assessment if, in the accounting period ending in the year preceding 
that year of assessment, there has been a material change in the 
trading activities of such qualifying company. 
(2) A certificate issued by the Corporation confirming that 
there has been no material change in the activities of a qualifying 
company shall be conclusive evidence of that fact. 
Limitation of 
applicability of 
certain incentives. 
Added by: 
L.N. 98 of 2003. 
S.L. 325.07 
40. The incentives provided by articles 6 and 7 of the Act and 
by regulations 6, 8, 9, 10, 11 and 28 shall only be available to 
enterprises whose trade or business consists of farming, fishing and 
aquaculture, or ship repair or the production of steel, motor 
vehicles, ships or synthetic fibres, if the assistance is regarded by 
the State Aid Monitoring Board as being compatible aid in 
accordance with the provisions of the State Aid Monitoring 
Regulations. 
Common 
expenditure. 
Added by: 
L.N. 98 of 2003. 
Amended by: 
L.N. 128 of 2003. 
41. Where costs and expenditure are eligible in whole or in 
part under different schemes, giving entitlement to a tax credit 
under regulations 32 to 35, the common expenditure shall be 
considered only once under the scheme which provided that most 
favourable benefit. 
Notification dates. 
Added by: 
L.N. 98 of 2003. 
42. Where in these regulations or the Act, the Corporation is to 
be notified by a certain date, the Corporation may allow a different 
date for notification. 
Profits taxed at 
reduced rates. 
Added by: 
L.N. 128 of 2003. 
43. (1) With effect from year of assessment 2004 the profits 
which shall be taxed at the reduced rates of tax in accordance with 
the provisions of regulation 4 or 6 shall not, in any relevant year of 
assessment, exceed the amount produced by multiplying the 
number of employees by: 
(a) Lm25,000 or such higher amount as may result from 
the adjustments referred to in subregulations (2) and 
(3), where the profits are taxed at the rate of 5%; 
(b) Lm28,000 or such higher amount as may result from 
the adjustments referred to in subregulations (2) and 
(3), where the profits are taxed at 10% or 15%. 
Cap. 158. 
(2) The amounts of Lm25,000 and Lm28,000 referred to in 
subregulation (1) are stated at 2002 prices and these amounts shall 
in respect of year of assessment 2004 be increased by a percentage 
equal to the percentage increase in the inflation index, established 
in terms of article 13 of the Housing (Decontrol) Ordinance, during 
2003. For subsequent years of assessment these amounts shall be 
increased by a percentage equal to the percentage increase in the 
inflation index, established in terms of article 13 of the Housing 
(Decontrol) Ordinance, from 2002 to the year preceding the 
relevant subsequent year of assessment.

BUSINESS PROMOTION gS.L.325.06 49 
Cap. 372. 
Provided that if the inflation index for a particular year has 
not been published before the date that a company submits its 
income tax return for a year of assessment the inflation index for 
that year shall be provisionally deemed to be the inflation index of 
the previous year and once the inflation index for the year in 
question is published the company may make a further return in 
accordance with article 13 of the Income Tax Management Act. 
(3) Where in a relevant year of assessment the amount of 
profits which are taxed at a reduced rate of income tax in 
accordance with regulation 4 or 6 is less than the applicable amount 
set out in subregulation (1) as adjusted by - 
(a) subregulation (2); and 
(b) this subregulation in respect of the year of assessment 
preceding the relevant year of assessment, 
such shortfall shall be increased by the percentage referred to in the 
first proviso to regulation 5(12) and such increased amount shall be 
added to the amount set out in subregulation (1) as adjusted by 
subregulation (2) for the year of assessment following the relevant 
year of assessment. 
(4) The number of employees referred to in subregulation (1) 
shall be the employees employed by the company, claiming the 
benefit provided by regulation 4 or 6, during the accounting period 
ending in the year preceding the relevant year of assessment and 
such number of employees shall be determined in accordance with 
the provisions of regulations 3(8) and 3(9). 
(5) In this regulation ''relevant year of assessment'' means the 
year of assessment in respect of which the provisions of regulation 
4 or 6 are to be applied. 
(6) Within the scope of the provisions of the third proviso to 
regulation 4(1) and the third proviso to regulation 6(1), the 
Minister hereby determines that the last year of assessment in 
respect of which the provisions of regulations 4 and 6 shall be 
applicable shall be year of assessment 2009.

50 gS.L.325.06 BUSINESS PROMOTION 
SCHEDULE 
(Regulation 4(3)(a)) 
01. Manufacture of pharmaceuticals, medicinal chemicals and botanical 
products 
01.01. Manufacture of basic pharmaceutical products, including: 
(i) investigation, perfecting and production of medicinal active 
substances to be used for their pharmacological properties in 
the manufacture of medicaments 
(ii) processing of blood 
(iii) manufacture of chemically pure sugars 
(iv) processing of glands and manufacture of extracts of glands 
01.02. Manufacture of pharmaceutical preparations, including: 
(i) manufacture of medicaments: anti-sera and other blood 
fractions, vaccines, diverse medicaments, including 
homoeopathic preparations 
(ii) manufacture of chemical contraceptive products for external 
use and hormonal contraceptive medicaments 
(iii) manufacture of dental fillings and bone reconstruction cements 
(iv) manufacture of medical impregnated wadding, gauze, 
bandages, dressings, surgical gut string and similar items 
02. Manufacture of rubber and plastic products 
02.01. Manufacture of rubber tyres and tubes, 
(a) including: 
(i) manufacture of rubber tyres for vehicles, equipment, mobile 
machinery and other uses: pneumatic tyres, solid or cushion 
tyres 
(ii) manufacture of inner tubes for tyres 
(iii) manufacture of interchangeable tyre treads, tyre flaps, “camelback” 
strips for retreading tyres and similar items 
(b) and excluding: 
(i) manufacture of rubber repair materials which is a qualifying 
activity in terms of paragraph 02.03 of this Schedule 
(ii) tyre and tube repair, fitting or replacement 
02.02. Retreading and rebuilding of rubber tyres, 
(a) including: 
(i) tyre rebuilding and retreading 
(b) and excluding: 
(i) manufacture of rubber repair materials which is a qualifying 
activity in terms of paragraph 02.03 of this Schedule 
(ii) repair of punctured tyres 
02.03. Manufacture of other rubber products, 
(a) including: 
(i) manufacture of other products of natural or synthetic rubber, 
unvulcanized, vulcanised or hardened: rubber plates, sheets, 
strip, rods, profile shapes, tubes, pipes and hoses, rubber 
conveyor or transmission belts or belting, rubber hygienic 
articles such as sheath contraceptives, teats, hot water bottles 
and similar items, rubber articles of apparel, rubber floor

