Author: SME Chamber

Change in tax rate cuts – Employers to upgrade payroll
system – Following the approval of the Budget
this week all employers need to update their payroll system to immediately
start to reflect the reduction of tax rate from 35% to 32%. Employees earning between €20,000 and
€60,000 a year should see a 3% per cent increase in their earnings with their
next paycheque.

This increase however is owed since
the beginning of the year because the new lower rate has been backdated to
January 1, meaning eligible workers are now owed a four-month tax rebate by the
Inland Revenue Department.

Employers should shortly be receiving
a circular with payroll update instructions from the Department of Inland
Revenue.

Once payrolls are updated, the Final
Settlement System mechanism would automatically look at how much income tax a
person had already paid this year, calculate how much they should have paid,
and refund the difference.

The changes mean that a person
earning €3,000 monthly before tax will likely find that their monthly €660
income tax deduction suddenly dip to €496 next month, to make up for having
overpaid tax since January. The figure would however then level at €619 for
subsequent months, meaning savings of €41 a month.

Vehicle Registration &
Licensing Measures

Transport Malta notifies that in line
with the new budgetary measures, the following changes will be applicable.
These are in addition to the measures that were already implemented between
January and March 2013 related to reductions in Registration Tax for EURO 5
Light Passenger Vehicles, all Motorcycles, and Goods Carrying Vehicles with a
mass not exceeding 3,500kg.

Measure 1: Registration Tax
on EURO 4 M1 Vehicles

The rates of registration tax for
Category M1 passenger vehicles with up to eight passenger seats besides the
driver's seat, with EURO 4 emission levels, will have their registration tax
increased. (table)

Measure 2:
Minimum Registration Tax for Used M1 Vehicles

The Minimum Registration Tax for Used
Category M1 passenger vehicles with up to eight passenger seats besides the
driver's seat, imported from outside the EU, and having five years from the
year of manufacture, will decrease in accordance with the table below. This
applies only for the lowest two CO2 tax bands (i.e. 0 up to 130g/km) as
follows:

These new minimum tax values will be
applicable as from 29th November 2012, and therefore refunds will be issued to
anyone that would have registered such a vehicle between this date and the 8th
April 2013.

Measure 3:
Conversions to Autogas

Category M1 passenger vehicles with
up to eight passenger seats besides the driver's seat that are either
converted, or run with Autogas will have their CO2 emission levels reduced by
10%. This will:

a) Reduce the registration tax for
vehicles registered as of 1st January 2013; and

b) Reduce the annual circulation
licence fee as of 1st January 2013 for vehicles licensed after January 2009,
and converted to Autogas after 1st January 2013.

Where such a vehicle is converted to
run on Autogas and no emissions are available for a converted vehicle by the
vehicle's manufacturer or by an approved accredited technical service, the CO2
emission value as quoted for an unconverted vehicle shall be automatically
reduced by 10%. Transport Malta will then use this value to calculate the
applicable annual circulation licence fee or registration tax as applicable.

Measure 4:
Registration Values for Authorised Licensed Dealers and Importers

Licensed vehicle dealers and
importers will have the facility to establish a fixed registration value for
their vehicle (for registration tax calculation purposes) at registration
stage, and the payment of the registration tax will be deferred until the
vehicle is actually licensed. This enables the licensed vehicle dealers and
importers to reduce the risk of fluctuations in registration values from the
time the vehicle is brought into Malta, and the time it is actually sold and
licensed. Individuals already have until the end of the month following when
the value would have been established.

This measure applies for all vehicle
values established as of the 29th November 2012.

Measure 5:
Classic, Vintage or Veteran Vehicles including Motorcycles

a) The single plate scheme that was
available to individuals who have more than one vehicle qualifying as classic,
vintage or veteran vehicles, enabling to pay once annual circulation fee for
all the fleet, will be abolished as of the individual vehicles' next licence
renewal date. Therefore as of the 29th November 2012, and all Classic, Vintage
or Veteran vehicles will not pay an annual circulation licence fee and will
only pay an administrative fee of €8 per vehicle on the renewal of the annual
circulation licence fee.

b) As of 29th November 2012, a
vehicle will classify as a Classic, Vintage or Veteran Vehicle at the age of 30
years from year of manufacture instead of 35. Such vehicles will continue to be
certified by a Vintage Vehicle Classification Committee appointed by Transport
Malta in accordance with the law.

c) Category M1 passenger vehicles
with up to eight passenger seats besides the driver's seat with an age of 50
years or over from the year of manufacture, and certified authentic by the
Vintage Vehicle Classification Committee appointed by Transport Malta, will not
pay any Registration Tax as of the 29th November 2012.

d) Motorcycles with an age of 50
years or over from the year of manufacture and certified authentic by the
Vintage Vehicle Classification Committee will not pay any Registration Tax as
of the 29th November 2012.

e) Goods Carrying Vehicles with an
age of 50 years or over from the year of manufacture and certified authentic by
the Vintage Vehicle Classification Committee will not pay any Registration Tax
as of the 29th November 2012.

