Through this measure – which was announced during Budget 2016 - companies giving donations to non-profit cultural organisations, public cultural organisations or to Arts Council Malta as an intermediary on behalf of a beneficiary, may claim the amount donated at 150% against the income for the year of assessment when the donation was made. The maximum tax deduction is capped at €50,000. This incentive is effective as of 1st January 2016.
“Any donations made through this scheme are an added investment in the cultural and creative sectors – over and above the 52.5 million euro already allocated to these sectors during Budget 2016,” said Finance Minister Edward Scicluna at the launch.
“This initiative aims to bring together business and the arts to create solid relationships between these two sectors,” added Culture Minister Owen Bonnici.
The new measure is also one of the 70 actions of Strategy2020 for the cultural and creative sectors in Malta.
While the measure aims to provide an incentive for the private sector to invest in the arts – an incentive for arts patronage - Arts Council Malta is also working on a number of initiatives in the field of business development.
“Nurturing creative potential and supporting its development into professional activity is in fact one of the strategy’s five main goals,” said Arts Council Malta chair Albert Marshall.
Among the initiatives being taken in this field is the ongoing collaboration between Arts Council Malta and Malta Enterprise, with a representative from Malta Enterprise focusing specifically on business development in the cultural and creative sectors.
Other measures include the extension of some of the Malta Enterprise incentives to businesses in the artistic sector as well as the development of new incentives specifically for the sector. The Council is also working on two seed funding programmes – as part of the mentoring process of these two funds, artists will have the opportunity to develop valuable business skills.
The new tax deduction scheme will operate through donations – not sponsorships. Unlike sponsorships, that often take the form of advertising or promotion within the cultural event, companies giving donations for arts and culture are providing a donation freely without requesting any services from the beneficiary. This also means that donors are not charged VAT on the donation. Donors may be acknowledged publicly by the beneficiary as a patron or supporter of the activity.
This incentive is intended for limited liability companies and those partnerships that are registered to be treated as a company.
Applicants are to submit one application per year for all monetary donations given in the previous calendar year. Applications, together with all supporting documentation, are to be submitted by the 30th January of the year following that in which the donations were made. The application form and respective incentive guidelines can be downloaded from here.