BUSINESS PROMOTION gS.L.325.06 51 
coverings, rubberised textiles, rubber thread and rope, 
rubberised yarn and fabrics, rubber rings, fittings and seals, 
rubber roller coverings, inflatable rubber mattresses 
(ii) manufacture of rubber repair materials 
(b) and excluding: 
(i) manufacture of tyre cord fabrics 
(ii) manufacture of apparel of elastic fabrics 
(iii) manufacture of rubber footwear 
(iv) manufacture of glues and adhesives based on rubber 
(v) manufacture of “camel-back” strips which is a qualifying 
activity in terms of paragraph 02.01 of this Schedule 
(vi) manufacture of inflatable rafts and boats 
(vii) manufacture of mattresses of uncovered cellular rubber 
(viii) manufacture of rubber sports requisites which is a qualifying 
activity in terms of paragraph 14.01 of this Schedule 
(ix) manufacture of rubber games and toys which is a qualifying 
activity in terms of paragraph 15.01 of this Schedule 
(x) reclaiming of rubber which is a qualifying activity in terms of 
paragraph 11.01 of this Schedule 
02.04. Manufacture of plastic plates, sheets, tubes and profiles, 
(a) including: 
(i) manufacture of semi-manufactures of plastic products: plastic 
plates, sheets, blocks, film, foil, strip and similar items 
(ii) manufacture of finished plastic products: plastic tubes, pipes 
and hoses, hose and pipe fittings 
(b) and excluding: 
(i) manufacture of plastics in primary forms: polymers including 
those of ethylene, propylene, styrene, vinyl chloride, vinyl 
acetate and acrylics, polyamides, phenolic and epoxide resins 
and polyurethanes, alkyd and polyester resins and polyethers, 
silicones, ion-exchangers based on polymers, cellulose 
(ii) manufacture of plastic optical elements which is a qualifying 
activity in terms of paragraph 08.04 of this Schedule 
(iii) manufacture of mattresses of uncovered cellular plastic 
02.05. Manufacture of plastic packing goods, 
(a) including: 
(i) manufacture of plastic articles for the packing of goods: plastic 
bags, sacks, containers, boxes, cases, carboys, bottles and 
similar items 
(b) and excluding: 
(i) manufacture of plastic travel goods 
(ii) manufacture of articles of synthetic or natural rubber which is a 
qualifying activity in terms of paragraphs 02.01, 02.02 and 
02.03 of this Schedule 
(iii) packaging whether or not this involves an automated process 
02.06. Manufacture of builders’ ware of plastic, 
(a) including: 
(i) manufacture of plastic builders’ ware: plastic doors, windows, 
frames, shutters, blinds, skirting boards, tanks, reservoirs, 
plastic floor, wall or ceiling coverings in rolls or in the form of 
tiles, plastic sanitary ware including plastic baths, showerbaths, 
wash basins, lavatory pans, flushing cisterns and similar 
items

52 gS.L.325.06 BUSINESS PROMOTION 
(b) and excluding: 
(i) manufacture of articles of synthetic or natural rubber which is a 
qualifying activity in terms of paragraphs 02.01, 02.02 and 
02.03 of this Schedule 
(ii) manufacture of linoleum and hard non-plastic surface floor 
coverings 
02.07. Manufacture of other plastic products, 
(a) including: 
(i) manufacture of plastic tableware, kitchenware and toilet articles 
(ii) manufacture of diverse plastic products such as plastic 
headgear, insulating fittings, parts of lighting fittings, office or 
school supplies, articles of apparel, fittings for furniture, 
statuettes, transmission and conveyer belts and similar items 
(b) and excluding 
(i) manufacture of plastic travel goods 
(ii) manufacture of plastic footwear 
(iii) manufacture of plastic medical and dental appliances which is a 
qualifying activity in terms of paragraph 08.01 of this Schedule 
(iv) manufacture of plastic optical elements which is a qualifying 
activity in terms of paragraph 08.04 of this Schedule 
(v) manufacture of plastic furniture 
(vi) manufacture of mattresses of uncovered cellular plastic 
(vii) manufacture of plastic sports requisites which is a qualifying 
activity in terms of paragraph 14.01 of this Schedule 
(viii) manufacture of plastic games and toys which is a qualifying 
activity in terms of paragraph 15.01 of this Schedule 
(ix) manufacture of linoleum and hard non-plastic surface floor 
coverings 
03. Manufacture of fabricated metal products excluding machinery and 
equipment 
03.01. Treatment and coating of metals, 
(a) including: 
(i) plating, anodising of metal and similar processes 
(ii) heat treatment of metal 
(iii) deburring, sand blasting, tumbling, cleaning of metals 
(iv) colouring, engraving, printing of metal 
(v) non-metallic coating of metal: plastifying, enamelling, 
lacquering and similar processes 
(vi) hardening, buffing of metals 
(b) and excluding: 
(i) forging, pressing, stamping and roll-forming of metal 
(ii) powder metallurgy: production of metal objects directly from 
metal powders by heat treatment (sintering) or under pressure 
(iii) production of finely ground metal powder 
03.02. General mechanical engineering, including: 
(i) boring, turning, milling, eroding, planing, lapping, broaching, 
levelling, sawing, grinding, sharpening, welding, splicing and 
similar processes of metal work pieces. 
03.03. Manufacture of cutlery, 
(a) including:

BUSINESS PROMOTION gS.L.325.06 53 
(i) manufacture of domestic metal cutlery such as knifes, forks, 
spoons and similar items 
(ii) manufacture of various cutting articles such as razors, razor 
blades, scissors and hair clippers 
(b) and excluding: 
(i) manufacture of cutting blades for machines which is a 
qualifying activity in terms of paragraph 03.04 of this Schedule 
(ii) manufacture of hollowware, dinnerware or flatware 
(iii) manufacture of cutlery of precious metal which is a qualifying 
activity in terms of paragraph 10.02 of this Schedule 
03.04. Manufacture of tools, 
(a) including: 
(i) manufacture of knives and cutting blades for machines or for 
mechanical appliances 
(ii) manufacture of hand tools such as pliers and screwdrivers 
(iii) manufacture of saws and sawblades, including circular 
sawblades and chainsaw blades 
(iv) manufacture of interchangeable tools for hand tools, whether or 
not power operated, or for machine-tools including drills, 
punches, dies, milling cutters 
(v) manufacture of blacksmiths’ tools: forges, anvils and similar 
tools 
(vi) manufacture of vices, clamps 
(b) and excluding: 
(i) manufacture of power driven hand tools which is a qualifying 
activity in terms of paragraph 04.11 of this Schedule 
03.05. Manufacture of locks and hinges, including 
(i) Manufacture of padlocks, locks, keys, hinges and the like 
hardware for buildings, furniture, vehicles and similar items 
03.06 Manufacture of wire products, 
(a) including: 
(i) manufacture of metal cable, plaited bands and similar articles 
(ii) manufacture of articles made of wire such as barbed wire, wire 
fencing, grill, netting, cloth and similar items 
(iii) manufacture of nails and pins 
03.07 Manufacture of fasteners, screw machine products, chain and springs, 
(a) including: 
(i) manufacture of rivets, washers and similar non-threaded 
products 
(ii) manufacture of screw machine products such as bolts, screws, 
nuts 
(iii) manufacture of springs such as leaf springs, helical springs, 
torsion bar springs, leaves for springs 
(iv) manufacture of chain, except power transmission chain 
(b) and excluding 
(i) manufacture of power transmission chain which is a qualifying 
activity in terms of paragraph 04.04 of this Schedule 
(ii) manufacture of clock or watch springs which is a qualifying 
activity in terms of paragraph 08.05 of this Schedule