Measure 6:
Annual Circulation Licence Fees (M1 Vehicles over 250g/km)

The Annual Circulation Licence Fee
for Category M1 passenger vehicles with up to eight passenger seats besides the
driver's seat that were registered on or after the 1st January 2009, and
falling within the highest CO2 category (ie. over 250g/km), and aged 11 years
or over, have been reduced as per the table below.

These new minimum tax values will be
applicable as from 29th November 2012, and therefore refunds will be issued to
anyone that would have paid such fee between this date and the 8th April 2013.

Measure 7:
Refunds on previously introduced measures

With regard to the measures that were
already implemented between January and March 2013 related to reductions in
Registration Tax for EURO 5, Passenger (M1) Vehicles, all Motorcycles, and
Goods Carrying Vehicles with a mass not exceeding 3,500kg, Transport Malta will
be issuing refunds in the coming weeks as stipulated below:

a) M1 (Passenger cars) with EURO 5 or
6 emission levels and registered between the 11th December 2012 and the 13th
January 2013;

b) N1 (Goods Carrying Vehicles) with
EURO 5 or 6 emission levels and registered between the 11th December 2012 and
the 1st March 2013;

c) Motorcycles registered between the
11th December 2012 and the 1st March 2013.

Incentive Schemes

Hotels: Malta Enterprise will allow licensed hotels to
benefit from an uncapped 15% tax credit calculated by reference to the capital
investment made.

Boutique Hotels: Tax deductions on investments related
to the purchase and development of Boutique Hotels in Valletta, Mdina and the Three Cities.
These will also benefit from reduced MEPA and MTA fees.

MicroInvest: Extended for another 2 years and applies
not to businesses that do not employ more than 30 persons (while before the
maximum was 9 employees)

B Start: Existing businesses will be able to claim a
deduction from their income tax liability up to €30,000 where there invest in
seed capital in new approved companies

Maternity leave

Maternity leave entitlement was
extended by two weeks in 2012 to 16 weeks and will increase by a further two
weeks in 2013.

Energy Incentives

New incentives for the installation of
PV panels that are not supported through other funding. The incentives take the
form of attractive feed-in tariffs as follows:

High Energy User Scheme which applied
to factories that consumed more than 2GwH per year, extended to industries and
hotels in Gozo

Changes in excise

Increase in excise duty of 6% on cigarettes and 8% on
tobacco

Increase in petrol and diesel by 2c per litre

Increase in excise duty on cement by €5 per 1000kg

The external session of the SMEST
workshop was attended by some 30 participants coming from various SME sectors
and from trade associations.  Following
an introduction, Ing. Francis P. Farrugia gave a presentation on the topic of
Engaging SMEs in Standardization.

The work carried out by the
Standardization Directorate was explained and discussed with the participating
members throughout the session. The discussion dealt with the list of published
standards and also with those standards that are still under preparation. A
list of Mirror Technical Committees where Maltese SMEs are contributing to the
development of European and international standard was also discussed
throughout the external session. This workshop was also an opportunity for the
Standardization Directorate to present its various services such as an SME
helpdesk, certification schemes and various training courses.

An active discussion took place where
difficulties being faced by SMEs were highlighted. These problems may include
the lack of expertise in this area, the time to spare for standardization
matters as many SMEs may be already overloaded with activities, the cost of
participation which involves not only travel costs but also business
opportunity loss. The discussion followed on how SMEs can become more involved
in the process of standardization and on the benefits that SMEs can gain
through this process.

On this matter, suggestions from
participating SMEs included more interaction between the relevant bodies that
assisted SMEs. During the intensive discussion, it was suggested that such
entities should organize road shows to invite SMEs where information activities
can be held to engage the said SMEs.

From an Industry point of view GRTU's
representative Carmen Borg explained GRTU's role in supporting SMEs and
encouraging them to take a more active part in standardization. Focusing in
particular on the developments of National Standards on vocational competences.

