The plastic continent — and how to tackle it — may be hogging the headlines, but the shipping industry – frowned upon as a notorious polluter on a massive scale – is also being effectively reined in and compelled by law to go green. EU legislation and the International Maritime Organisation (IMO) are wielding their increasingly environmental sustainability vision and doing so in a holistic manner that is impacting shipping worldwide.

Indeed the targeted spheres are:

• Sea transport of toxic waste
• Dismantling of ships
• Sulphur emissions

In all fairness, a more environmentally conscious shipping industry has long been taking shape.

Sea transport of toxic waste

Spearheaded by the United Nations Environment Programme (UNEP), the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (Basel Convention), set the ball rolling to mitigate the risks of transporting toxic waste across the oceans in 1989. Despite expected resistance and taking three years to be enforced, the ratification of 186 countries provided a step in the right direction.

The Basel Convention was aimed at reducing the transfer of hazardous waste from developed to less developed countries, but not prohibiting them. Thus the Basel Convention relies on the ‘prior informed consent’ of the authorities of the respective importing countries to ensure that any hazardous waste is treated in an environmentally sound manner by the importing countries in question. While environmental issues began to gain traction, the Basel Convention could not guarantee a foolproof outcome, more so when 1-off cases were occasionally allowed to bypass the rules.

An attempt at more stringent control was adopted in 1995, when the Basel Convention introduced its ‘Ban Amendment’ to prohibit the export of all toxic waste from OECD to non-OECD countries. Yet, once again, insufficient ratification proved a stumbling block. Indeed, the Ban amendment will enter into force on December 5, 2019, since Croatia ratified it on September 6, 2019, being the last ratification required to meet the three-fourths (of the State Parties to the Basel Convention) ratification threshold.

The Basel Convention’s effectiveness in regulating ship recycling began to lose favour, since its code of practice was not comprehensive enough, particularly as the adverse impact of climate change started to dominate political agendas.

This goaded the EU to enforce the Basel Convention, the ‘Amendment Ban’ and the OECD Decision C (2001)107/FINAL, unilaterally in 2006 through its Regulation (EC) No 1013/2006 on shipments of waste, known as the European Waste Shipment Regulation (WSR). The WSR includes a ban on the export of hazardous wastes to non-OECD countries, as well as a ban on the export of waste for disposal. This stipulated that, since the dismantling of ships was now deemed as ‘hazardous waste’ and as long as the conditions adopted by the WSR are satisfied, no end-of-life ship leaving any EU port could be exported to a non-OED country to be scrapped. In fact, the concept of flag state was once again waived off. The outcome of this regulation did not prove successful so in order to strengthen Member States' inspection systems, WSR was amended in 2014 through Regulation (EU) No 660/2014 of 15 May 2014.

Dismantling of Ships

The arduous and hazardous dismantling of old and decommissioned vessels is a nightmare on all fronts - health & safety, logistical and environmental. More so when carried out on beaches - a horrifying reality - especially in the Far East. The complexities involved also need to factor in the skewed size-age distribution of the world’s fleet, since smaller ships operating in domestic waters weather much better than large ocean-going vessels that tend to be scrapped at around 25 years of age.

Moving towards a circular economy, however, has been piling on the pressure for greener solutions that obviously recognize ship recycling as the best solution for ships ceasing operations.

In May 2009, the Hong Kong International Convention (Hong Kong Convention) for the Safe and Environmentally Sound Recycling of Ships brought 63 countries together to formulate guidelines that would mitigate the operational and environmental risks involved in the reprocessing and scrapping of ships in the world’s recycling locations. As a result, the Hong Kong Convention addressed human health issues vis-a-vis working conditions, particularly workers’ occupational and safety conditions at the ship recycling facilities (defined areas used for ship recycling). Basics such as providing workers with adequate protective equipment and training became mandatory, while a nearby hospital became another prerequisite.

The complexities in compiling these guidelines and subsequent compliance were further shackled (and continue to be shackled) by the entry into force criteria which were bound to:

• a minimum number of ratifications; 
• ratified states should represent 40% of world merchant shipping by gross tonnage;
• a combined maximum annual ship recycling volume of the said states should amount to at least 3% of their combined merchant shipping tonnage during the preceding 10 years.

Four years on, the European Union entered the fray in the role of champion and reinforcement of the said Hong Kong Convention. Given its clout of 35% ownership of the global merchant fleet[1] and its mission to raise the standards bar, the EU adopted its Regulation on Ship Recycling at the end of 2013 allowing a 5-year grace period until full implementation; the regulation is effective from January 2019. From the very beginning of 2019, a new chapter regarding the recycling of vessels began to be written.

Touted as “the only legally binding and comprehensive instrument on ship recycling in force in the world today,” EU Regulation No. 1257/2013 stipulates that all EU-flagged vessels have to be dismantled according to strict guidelines in one of the approved European List shipyards. Although most of these yards are located within the EU, a few are situated in Turkey and the U.S.A. Significantly, the invitation is open for other shipyards to join the list as long as they meet the stringent requirements. As for the European List of Authorised Ship Recycling Facilities, this has been last updated on 17 June 2019 by the Commission’s Implementing Decision 2019/995 of that date. At the same time, the EU has come under fire for stalling a number of applications.

Nevertheless, even the most cynical of skeptics cannot dispute that the EU Regulations are a step in the right direction of sustainability, especially since no specific global rules on ship recycling exist. Putting lives and the planet at risk is no longer acceptable. Minimizing waste and repurposing valuable materials - primarily steel - point to another two linked priorities. These in turn both reduce the need for mining while creating a lucrative market buoyed by perpetual recycling.