54 gS.L.325.06 BUSINESS PROMOTION 
03.08 Manufacture of other fabricated metal products, 
(a) including: 
(i) manufacture of metal household articles such as sauce-pans, 
frying pans and other non-electrical utensils for use at the table 
or in the kitchen, base metal flatware, small kitchen appliances 
and accessories 
(ii) manufacture of baths, sinks, wash basins and similar articles of 
base metal 
(iii) manufacture of small metal goods for office use 
(iv) manufacture of safes, strong-boxes, armoured doors and similar 
items 
(v) manufacture of cutlasses, swords, bayonets and similar items 
(vi) manufacture of various articles in base metal such as metal 
safety headgear, clasps, buckles, hooks and sign plates 
04. Manufacture of machinery and equipment 
04.01 Manufacture of engines and turbines except aircraft, vehicle and cycle engines 
(a) including: 
(i) manufacture of internal combustion piston engines and parts 
thereof except aircraft, motor vehicle and cycle engines, marine 
engines and railway engines 
(ii) manufacture of turbines and parts thereof, steam turbines and 
other vapour turbines, hydraulic turbines, water-wheels and 
regulators thereof and gas turbines 
(b) and excluding: 
(i) manufacture of wind turbines which is a qualifying activity in 
terms of paragraph 04.02 of this Schedule 
(ii) manufacture of electric generating sets which is a qualifying 
activity in terms of paragraph 06.01of this Schedule 
(iii) manufacture of electrical equipment and components of internal 
combustion engines which is a qualifying activity in terms of 
paragraph 06.06 of this Schedule 
(iv) manufacture of motor vehicle, aircraft or cycle propulsion 
engines 
(v) manufacture of turbo-jets and turbo-propellers 
04.02. Manufacture of pumps and compressors, 
(a) including: 
(i) manufacture of air or vacuum pumps, air or other gas 
compressors 
(ii) manufacture of pumps for liquids whether or not fitted with a 
measuring device 
(iii) manufacture of fluid power equipment and pneumatic and wind 
power engines and motors 
(b) and excluding: 
(i) manufacture of hydraulic transmission equipment which is a 
qualifying activity in terms of paragraph 04.04 of this Schedule 
04.03. Manufacture of taps and valves, 
(a) including: 
(i) manufacture of industrial taps and valves including regulating 
valves and intake taps 
(ii) manufacture of sanitary taps and valves 
(iii) manufacture of heating taps and valves

BUSINESS PROMOTION gS.L.325.06 55 
(b) and excluding: 
(i) manufacture of valves of unhardened vulcanised rubber, which 
is a qualifying activity in terms of paragraph 02.03 of this 
Schedule, glass or of ceramic materials 
(ii) manufacture of inlet and exhaust valves of internal combustion 
engines 
04.04. Manufacture of bearings, gears, gearing and driving elements, 
(a) including: 
(i) manufacture of ball and roller bearings and parts thereof 
(ii) manufacture of mechanical power transmission equipment, 
transmission shafts and cranks such as cam shafts, crank shafts, 
cranks, bearing housings and plain shaft bearings 
(iii) manufacture of gears, gearing and gear boxes and other speed 
changers 
(iv) manufacture of clutches and shaft couplings 
(v) manufacture of flywheels and pulleys 
(vi) manufacture of articulated link chain 
(vii) manufacture of hydraulic transmission equipment 
(b) and excluding: 
(i) manufacture of other chain 
(ii) manufacture of electromagnetic clutches which is a qualifying 
activity in terms of paragraph 06.07 of this Schedule 
04.05. Manufacture of furnaces and furnace burners, 
(a) including: 
(i) manufacture of electrical and other industrial and laboratory 
furnaces and ovens including incinerators 
(ii) manufacture of burners 
(iii) manufacture of mechanical stokers, grates, ash discharges and 
similar items 
(b) and excluding: 
(i) manufacture of agricultural dryers which is a qualifying activity 
in terms of paragraph 04.14 of this Schedule 
(ii) manufacture of non-electric bakery ovens which is a qualifying 
activity in terms of paragraph 04.14 of this Schedule 
(iii) manufacture of dryers for wood, paper pulp, paper or 
paperboard which is a qualifying activity in terms of paragraph 
04.17 of this Schedule 
(iv) manufacture of household ovens which is a qualifying activity 
in terms of paragraph 04.18 of this Schedule 
(v) manufacture of medical, surgical or laboratory sterilizers which 
is a qualifying activity in terms of paragraph 08.01 of this 
Schedule 
04.06. Manufacture of lifting and handling equipment, 
(a) including: 
(i) manufacture of hand operated or power driven lifting, handling, 
loading or unloading machinery: pulley tackle and hoists, 
winches, capstans and jacks, derricks, cranes, mobile lifting 
frames, straddle carriers, works trucks, whether or not fitted 
with lifting or handling equipment whether or not selfpropelled, 
of the type used in factories, mechanical 
manipulators and industrial robots specifically designed for 
lifting, handling, loading or unloading 
(ii) manufacture of conveyers, teleferics, liquid elevators and

56 gS.L.325.06 BUSINESS PROMOTION 
similar equipment 
(iii) manufacture of lifts, escalators and moving walkways 
(b) and excluding: 
(i) manufacture of continuous-action elevators and conveyors for 
underground use which is a qualifying activity in terms of 
paragraph 04.13 of this Schedule 
(ii) manufacture of mechanical shovels, excavators and shovel 
loaders which is a qualifying activity in terms of paragraph 
04.13 of this Schedule 
(iii) manufacture of industrial robots for multiple uses which is a 
qualifying activity in terms of paragraph 04.17 of this Schedule 
(iv) manufacture of floating cranes, railway cranes, crane-lorries 
04.07. Manufacture of non-domestic cooling and ventilation equipment, 
(a) including: 
(i) manufacture of refrigerating or freezing industrial equipment 
(ii) manufacture of air-conditioning machines 
(iii) manufacture of heat exchangers 
(iv) manufacture of non-domestic fans 
(b) and excluding: 
(i) manufacture of agricultural dryers which is a qualifying activity 
in terms of paragraph 04.14 of this Schedule 
(ii) manufacture of domestic refrigerating or freezing equipment 
which is a qualifying activity in terms of paragraph 04.18 of 
this Schedule 
(iii) manufacture of domestic fans which is a qualifying activity in 
terms of paragraph 04.18 of this Schedule 
04.08. Manufacture of other general purpose machinery, 
(a) including: 
(i) manufacture of weighing machinery (other than sensitive 
laboratory balances): household and shop scales, platform 
scales, scales for continuous weighing, weigh-bridges, weights 
and similar items 
(ii) manufacture of filtering or purifying machinery and apparatus 
for liquids 
(iii) manufacture of equipment for projecting, dispersing or spraying 
liquids or powders: manufacture of spray guns, fire 
extinguishers, sand blasting machines, steam cleaning machines 
and similar machinery 
(iv) manufacture of packing and wrapping machinery: manufacture 
of filling, closing, sealing, capsuling or labelling machines and 
similar equipment 
(v) manufacture of machinery for cleaning or drying bottles and for 
aerating beverages 
(vi) manufacture of distilling or rectifying plant for petroleum 
refineries, chemical industries, beverage industries 
(vii) manufacture of gas generators 
(viii) manufacture of calendaring or other rolling machines and 
cylinders thereof 
(ix) manufacture of centrifuges 
(x) manufacture of gaskets and similar joints made of a 
combination of materials or layers of the same material 
(xi) manufacture of automatic goods vending machines 
(b) and excluding: 
(i) manufacture of agricultural spraying machinery which is a