From a Cen-Cenelec perspective, Ms
Ingrid Soetaert gave a demonstration of the SMEST website and explained the
various tools for SMEs to make the best use of standardization. Ms Soetaert
made various live demonstrations how SMEs can search for published and draft
standards as well as gather experience from other European SMEs.  Both websites; www.smest.eu and
www.cencenelec.eu were mentioned so as to encourage SMEs to browse through
these sites and get the information and material that they need.

The meeting was concluded with two
case studies. One case study was presented by Mr. Ronnie Galea, a Maltese
delegate for CEN TC 404 on Pest Management Services. The second case study was
then presented by Ms. Magda Magri Naudi, another Maltese delegate for CEN TC
409 on Beauty Salon Services. Both shared their experiences of participating in
Technical Committees and mentioned the various benefits of standards which
include; the ability to participate in the promotion of the standard, the
thorough understanding of the standard and it's design, the enhancement of a
corporate image as an industry leader, the advantage of having information
coming straight from the source, as well as beneficial contacts with other
specialized professionals within the industry.

The Public holidays
that are still exempt for 2013 are:

Wednesday 1st May

Friday 7th June

Saturday 29th June

Sunday 8th September

Saturday 21st September

Workshop 1:
Innovation in Business – Speaker: Ing David Dingli, Resource
Productivity Consulting Services – Topic: Innovation is the development
of new values through solutions that meet new requirements; it differs from
invention [1] in that innovation refers to the use of a better and, as a
result, novel idea or method,

whereas invention refers more directly to the
creation of the idea or method itself. Innovation also differs from improvement
[2] in that innovation refers to the notion of doing something different rather
than doing the same thing better. Join this seminar to learn how this can be
applied to your business operations!

Date: 17th April

Time: 3.00 PM TO 4.00 PM

Workshop 2:
Family Business- Developing Governance for successful Transitions

Date: 17th April

Time: 4.00 PM TO 5.00 PM

Speaker: Mr. Mario Duca, Family
Business Consultant and Chairman of the Malta Association of Family Enterprises

Topic: While many family owned
businesses have a long-term objective of "passing the business on to the
next generation", in reality, only about 30% of family owned businesses
successfully transfer to the second generation. Furthermore, only about 15%
make it to the third generation, and only about 5% make it to the fourth
generation. Why are so many family businesses unsuccessful at making the
transition to the next generation? Possible underlying reasons will be
discussed at this workshop.

Workshop 3:
Procurement Opportunities in the World Bank Date: 18th April

Time: 3.00 PM TO 4.00 PM

Speaker: Mr. Gilles Garcia,
Enterprise Outreach Services, World Bank

Topic: Mr Garcia from the Paris
office of the World Bank will be visiting Malta to generate further awareness
about the business opportunities available to SMEs who wish to offer their
products and services to the World Bank agencies. Mr Garcia will be also available
for individual meetings [by appointment please].

Session will be held at Radisson Blue
Hotel, St Julian which are free of charge, however attendance must be
registered on:

A measure announced in the year's
Budget (adopted this week) states that the registration tax rates for EURO 4
vehicles has been increased. This with immediate effect.

As part of a review of possible
transition measures, Transport Malta is collecting information from licensed
importers and dealers to take stock of the amount of used vehicles that have
been brought into Malta or ordered by the 8th April 2013 with a EURO 4 engine.
At this stage, all that is required is the total stock of vehicles in Malta or
on order. Therefore no detailed lists are required.

You are
required to send us the total stock by email on by Monday the
15th April 2013.

In less than a month, May 2nd, we might just start seeing the
new series of ‘Europa' €5 banknotes as this is the official date launching its
circulation. The €10 will start circulating next January. This is an important
event for businesses as they and their employees must become aware, by May 2nd,
that they should start accepting this new banknote.

During the meeting GRTU Members were updated with the
developments and given information on the new Euros and the way they will be
circulated, informed about how they can prepare and what support can be
provided, shown what the new banknotes will look like and the enhanced security
features and given a brief training on how to recognize counterfeits. 

The new euro banknotes series incorporates enhanced security
features drawing on advances in banknote security and technology. This series
was called "Europa" because it shows a portrait of the Greek mythological
figure Europa. This portrait was chosen because it has a clear association with
the continent of Europe and also adds a human touch to the banknotes.

