The Audit Report Waiver and Deduction Rules were implemented by means of Legal Notice 306 of 2017, introducing the possibility for companies to avail themselves from a deduction on income as from year of assessment 2018.
Salient features of these rules
Company has an annual turnover that does not exceed €80,000 or a pro rata amount if the relevant accounting period is other than twelve months;
Company does not avail itself of the audit report waiver in accordance with the second proviso to article 19(4)(a) of the Income Tax Management Act, Chapter 372 of the Laws of Malta;
The deduction is capped at 700 euro per accounting period;
The deduction is applicable for the first two accounting periods of a newly registered company whose sole shareholders are individuals in possession of educational qualifications in accordance with these rules;
No change in shareholding unless such shareholders qualify as mentioned above.
Eligible companies may claim a deduction against its income of 120% of the audit fees incurred.