BUSINESS PROMOTION gS.L.325.06 57 
qualifying activity in terms of paragraph 04.10 of this Schedule 
(ii) manufacture of metal or glass rolling machinery and cylinders 
thereof which is a qualifying activity in terms of paragraphs 
04.12 and 04.17 of this Schedule 
(iii) manufacture of cream separators which is a qualifying activity 
in terms of paragraph 04.14 of this Schedule 
(iv) manufacture of domestic fans which is a qualifying activity in 
terms of paragraph 04.18 of this Schedule 
(v) manufacture of sensitive balances which is a qualifying activity 
in terms of paragraph 08.02 of this Schedule 
04.09. Manufacture of agricultural tractors, 
(a) including: 
(i) manufacture of tractors used in agriculture and forestry 
(ii) manufacture of walking (pedestrian controlled) tractors 
(b) and excluding: 
(i) manufacture of road tractors for semi-trailers 
(ii) manufacture of road trailers or semi-trailers 
04.10. Manufacture of other agricultural and forestry machinery, 
(a) including: 
(i) manufacture of mowers, including lawn mowers 
(ii) manufacture of agricultural self-loading or self-unloading 
trailers or semi-trailers 
(iii) manufacture of agricultural machinery for soil preparation, 
planting or fertilizing: ploughs, manure spreaders, seeders, 
harrows and similar machinery 
(iv) manufacture of harvesting or threshing machinery: harvesters, 
threshers, sorters and similar machinery 
(v) manufacture of milking machines 
(vi) manufacture of spraying machinery for agricultural use 
(vii) manufacture of diverse agricultural machinery: poultry keeping 
machinery, bee-keeping machinery, equipment for preparing 
fodder machines for cleaning, sorting or grading eggs, fruit, 
seed, grain and other similar crops 
(b) and excluding: 
(i) manufacture of agricultural hand-tools which is a qualifying 
activity in terms of paragraph 03.04 of this Schedule 
(ii) manufacture of works trucks which is a qualifying activity in 
terms of paragraph 04.06 of this Schedule 
(iii) manufacture of cream separators which is a qualifying activity 
in terms of paragraph 04.14 of this Schedule 
(iv) manufacture of road trailers or semi-trailers 
04.11. Manufacture of machine-tools, 
(a) including: 
(i) manufacture of machine-tools for working any material by 
removal of material including those working by laser, 
ultrasonic, electro-discharge processes: lathes, boring 
machines, drills and similar machine-tools 
(ii) manufacture of machine-tools for working any material without 
removing material: forging or die-stamping machines, drawbenches 
and similar machine-tools 
(iii) manufacture of machines for nailing, stapling, glueing and 
similar processes 
(iv) manufacture of welding, brazing or soldering machines

58 gS.L.325.06 BUSINESS PROMOTION 
(v) manufacture of workholders, toolholders and special 
attachments for machine-tools 
(vi) manufacture of hand tools with self-contained motor or with 
pneumatic drive 
(b) and excluding: 
(i) manufacture of interchangeable tools for hand-tools or 
machine-tools which is a qualifying activity in terms of 
paragraph 03.04 of this Schedule 
(ii) manufacture of machinery for metallurgy which is a qualifying 
activity in terms of paragraph 04.12 of this Schedule 
(iii) manufacture of machinery for mining and quarrying which is a 
qualifying activity in terms of paragraph 04.13 of this Schedule 
04.12. Manufacture of machinery for metallurgy, 
(a) including: 
(i) manufacture of machines and equipment for handling hot 
metals: converters, ingot moulds, ladles, casting machines 
(ii) manufacture of metal-rolling mills and rolls for such mills 
(b) and excluding: 
(i) manufacture of draw-benches which is a qualifying activity in 
terms of paragraph 04.11 of this Schedule 
(ii) manufacture of moulding boxes and moulds (except ingot 
moulds) which is a qualifying activity in terms of paragraph 
04.17 of this Schedule 
04.13. Manufacture of machinery for mining, quarrying and construction, 
(a) including: 
(i) manufacture of continuous-action elevators and conveyors for 
underground use 
(ii) manufacture of boring, cutting, sinking and tunnelling 
machinery 
(iii) manufacture of machinery for treating minerals by screening, 
sorting, separating and similar processes 
(iv) manufacture of concrete and mortar mixers 
(v) manufacture of earth moving machinery: bulldozers, angledozers, 
graders, scrapers, levellers, mechanical shovels, shovel 
loaders and similar machinery 
(vi) manufacture of pile-drivers and pile-extractors, mortar 
spreaders, bitumen spreaders, machinery for concrete surfacing 
and similar machinery 
(vii) manufacture of bulldozer and angle-dozer blades 
(b) and excluding: 
(i) manufacture of lifting and handling equipment which is a 
qualifying activity in terms of paragraph 04.06 of this Schedule 
(ii) manufacture of wheeled tractors which is a qualifying activity 
in terms of paragraph 04.09 of this Schedule 
(iii) manufacture of machine-tools for working stone, including 
machines for splitting or clearing stone which is a qualifying 
activity in terms of paragraph 04.11 of this Schedule 
(iv) manufacture of concrete-mixer lorries 
04.14. Manufacture of machinery for food, beverage and tobacco processing, 
(a) including: 
(i) manufacture of agricultural dryers 
(ii) manufacture of machinery for the dairy industry such as cream 
separators, milk processing machinery (homogenisers and

BUSINESS PROMOTION gS.L.325.06 59 
irradiators), milk converting machinery (butter churns, butter 
workers and moulding machines), cheese-making machines 
(homogenisers, moulders, presses) and similar machinery 
(iii) manufacture of machinery for grain milling industry: grinding 
mills, “breading” rolls or mills, feeders, bran cleaners, blenders, 
rice hullers, pea splitters 
(iv) manufacture of presses, crushers, and similar machinery used to 
make wine, cider, fruit juices and other similar beverages 
(v) manufacture of machinery for the bakery industry or for making 
macaroni, spaghetti or similar products: manufacture of nonelectric 
bakery ovens, dough mixers, dough-dividers, moulders, 
slicers, cake depositing machines and similar machinery 
(vi) manufacture of machines and equipment to process diverse 
food: machinery to make confectionery, cocoa or chocolate; to 
maintain sugar; for breweries; to process meat or poultry, to 
prepare fruit, nuts or vegetables; to prepare fish, shell fish or 
other sea-food; other machinery for the industrial preparation or 
manufacture of food or drink 
(vii) manufacture of machinery for the extraction or preparation of 
animal or vegetable fats or oils 
(viii) manufacture of machinery for the preparation of tobacco and 
for the making of cigarettes or cigars, or for pipe or chewing 
tobacco or snuff 
(ix) manufacture of machinery for the preparation of food in hotels 
and restaurants 
(b) and excluding: 
(i) manufacture of packing, wrapping and weighing machinery 
which is a qualifying activity in terms of paragraph 04.08 of 
this Schedule 
(ii) manufacture of cleaning, sorting or grading machinery for eggs, 
fruit or other crops which is a qualifying activity in terms of 
paragraph 04.10 of this Schedule 
04.15. Manufacture of machinery for textile, apparel and leather production, 
(a) including: 
(i) manufacture of textile machinery: machines for preparing, 
producing, extruding, drawing, texturing or cutting man-made 
textile fibres, materials or yarns, machines for preparing textile 
fibres such as cotton gins, bale breakers, garnetters, cotton 
spreaders, wool scourers, wool carbonizers, combs, carders, 
roving frames, spinning machines, machines for preparing 
textile yarns such as reelers, warpers and related machines, 
weaving machines (looms) including hand looms, kitchen 
machines, machines for making knotted net, tulle, lace, braid 
and other similar items 
(ii) manufacture of auxiliary machines or equipment for textile 
machinery: dobbies, Jacquards, automatic stop motions, shuttle 
changing mechanisms, spindles and spindle flyers and similar 
machinery 
(iii) manufacture of machinery for fabric processing: machinery for 
washing, bleaching, dyeing, dressing, finishing, coating or 
impregnating textile fabrics, manufacture of machines for 
reeling, unreeling, folding, cutting or pinking textile fabrics 
(iv) manufacture of laundry machinery: ironing machines including 
fusing presses, laundry-type washing and drying machines, drycleaning 
machines 
(v) manufacture of sewing machines, sewing machine heads and 
sewing machine needles