Another meeting for businesses will be held as follows:

Date: Tuesday 23rd April 2013

Time: 14:00 – 15.30

Venue: GRTU Republic Str, Valletta

Registration is required on 21232881 or

The introduction of this new series is part of the on-going
development of euro banknotes to make them even more secure. The European
Central Bank and the national central banks make every effort to safeguard the
integrity of the euro banknotes by regularly upgrading and improving their
security features.

The Europa series has the same "ages and styles" design and
dominant colours as the first series. The new banknotes are to be introduced
gradually over several years, in ascending order and starting with the new €5
banknote as of 2 May 2013. The denominations remain unchanged: €5, €10, €20,
€50, €100, €200 and €500.

The new €5 banknote includes some new and enhanced security
features. The watermark and hologram both display the portrait of Europa. The
eye-catching "emerald number" changes colour from emerald green to deep blue
and displays an effect of the light that moves up and down. Short raised lines
on the left and right edges of the banknote make it easier to identify the
banknote, especially for visually impaired people. They are easy to check using
the "FEEL, LOOK, TILT" method.

The first series will initially circulate alongside the new
banknotes, but gradually will be withdrawn from circulation. The euro banknotes
of the first series will remain legal tender.

Further information is available from the website
www.newfaceoftheeuro.eu. This website includes the "Euro Cash Academy", a
learning module which takes a playful approach to the new €5 and other euro
banknotes.

GRTU has this week welcomed a
Tunisian delegation which gave GRTU a courtesy call. During the meeting it was
recognised that both Malta and Tunisia have developed strongly and they are
very close countries and there is no reason as to why Malta and Tunisia's
cooperation is stronger.

There is a lot of room and opportunity for
cooperation. GRTU emphasised that it is a pity that Maltese importers import
Tunisian products from countries that are far instead of directly from Tunisia.
The companies that formed part of the
delegation came from the following sectors:

Tunisia now finds itself as an
export-oriented country in the process of liberalizing and privatizing an
economy. Tunisia has a diverse economy, ranging from agriculture, mining,
manufacturing, and petroleum products, to tourism. In 2008 it had a GDP of US
$41 billion. The agricultural sector stands for 11.6% of the GDP, industry
25.7%, and services 62.8%. The industrial sector is mainly made up of clothing
and footwear manufacturing, production of car parts, and electric machinery.
Although Tunisia managed an average 5% growth over the last decade it continues
to suffer from a high unemployment especially among youth.

Tunisia was in 2009 ranked the most
competitive economy in Africa and the 40th in the world by the World Economic
Forum. Tunisia has managed to attract many international companies such as
Airbus and Hewlett-Packard. Tourism accounted for 7% of GDP and 370,000 jobs in
2009.

The European Union remains Tunisia's
first trading partner, currently accounting for 72.5% of Tunisian imports and
75% of Tunisian exports. Tunisia is one of the European Union's most
established trading partners in the Mediterranean region and ranks as the EU's 30th
largest trading partner. Tunisia was the first Mediterranean country to sign an
Association Agreement with the European Union, in July 1995, although even
before the date of entry came into force, Tunisia started dismantling tariffs
on bilateral EU trade. Tunisia finalised the tariffs dismantling for industrial
products in 2008 and therefore was the first Mediterranean country to enter in
a free trade area with EU.

Tunis Sports City is an entire sports
city currently being constructed in Tunis, Tunisia. The Tunis Financial harbour
will deliver North Africa's first offshore financial centre at Tunis Bay in a
project with an end development value of US$ 3 billion. The Tunis Telecom City
is a US$ 3 billion project to create an IT hub in Tunis.

More information if interested in
investing in Tunisia can be found on:
http://www.state.gov/e/eb/rls/othr/ics/2012/191253.htm  

GRTU in collaboration with other
organisations is planning a business delegation to Cuba. We would like to know
if Maltese businesses would be interested to explore business opportunities in
Cuba and potentially participate in this delegation? Send an email on if
interested.

General
Information

Capital:
La Habana (Havana)

Official
language: Spanish

Surface:
110,992 km2 archipelago with more than 1600 Islands, islets and cays.

Population
: 11 millions 163 thousands 934 persons. 50.09% women.

102
inhabitants by km². 75 % live in urban zones

Unemployment
rate: 1.6%

More
than 2,500 cultural institutions.

Social
improvements

Cuba has focused on improving its
social environment by developing projects oriented to protect minorities and to
promote the respect to diversity: racial, ethnic, religious and gender.

