Malta - your partner in film production
By George Farrugia
 What
do actors like Madonna, Russell Crowe, Brad Pitt and Richard Harris
have in common? They all have sampled the excellent filming opportunities
that Malta offers for any type of film production, this being a
large budget film like Gladiator
or a short 30 second commercial.
With its beautiful Mediterranean climate and deep blue sea, coupled
with beautifully maintained Baroque palaces, Christian cathedrals,
military fortifications and old Arab citadels, Malta definitely
offers a unique filming set . The smallness of the island –
only 18miles by 8miles – makes the transfer from one location
to the next effortless as nowhere in Malta is more than 1 hour’s
travel by car.
In addition to its natural beauty, the Mediterranean
Film Studios offers one of the world’s best and most cost
effective water filming facilities with three water tanks that cater
for any type of filming, be it surface or underwater. Whilst the
Malta Film Commission
acts as a one stop-shop meeting all the requirements of filming
companies from pre-production to the film editing stage.
Today this small island is often referred to as the Hollywood of
the Mediterranean, and this is confirmed by the long and impressive
list of films that were either fully or partly filmed here, the
most recent of which is MUNICH
by Stephen Spielberg.
In order to maintain and even enhance on the island’s leading
position in the filming industry in Europe, the local authorities
try to ensure that film production units have a seamless experience
on the island. They are also provided with the best possible fiscal
and other incentives.
Fiscal incentives for filming in
Malta
Foreign film production companies are only subject to tax in Malta
on income arising or remitted to Malta. If there is a double taxation
treaty between the two countries; such tax may be available as a
credit in the country of residence of the film production company.
If a company is formed in Malta it will be subject to taxation at
35% on its world-wide income. However, under the Business Promotion
Act (BPA) the production of feature and television films, adverts
and documentaries are considered qualifying activities, with the
result that the taxation of the profits resulting from these activities
is taxable at reduced rates of income tax as follows:
• First 7 years @ 5%
• Next 6 years @10%
• Next 5 years @15%
A system of Investment Tax Credits (ITCR’s) further reduces
the company’s liability to direct taxation on profits.
In the case of Value Added Tax, most of the VAT paid on services
received by the filming company whilst in Malta are fully recoverable.
Financial incentive
A cash rebate of up to 20% of eligible expenditure in Malta is
also given on completion of production. Regulations covering this
rebate are applicable. Many of the necessary production activities
are covered by this rebate including but not limited to labour,
catering, equipment and vehicle hire and professional fees. Feature
film, television productions, mini-series, animation and documentaries
partly produced in Malta are all eligible for the incentive.
Employment
Block work permits can be obtained within a short time for expatriate
employees; provided that there are not any Maltese of equal expertise.
No tax is paid by expatriate employees on income remitted or received
in Malta if their stay is for less than six months. Whilst an exemption
from payment of Maltese Social Security Contributions is also granted
to such employees who are in Malta for a short time on the filming
set.
Employment of part-time local extras would be subject to 15% withholding
tax on income arising in Malta. No Social Security Contributions
need to be paid provided that such job is not their main employment.
Otherwise the minimum contribution would be payable.
Customs
On temporary importation of goods required for filming; no duty
is charged if these are re-exported within 3 months or such further
period allowed by the Controller of Customs. Only on consumables
(including foodstuffs) an import tax is paid. Appropriate permits
are needed for arms (including imitation), ammunition, wireless
equipment and animals.
How Can MGI Malta help?
At MGI Malta we can offer most of the services you will require
both before and during your filming project such as
• Arranging meetings with relevant authorities
• Registration of company-if required
• All payroll, taxation and VAT formalities
• Work permit application
• General Consultancy and advice.
Disclaimer
The above information is being provided
as a general guide only and should not be considered as a substitute
for professional advice.
George
Farrugia is the founding partner of MGI Malta. He can be reached
at
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