60 gS.L.325.06 BUSINESS PROMOTION 
(vi) manufacture of machines for producing or finishing felt or nonwovens 
(vii) manufacture of leather machines: machinery for preparing, 
tanning or working hides, skins or leather, machinery for 
making or repairing footwear or other articles of hides, skins, 
leather or furskins 
(b) and excluding: 
(i) manufacture of paper or paperboard cards for use on Jaquard 
machines 
(ii) manufacture of ironing machines of the calender type which is a 
qualifying activity in terms of paragraph 04.08 of this Schedule 
(iii) manufacture of machines used in bookbinding which is a 
qualifying activity in terms of paragraph 04.17 of this Schedule 
(iv) manufacture of domestic washing and drying machines which 
is a qualifying activity in terms of paragraph 04.18 of this 
Schedule 
04.16. Manufacture of machinery for paper and paperboard production, including: 
(i) manufacture of machinery for making paper pulp 
(ii) manufacture of paper and paperboard making machinery 
(iii) manufacture of machinery producing articles of paper or 
paperboard 
04.17. Manufacture of other special purpose machinery, 
(a) including: 
(i) manufacture of machinery for working soft rubber or plastics or 
for the manufacture of products of these materials: extruders, 
moulders, pneumatic tyre making or retreading machines and 
other machines for making a specific rubber or plastic product 
(ii) manufacture of printing and bookbinding machines 
(iii) manufacture of moulding boxes for any material, mould bases, 
moulding patterns, moulds 
(iv) manufacture of diverse special machinery and equipment: 
machines to assemble electric or electronic lamps, tubes 
(valves) or bulbs; machines for production or hot-working of 
glass or glassware, glass fibre or yarn; machinery or apparatus 
for isotopic separation, rope making machinery and similar 
machinery 
(v) manufacture of dryers for wood, paper pulp, paper or 
paperboard 
(b) and excluding: 
(i) manufacture of machinery or equipment to work hard rubber, 
hard plastics or cold glass which is a qualifying activity in terms 
of paragraph 04.11of this Schedule 
(ii) manufacture of household appliances which is a qualifying 
activity in terms of paragraphs 04.18 and 04.19 of this Schedule 
04.18. Manufacture of electric domestic appliances, 
(a) including: 
(i) manufacture of domestic electric appliances: refrigerators and 
freezers, dishwashers, washing and drying machines, vacuum 
cleaners, floor polishers, waste disposers, grinders, blenders, 
juice squeezers, tin openers, electric shavers, electric tooth 
brushes, knife sharpeners, ventilating or recycling hoods 
(ii) manufacture of domestic electro-thermic appliances: electric 
water heaters; electric blankets; electric dryers, combs, brushes, 
curlers; electric smoothing irons; space heaters and household

BUSINESS PROMOTION gS.L.325.06 61 
type fans; electric ovens, micro-wave ovens, cookers, hot 
plates, toasters, coffee or tea makers, fry-pans, roasters, grills, 
electric heating resistors and similar appliances 
(b) and excluding: 
(i) manufacture of sewing machines which is a qualifying activity 
in terms of paragraph 04.15 of this Schedule 
04.19. Manufacture of non-electric domestic appliances, 
(a) including: 
(i) manufacture of non-electric domestic cooking, heating and 
lighting equipment: non-electric space heaters, cooking ranges, 
grates, stoves, water heaters, cooking appliances, plate 
warmers, gas lamps 
(ii) manufacture of parts of, or accessories for, such non-electric, 
domestic appliances 
(b) and excluding: 
(i) manufacture of machinery for the preparation of food in 
commercial kitchens which is a qualifying activity in terms of 
paragraph 04.14 of this Schedule 
05. Manufacture of office machinery and computers 
05.01. Manufacture of office machinery, including: 
(i) manufacture of manual or electric typewriters 
(ii) manufacture of word-processing machines 
(iii) manufacture of hectograph or stencil duplicating machines, 
addressing machines and sheet fed office type offset printing 
machines 
(iv) manufacture of calculating machines, cash registers, postage 
franking machines, special terminals for issuing of tickets and 
reservations and similar machinery 
(v) manufacture of diverse office machinery or equipment: 
machines that sort, wrap or count coins; automatic banknote 
dispensers; machines that stuff envelopes, sort mail; pencil 
sharpening machines; perforating or stapling machines and 
similar machinery 
05.02. Manufacture of computers and other information processing equipment, 
(a) including: 
(i) manufacture of automatic data processing machines including 
micro computers such as digital machines, analogue machines 
and hybrid machines 
(ii) manufacture of peripheral units such as printers, terminals, 
magnetic or optical readers and machines for transcribing data 
onto data media in coded form 
(b) and excluding: 
(i) manufacture of electronic parts found in computing machinery 
which is a qualifying activity in terms of paragraph 07.01 of 
this Schedule 
(ii) manufacture of electronic games which is a qualifying activity 
in terms of paragraph 15.01 of this Schedule 
(iii) repair and maintenance of computer systems 
06. Manufacture of electric machinery and apparatus 
06.01. Manufacture of electric motors, generators and transformers,

62 gS.L.325.06 BUSINESS PROMOTION 
(a) including: 
(i) manufacture of AC motors 
(ii) manufacture of AC generators 
(iii) manufacture of universal AC/DC motors 
(iv) manufacture of DC motors or generators 
(v) manufacture of AC or DC generator sets 
(vi) manufacture of electric rotary or static converters 
(vii) manufacture of electrical transformers 
(b) and excluding: 
(i) manufacture of vehicle generators and cranking motors which 
is a qualifying activity in terms of paragraph 06.06 of this 
Schedule 
(ii) manufacture of diode valves which is a qualifying activity in 
terms of paragraph 07.01 of this Schedule 
06.02. Manufacture of electricity distribution and control apparatus, 
(a) including: 
(i) manufacture of electrical apparatus for switching or protecting 
electrical circuits, or for making connections to or in electrical 
circuits: manufacture of switches, fuses, lightning arresters, 
voltage limiters, surge suppressors, plugs, junction boxes, 
relays, sockets, lamp holders 
(ii) manufacture of electric control or distribution boards, panels, 
consoles, desks, cabinets and other bases 
(b) and excluding: 
(i) manufacture of fuse wire or strip 
(ii) manufacture of carbon or graphite electrodes which is a 
qualifying activity in terms of paragraph 06.07 of this Schedule 
(iii) manufacture of boards, panels, consoles for use in line 
telephony or line telegraphy which is a qualifying activity in 
terms of paragraph 07.02 of this Schedule 
06.03. Manufacture of insulated wire and cable, 
(a) including: 
(i) manufacture of insulated wire, cable, strip and other insulated 
conductors whether or not fitted with connectors 
(ii) manufacture of optical fibre cables for coded data transmission: 
telecommunications, video, control, data 
(b) and excluding: 
(i) manufacture of uninsulated non-ferrous metal wire 
(ii) manufacture of uninsulated metal cable or insulated cable not 
capable of being used as a conductor of electricity 
(iii) manufacture of wiring sets which is a qualifying activity in 
terms of paragraph 06.06 of this Schedule 
(iv) manufacture of optical fibres and optical fibre cables for live 
transmission of images: endoscopy, lighting, live images which 
is a qualifying activity in terms of paragraph 08.04 of this 
Schedule 
06.04. Manufacture of accumulators, primary cells and primary batteries, including: 
(i) manufacture of primary cells and primary batteries 
(ii) manufacture of electric accumulators, including parts thereof 
06.05. Manufacture of lighting equipment and electric lamps, including: 
(i) manufacture of electric filament or discharge lamps such as 
ultra-violet or infra-red lamps, arc lamps, flashbulbs, flashcubes