Tourism

Increase
of 20% in the last five years

Number
of travellers increased by 15% in years 2010 and 2011

Natural
resources and advantages for tourism

Considerable
increase of hotel capacities

The
Countries Main Exports include

Nickel

Medical
and Biotechnological products such as antibiotics, vaccines, monoclonal
antibodies, veterinary use medicaments, equipments for neurological and
rehabilitation use

Fuels

Sea
products

Sugar
and by products

Cigars

Software
development, informatics integrated solutions, automation services and
technical assistance.

The
Countries Main Imports include

Oils
and Lubricants

Machinery

Equipments

Parts
and Components

Food

Metal
and Manufactures

Chemicals

Why should
you invest in Cuba?

Highly
qualified labour force

Indicators
of population health

Climate
of security offered to the foreign staff

Political
and social stability

Adequate
infrastructure, highlighting more than 95% of electrification of its territory

Natural
resources

Industrial
culture

Great
development and Government promotion of research and development (R & D)
activity, technological innovation and its applications

Agile
and reliable national system of intellectual property administration

Geographical
location in the centre of an expanding market and important trade routes

Participation
of Cuba in regional integration mechanisms

Incentives
to Foreign Investors  in Cuba

The State guarantees foreign
investors free transference abroad, in freely convertible currency, free from
taxes or any fee related to net profits or dividends obtained as a result of
the investment. Income taxes are levied at a rate of thirty percent (30%) of
net taxable income. In cases considered in the nation's interest, the Executive
Committee of the Council of Ministers can exempt all or part of the tax on net
income that is reinvested in the country. It's possible to apply other
incentives according to the special characteristics of each project.

"The European Commission is confident
that Croatia will be ready for membership on 1 July 2013". These are the words that we read in
the last monitoring report presented last 26 March in Brussels. "It is good news – said the European
Commissioner for Enlargement and European Neighbourhood Policy , Štefan
Füle  – The results will directly benefit
the citizens."

The report, consists of 15 pages, it
specifically states that Croatia "has shown the will and ability to fulfil
all outstanding commitments in good time before accession".

But Croatia's journey to the EU has
sometimes been turbulent and it took 10 years of negotiations before they
managed to arrive to this result.

Now, however, Croatia has
successfully completed all ten so-called "priority actions" or
reforms considered essential by Europe like:

Shipyards:
As requested, Croatia has privatised the Brodosplit shipyard.

Courts:
The backlog of cases is being reduced, court presidents have been empowered,
and transparency has been increased.

Enforcement
of court rulings: The system has been adjusted and the clearance rate has
improved.

Conflicts
of interest: A Conflict of Interest Commission was established on 25 January
and has since started procedures against 26 officials (including one against
the agriculture minister, Tihomir Jakovina).

Freedom
of information: A new law on access to information was adopted in February, and
the post of commissioner responsible for access to information has been
created.

Migration:
Parliament adopted a migration strategy for 2013-15 in February that also addressed
the particular concern of how vulnerable migrants are integrated.

Border
posts: Two border crossing points will be built by the date of accession, and a
third is about to be completed.

Border
police: Croatia recruited 467 border police in 2012, as planned, and will take
on 100 more this year.

Police
law: The Commission wanted 36 by-laws adopted. These were adopted, and have
been in force since 1 January.

Translation:
Croatia has "considerably increased the pace of translating and revising" the
corpus of EU law, the acquis communautaire. By mid-March, 118,000 pages had
been translated and revised, suggesting that the task will be completed "before
accession".

This does not mean that everything is
perfect. Decreasing the load of judicial proceedings pending for example, will
take years.

Croatia must also "intensify
efforts" on the prevention of corruption, immediately putting in place
measures to identify conflicts of interest.

For Croatia to join the European
Union however is a unique opportunity, at only 22 years of independence and a
little more than ten years after the dissolution of Yugoslavia.

Its excellent geographical location
and historical ties with other countries in Eastern Europe and the Middle East
allow investors access to a market of 500 million people.

In addition, Croatia has had a steady
economic growth over the past four years and a low rate of inflation: this
guarantees investors a stimulating and safe environment to do business.

One should not forget that the labor
costs in Croatia is four times lower than the European average, lower than half
of the EU countries such as Hungary and Poland.

Meanwhile, waiting for July 1, Zagreb
looks at the last five Member States that need to complete the ratification
process: Germany, Netherlands, Denmark, Belgium and Slovenia.