BUSINESS PROMOTION gS.L.325.06 63 
and similar items 
(ii) manufacture of electric lamps and lighting fittings such as 
chandeliers, table, desk, bedside or floor-standing lamps even 
non-electric, portable electric lamps, illuminated signs and 
nameplates, outdoor and road lighting, lighting sets of a kind 
used for Christmas trees 
06.06. Manufacture of electrical equipment for engines and vehicles, including: 
(i) manufacture of electrical ignition or starting equipment for 
internal combustion engines: ignition magnetos, magnetodynamos, 
ignition coils, sparking plugs, glow plugs, starter 
motors, generators (dynamos, alternators), voltage regulators 
and similar equipment 
(ii) manufacture of electrical lighting and sound or visual signalling 
equipment for cycles and motor vehicles: lamps, horns, sirens 
and similar equipment 
(iii) manufacture of wiring sets 
(iv) manufacture of windscreen wipers and electrical defrosters and 
demisters 
(v) manufacture of dynamos for cycles 
(vi) manufacture of electromechanical/electronic components 
06.07. Manufacture of other electrical equipment, 
(a) including: 
(i) manufacture of electrical signalling, safety or traffic control 
equipment for motorways, roads or streets, railways and 
tramways, inland waterways, ports and harbours and airports 
(ii) manufacture of diverse electrical sound or visual signalling 
apparatus: bells, sirens, indicator panels, burglar alarms, fire 
alarms and similar items 
(iii) manufacture of electromagnets including electromagnetic or 
permanent magnet chucks, clutches, brakes, couplings, clamps 
or lifting heads 
(iv) manufacture of electrical insulators and insulating fittings, 
except of glass or ceramics 
(v) manufacture of insulating fittings for electrical machines or 
equipment, except of ceramics or plastics 
(vi) manufacture of carbon or graphite electrodes 
(vii) manufacture of electrical conduit tubing and joints for such 
tubing, of base metal lines with insulating material 
(viii) manufacture of diverse electrical machines and apparatus: 
manufacture of particle accelerators, signal generators, mine 
detectors and similar items 
(b) and excluding: 
(i) manufacture of glass envelopes for lamps 
(ii) manufacture of hand-held electrically operated spray guns 
which is a qualifying activity in terms of paragraph 04.08 of 
this Schedule 
(iii) manufacture of electric lawn-mowers which is a qualifying 
activity in terms of paragraph 04.10 of this Schedule 
(iv) manufacture of electric shavers which is a qualifying activity in 
terms of paragraph 04.18 of this Schedule 
(v) manufacture of electronic valves and tubes (including cold 
cathode valves) which is a qualifying activity in terms of 
paragraph 07.01 of this Schedule 
(vi) manufacture of electrically operated hand-held medical or 
dental instruments which is a qualifying activity in terms of

64 gS.L.325.06 BUSINESS PROMOTION 
paragraph 08.01of this Schedule 
07. Manufacture of radio, television and communication equipment and 
apparatus 
07.01. Manufacture of electronic valves and tubes and other electronic components, 
(a) including: 
(i) manufacture of thermionic, cold cathode or photo-cathode 
valves or tubes: television picture tubes, television camera 
tubes, image converters and intensifiers, microwave tubes, 
receiver or amplifier valves or tubes and similar items 
(ii) manufacture of diodes, transistors and similar semi-conductor 
devices 
(iii) manufacture of photosensitive semi-conductor devices 
including photo-voltaic cells 
(iv) manufacture of mounted piezo-electric crystals 
(v) manufacture of electronic integrated circuits and microassemblies: 
monolithic integrated circuits, hybrid integrated 
circuits and electronic microassemblies of moulded module, 
micromodule or similar types 
(vi) manufacture of printed circuits 
(vii) manufacture of electrical capacitors (or condensers), including 
power capacitors 
(viii) manufacture of resistors including rheostats and potentiometers 
(b) and excluding: 
(i) manufacture of heating resistors which is a qualifying activity 
in terms of paragraph 04.18 of this Schedule 
(ii) manufacture of transformers which is a qualifying activity in 
terms of paragraph 06.01 of this Schedule 
(iii) manufacture of switches which is a qualifying activity in terms 
of paragraph 06.02 of this Schedule 
07.02. Manufacture of television and radio transmitters and apparatus for line telephony 
and line telegraphy, 
(a) including: 
(i) manufacture of apparatus for television transmission including 
manufacture of relay transmitters and television transmitters for 
industrial use 
(ii) manufacture of television cameras 
(iii) manufacture of transmission apparatus for radio-broadcasting 
(iv) manufacture of transmission apparatus for radio-telephony: 
fixed transmitters and transmitter-receivers, radio-telephony 
apparatus for transport equipment, radio-telephones, other 
transponders and similar equipment 
(v) manufacture of apparatus for line telephony: telephony sets, fax 
machines, automatic and non-automatic switchboards and 
exchanges, telex and teleprinter apparatus and similar items 
(b) and excluding: 
(i) manufacture of electronic components which is a qualifying 
activity in terms of paragraph 07.01of this Schedule 
07.03. Manufacture of television and radio receivers, sound or video recording or 
reproducing apparatus and associated goods, 
(a) including: 
(i) manufacture of television receivers including video monitors 
and video projectors

BUSINESS PROMOTION gS.L.325.06 65 
(ii) manufacture of video recording or reproducing apparatus 
including camcorders 
(iii) manufacture of radio-broadcasting receivers 
(iv) manufacture of magnetic tape recorders and other sound 
recording apparatus including telephone answering machines, 
cassette-type recorders and similar items 
(v) manufacture of turn-tables (record decks), record players, 
cassette players, CD players and similar items 
(vi) manufacture of microphones, loudspeakers, headphones, 
earphones, amplifiers and sound amplifier sets 
(vii) manufacture of pick-ups, tone arms, sound-heads, tables for 
turn-tables, record cutters, aerials, aerial reflectors and aerial 
rotors, cable converters, TV decoders 
(viii) manufacture of sound electro acoustic apparatus including door 
intercoms, command transmitter intercoms, simultaneous 
interpretation apparatus, electronic voting systems, conference 
systems, paging devices, portable sound systems 
(b) and excluding: 
(ii) publishing and reproduction of pre-recorded audio and video 
discs and tapes 
(ii) manufacture of prepared unrecorded media 
08. Manufacture of medical, precision and optical instruments, watches and 
clocks 
08.01. Manufacture of medical and surgical equipment and orthopaedic appliances, 
(a) including: 
(i) manufacture of instruments and appliances used for medical, 
surgical, dental or veterinary purposes such as electrodiagnostic 
apparatus such as electrocardiographs, ultrasonic 
diagnostic equipment, scintillation scanners, nuclear magnetic 
resonance apparatus, dental drill engines, sterilizers, ophthalmic 
instruments 
(ii) manufacture of syringes, needles used in medicine, mirrors, 
reflectors, endoscopes and similar items 
(iii) manufacture of apparatus based on the use of X-rays or alpha, 
beta or gamma radiation whether or not for use in human or 
animal medicine such as X-ray tubes, high tension generators, 
control panels, desks, screens and similar equipment 
(iv) manufacture of medical, surgical, dental or veterinary furniture 
such as operating tables, hospital beds with mechanical fittings, 
dentists’ chairs 
(v) manufacture of mechano-therapy appliances, massage 
apparatus, psychological testing apparatus, ozone therapy, 
oxygen therapy, artificial respiration apparatus, gas masks and 
similar equipment 
(vi) manufacture of orthopaedic appliances such as crutches, 
surgical belts and trusses, splints, artificial teeth, artificial limbs 
and other artificial parts of the body, hearing aids, pace-makers 
and similar items 
(vii) manufacture of medical disposable devices 
(viii) manufacture of medical transfer devices 
(b) and excluding: 
(i) manufacture of cement used in dentistry which is a qualifying 
activity in terms of paragraph 01.02 of this Schedule 
(ii) manufacture of thermometers which is a qualifying activity in 
terms of paragraph 08.02 of this Schedule

66 gS.L.325.06 BUSINESS PROMOTION 
(iii) manufacture of corrective spectacle lenses and of their frame or 
of optical microscopes which is a qualifying activity in terms of 
paragraph 08.04 of this Schedule 
08.02. Manufacturing of instruments and appliances for measuring, checking, testing, 
navigating and other purposes, except industrial process control equipment, 
(a) including: 
(i) manufacture of laboratory type sensitive balances 
(ii) manufacture of drawing, marking-out or mathematical 
calculating instruments such as measuring rods and tapes, 
micrometers, callipers and gauges and similar items 
(iii) manufacture of microscopes other than optical microscope and 
diffraction apparatus 
(iv) manufacture of apparatus for measuring and checking electrical 
quantities: oscilloscopes, spectrum analysers, cross-check 
meters, instruments for checking current, voltage, resistance 
and similar items 
(v) manufacture of apparatus for measuring or checking nonelectrical 
quantities such as radiation detectors and counters, 
apparatus for testing and regulating vehicle motors and similar 
items 
(vi) manufacture of navigational, meteorological, geophysical and 
related instruments and apparatus such as surveying 
instruments, oceanographic or hydrological instruments, 
seismometers, rangefinders, automatic pilots, sextants, 
ultrasonic sounding instruments, air navigation instruments and 
systems, radar apparatus, radio remote control apparatus and 
radio navigational aid apparatus 
(vii) manufacture of electricity supply meters and supply meters for 
water, gas, petrol and similar liquids and gases 
(viii) manufacture of machines and appliances for testing the 
mechanical properties of materials 
(ix) manufacture of instruments and apparatus for carrying out 
physical or chemical analyses such as polarimeters, 
photometers, refractometers, colorimeters, spectrometers, pHmeters, 
viscometers, surface tension instruments and similar 
instruments and apparatus 
(x) manufacture of instruments and apparatus for measuring or 
checking the flow, level pressure or other variables of liquids or 
gases such as flow meters, level gauges, manometers, heat 
meters and similar instruments and apparatus 
(xi) manufacture of diverse measuring, checking or testing 
instruments, apparatus or machines such as hydrometers, 
thermometers, barometers, revolution counters, taximeters, 
pedometers, tachometers, balancing machines, test benches, 
comparators and similar instruments, apparatus or machines 
(xii) manufacture of optical type measuring and checking appliances 
and instruments 
(b) and excluding: 
(i) manufacture of pumps incorporating measuring devices which 
is a qualifying activity in terms of paragraph 04.02 of this 
Schedule 
(ii) manufacture of medical and surgical instruments which is a 
qualifying activity in terms of paragraph 08.01 of this Schedule 
(iii) manufacture of industrial process control equipment which is a 
qualifying activity in terms of paragraph 08.03 of this Schedule 
(iv) manufacture of binoculars, monoculars and similar optical

BUSINESS PROMOTION gS.L.325.06 67 
devices which is a qualifying activity in terms of paragraph 
08.04 of this Schedule 
(v) manufacture of optical microscopes which is a qualifying 
activity in terms of paragraph 08.04 of this Schedule 
08.03 Manufacture of industrial process control equipment, including: 
(i) Design and assembly of industrial continuous process control 
systems 
(ii) Design and assembly of automated production plants consisting 
of various machines, handling devices and centralized 
controlling apparatus 
08.04 Manufacture of optical instruments and photographic equipment, 
(a) including: 
(i) manufacture of optical elements mounted or not such as 
unworked optical elements other than of glass, prisms, lenses, 
optical mirrors, colour filters, polarising elements of glass or 
other material, optical fibres and optical fire cables for live 
transmission of images such as endoscopy, lighting, live 
images, spectacle lenses and contact lenses, spectacle frames 
and frames fitted with lenses whether or not the lenses are 
optically worked such as sun-glasses, protective glasses, 
corrective glasses 
(ii) manufacture of optical instruments such as optical microscopes, 
equipment for microphotography and microprojection, 
magnifying glasses, reading glasses, thread counters, 
binoculars, sight telescopes, telescopic sights and observation 
telescopes, astronomical equipment, lasers, but excluding laser 
diodes 
(iii) manufacture of photographic and cinematographic equipment 
such as cameras, image projectors, enlargers and reducers, 
discharge lamps (''electronic'') and other flashlight apparatus, 
apparatus and equipment for photographic and cinematographic 
laboratories, apparatus for the projection of circuit patterns on 
sensitised semi-conductor materials, projection screens 
(b) and excluding: 
(i) manufacture of photochemical products 
(ii) manufacture of unworked glass optical elements 
(iii) manufacture of optical fibre cables for coded data transmission 
which is a qualifying activity in terms of paragraph 06.03 of 
this Schedule 
(iv) manufacture of photographic flashbulbs which is a qualifying 
activity in terms of paragraph 06.05 of this Schedule 
(v) manufacture of television cameras which is a qualifying activity 
in terms of paragraph 07.02 of this Schedule 
(vi) manufacture of microscopes other than optical which is a 
qualifying activity in terms of paragraph 08.02 of this Schedule 
(vii) manufacture of optical type measuring and checking appliances 
and instruments which is a qualifying activity in terms of 
paragraph 08.02 of this Schedule 
08.05 Manufacture of watches and clocks, 
(a) including: 
(i) manufacture of clocks and watches of all kinds, including 
instrument panel clocks; watch and clock cases, including cases 
of noble metals; movements of all kinds of watches and clocks 
(ii) manufacture of time recording equipment and equipment for

68 gS.L.325.06 BUSINESS PROMOTION 
measuring, recording and otherwise displaying intervals of time 
such as parking meters, process timers, time switches and other 
releases 
(iii) manufacture of components for clocks and watches, such as 
springs, jewels, dials, hands, metal watch bands and bracelets, 
plates, bridges and other parts. 
(b) and excluding: 
(i) manufacture of non-metallic watch bands 
09. Manufacture of motorcycles 
09.01 Manufacture of motorcycles, 
(a) including: 
(i) manufacture of motorcycles, mopeds and cycles fitted with an 
auxiliary engine 
(ii) manufacture of engines for motorcycles 
(iii) manufacture of side-cars 
(iv) manufacture of parts and accessories for motorcycles 
(b) and excluding: 
(i) manufacture of parts of motorcycle engines 
(ii) manufacture of bicycles or invalid carriages 
10. Manufacture of jewellery and related articles 
10.01. Striking of coins and medals, including: 
(a) manufacture of coins including coins for use as legal tender, medals and 
medallions, whether or not of precious metal 
10.02. Manufacture of jewellery and related articles, 
(a) including: 
(i) production of worked pearls 
(ii) production of precious and semi-precious stones in the worked 
state. Included is the working of industrial quality stones and 
synthetic or reconstructed precious or semi precious stones 
(iii) working of diamonds 
(iv) manufacture of jewellery of precious metal or of base metals 
clad with precious metals, or precious or semi-precious stones, 
or of combinations of precious metal and precious or semiprecious 
stones or of other materials 
(v) manufacture of goldsmiths’ articles of precious metals or of 
base metals clad with precious metals such as dinnerware, 
flatware, hollowware, toilet articles, office or desk articles and 
articles for religious use and similar items 
(vi) engraving on objects of precious metals 
(b) and excluding: 
(i) manufacture of articles of base metal plated with precious metal 
unless qualifying under paragraph 03 of this Schedule 
(ii) manufacture of watch cases and metal straps which is a 
qualifying activity in terms of paragraph 08.05 of this Schedule 
(iii) manufacture of imitation jewellery 
11. Recycling 
11.01 Recycling of metal waste and scrap, 
(a) including: 
(i) processing of metal waste and scrap and of metal articles

BUSINESS PROMOTION gS.L.325.06 69 
whether or not used, into secondary raw material. Typical is 
that, in terms of commodities, input consists of waste and scrap, 
the input being sorted or unsorted but always unfit for further 
direct use in an industrial process whereas the output is made fit 
for further processing and is to be considered then as an 
intermediate good. A process is required, either mechanical or 
chemical, such as mechanical crushing of metal waste such as 
used cars, washing machines, bikes with subsequent sorting and 
separation, mechanical reduction of large iron pieces such as 
railway wagons, stripping of used goods such as cars in order to 
obtain re usable parts, stripping of used goods such as cars or 
refrigerators to eliminate harmful waste (oil, cooling liquid, 
fuel) 
(b) and excluding: 
(i) manufacture of new products from secondary raw material 
unless qualifying under paragraphs 03, 04, 05, 06, 07, 08, 09, 
10, 13, 14 and 15 
(ii) wholesale in waste and scrap including collecting, sorting, 
packing, dealing without an industrial process 
(iii) wholesale or retail sale trade in second hand goods 
11.02 Recycling of non-metal waste and scrap, 
(a) including: 
(i) processing of non-metal waste and scrap and of non-metal 
articles whether or not used, into secondary raw material. 
Typical is that, in terms of commodities, input consists of waste 
and scrap, the input being sorted or unsorted but always unfit 
for further direct use in an industrial process whereas the output 
is made fit for further processing and is to be considered then as 
an intermediate good. A process is required, either mechanical 
or chemical, such as reclaiming of rubber such as used tyres to 
produce secondary raw material, sorting and pelleting of 
plastics to produce secondary raw material for tubes, flower 
pots, pallets and the like, reclaiming of chemicals from 
chemical waste, crushing, cleaning and sorting of glass, 
crushing, cleaning and sorting of other waste such as demolition 
waste to obtain secondary raw materials 
(b) and excluding: 
(i) production of new products from secondary raw material such 
as spinning of yarn from garneted stock or making pulp from 
waste paper or retreading tyres should be classified in the 
appropriate class of manufacturing 
(ii) treatment of food, beverages and tobacco waste 
(iii) processing of depleted thorium or uranium 
(iv) wholesale in waste and scrap including collecting, sorting, 
packing, dealing without an industrial process 
(v) wholesale or retail sale trade in second hand goods 
12. Manufacture of chemicals and chemical products 
12.01 Manufacture of industrial gases, 
(a) including: 
(i) manufacture of liquefied or compressed industrial or medical 
gases: elemental gases, liquid or compressed air, refrigerant 
gases, mixed industrial gases, inert gases such as carbon 
dioxide, isolating gases 
(b) and excluding:

70 gS.L.325.06 BUSINESS PROMOTION 
(i) extraction of methane, ethane, butane or propane 
(ii) manufacture of fuel gases such as ethane, butane or propane in a 
petroleum refinery 
13. Manufacture of Musical Instruments 
13.01 Manufacture of musical instruments, 
(a) including: 
(i) manufacture of stringed instruments 
(ii) manufacture of keyboard stringed instruments, including 
automatic pianos 
(iii) manufacture of keyboard pipe organs including harmoniums 
and similar keyboard instruments with free metal reeds 
(iv) manufacture of accordions and similar instruments including 
mouth organs 
(v) manufacture of wind instruments 
(vi) manufacture of percussion musical instruments 
(vii) manufacture of musical instruments, the sound of which is 
produced electronically 
(viii) manufacture of musical boxes, fairground organs, calliopes and 
similar items 
(ix) manufacture of instrument parts and accessories: metronomes, 
tuning forks, pitch pipes, cards, discs and rolls for automatic 
mechanical instruments and similar items 
(x) manufacture of whistles, call horns and other mouth blown 
sound signalling instruments 
(b) and excluding: 
(i) publishing and reproduction of pre-recorded sound and video 
tapes and discs 
(ii) manufacture of microphones, amplifiers, loudspeakers, headphones 
and similar components which is a qualifying activity in 
terms of paragraph 07.03 of this Schedule 
(iii) manufacture of record players, tape recorders and similar items 
which is a qualifying activity in terms of paragraph 07.03 of 
this Schedule 
(iv) manufacture of toy instruments which is a qualifying activity in 
terms of paragraph 15.01 of this Schedule 
14. Manufacture of sports goods 
14.01 Manufacture of sports goods, 
(a) including: 
(i) manufacture of articles and equipment for sports, outdoor and 
indoor games such as hard, soft and inflatable balls, rackets, 
bats and clubs, skis, bindings and poles, sailboards, requisites 
for sport fishing including landing nets, requisites for hunting, 
mountain climbing, leather sports gloves and sports headgear, 
basins for swimming and paddling pools, ice-skates, rollerskates, 
bows and crossbows and gymnasium or athletic 
equipment 
(b) and excluding: 
(i) manufacture of boat sails 
(ii) manufacture of sport clothing 
(iii) manufacture of saddlery and harness 
(iv) manufacture of sports footwear

BUSINESS PROMOTION gS.L.325.06 71 
(v) manufacture of weapons and ammunition 
(vi) manufacture of sports vehicles other than toboggans and the 
like unless qualifying under paragraph 09 of this Schedule 
(vii) manufacture of boats 
(viii) manufacture of billiard tables and bowling equipment which is 
a qualifying activity in terms of paragraph 15.01 of this 
Schedule 
(ix) manufacture of whips and riding crops 
15. Manufacture of games and toys 
15.01. Manufacture of games and toys, 
(a) including: 
(i) manufacture of dolls and doll garments and accessories 
(ii) manufacture of toy animals 
(iii) manufacture of wheeled toys designed to be ridden including 
tricycles 
(iv) manufacture of toy musical instruments 
(v) manufacture of articles for funfair, table or parlour games 
(vi) manufacture of playing cards 
(vii) manufacture of pin-tables, coin operated games, billiards, 
special tables for casino games, automatic bowling alley 
equipment and similar items 
(viii) manufacture of electronic games: video games, chess and 
similar games 
(ix) manufacture of reduced-size (“scale”) models and similar 
recreational models, electrical trains, construction sets and 
similar models 
(x) manufacture of puzzles and similar games 
(b) and excluding: 
(i) manufacture of bicycles 
(ii) manufacture of festive, carnival or other entertainment articles 
16. Building of pleasure and sporting boats 
16.01 Building of pleasure and sporting boats 
(a) including: 
(i) building of inflatables 
(ii) building of sailboats with or without auxiliary motor 
(iii) building of motor boats 
(iv) building of other pleasure and sporting boats such as canoes, 
kayaks, skiffs and similar pleasure and sporting boats 
provided such vessels are not used in a trade or business consisting of the 
transportation of passengers or goods but including vessels, which 
although used in such a trade or business, are so used for the 
transportation and accommodation of passengers in vessels not having 
more than thirty berths 
(b) and excluding: 
(i) manufacture of marine engines which is a qualifying activity in 
terms of paragraph 04.01 of this Schedule 
(ii) manufacture of sailboards which is a qualifying activity in 
terms of paragraph 14.01 of this Schedule.

72 gS.L.325.06 BUSINESS PROMOTION

BUSINESS PROMOTION gS.L.325.06 73