Any detractors of the EU’s Ship Recycling Regulation were recently put in place by the criminal prosecution in Rotterdam of Seatrade in March 2018, after its directors were found to have breached existing EU regulations by indirectly selling ships to scrap yards in non-OECD countries. The implications of this case amply manifest that no ship owner (of any flag) can ‘mis-declare’ its intended destination when leaving European waters for recycling and hope to get away with violation of the rules. Even more significantly, resorting to reflag outside Europe to avoid pertinent regulation will fall under scrutiny to ascertain that bypassing the rules is not intended. 

Sulphur Emissions

No maritime environmental write-up would be complete without a reference to the 0.5% Sulphur Cap imposed by the IMO for ships operating outside Emission Control Areas, effective as from January 1, 2020.

The current Sulphur Cap stands at 3.5%, meaning that the new limit will result in a drastic reduction in the maritime industry carbon footprint.Regarding applicability, the 2020 cap will apply to all ships flying the flag of a state that has ratified MARPOL Annex VI and/or calling at a port or passing through the waters of a state that has ratified the MARPOL Convention. This will eventually include a great number of the world’s fleet.  The new regulations are already boosting the production of liquefied natural gas (LNG) and other compliant alternative bunkers. The option is, however, dependent on the availability of a worldwide network of LNG bunkering infrastructure.

Shipowners who will not opt for LNG and would still like to make use of Heavy Fuel Oil (HFO) should install scrubbers or exhaust gas cleaning systems onboard their vessels, which is a time-consuming exercise involving a hefty capital outlay and more structural modifications.

While environmentalists cheered the news of the revised sulphur cap, several stakeholders have expressed their doubts, primarily where the use of scrubbers is concerned. Detractors argue that shifting pollution from the sea to the air is a perfectly futile exercise. They argue that the onus lies on oil refineries and other alternative fuel providers to produce eco-gasses in the first place. Meanwhile, they advocate slow steaming.

Should slow-steaming become obligatory across the board, the maritime industry is in for a massive re-think.

What are the immediate implications?

Environmentally speaking, slower speed should reduce carbon dioxide emissions.  The biggest hurdle is to maintain market driven delivery dates. On the other hand, it is argued that the proposal would be counterproductive, since it would necessitate an increased number of vessels at sea to ensure current and future demand expectations.  It would even trigger an increased demand for more vessels to be built, therefore escalating the strain on the environment. Furthermore, charter markets will cease to operate smoothly, charter and spot rates will spike resulting in a starker imbalance between the gainers and losers in the maritime industry.     

Conclusion

Today’s realities are having the shipping industry increasingly embrace environmental sustainability and, like any other major or minor industry, its future economic viability depends on adopting eco-friendly policies.

Regarding the ever-controversial scrapping of ships, the EU Regulation No. 1257/2013 manifests a concerted effort to improve social and environmental conditions under which ships are dismantled. Yet, even as the EU showcases the busiest of its ‘green’ recycling yard in Ghent, Belgium, it should be kept in mind that none of the EU member states could handle the dismantling of large ocean-crossing vessels. As a result, the success of enforcing the EURegulation No. 1257/2013 depends on winning over non-EU geographically spread scrap yards that factors in the issues of which countries are willing to buy ships and which ones are not reaching full capacity any time soon. Failing to do so would only lead to reflagging and evasion though, once again, the Seatrade case shows that the EU means eco-business.

*The above article had been published on Marine Money Magazine - Legal Issue 2019.

By means of Legal Notice 280/2019 published on 5 November 2019, the convention between the Government of the Republic of Malta and the Government of the Republic of Kosovo for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to taxes on income entered into force on 20 September 2019. The Double Tax Treaty was signed on 6 March 2019 and was published in the Government Gazette of Malta on 23 July 2019, by means of the Legal Notice 168/2019. Malta has a vast network of double tax treaties both with important trading countries and emerging economies in order to encourage the growth of international trade. Malta’s double tax treaties are modelled on the OECD’s Model Tax Convention on Income and on Capital, and attempt to eliminate or reduce double taxation.

Call it the Greta Thunberg effect or not, politicians are factoring in measures to mitigate our massive carbon footprint into their policies. A case in point is the European Commission, now headed by Ursula Von der Leyen, which has recently published a series of guidelines entitled The European Green New Deal. The underlying strategy is a 5-year plan (the length of her tenure) aimed to boost the fledgling circular economy in the hope that it will eventually create the ripple effect from a national to an international modus operandi far beyond EU borders as more and more countries are realizing the dire urgency of going green.

What do these proposals target?

• Climate neutral by 2015

With the exception of the Czech Republic, Estonia, Hungary and Poland, EU member states have already agreed to work collectively towards this target. Needless to say, the success of this proposal depends on the mutual agreement of all member states. The leverage displayed by the EU Commission will be crucial to unite all fronts.

• Emission trading scheme (ETS)

Rather than a new proposal, this is an extension of the already existing ETS which aims to cap the emissions by power plants where operators can trade emission allowances. As a result, ETS 2.0 will cover the construction and maritime sectors as well as reduce allowance allocated to airlines.

• Carbon border tax

Apart from protecting European industry, this tax prevents carbon leakage by making no distinction among industrial polluters in third countries that are subject to EU fiscal obligations and environmental standards. 

• Emission target reduction

This entails an ambitious revisiting of the current 2030 target set at 40% below 1990 levels by the Paris Agreement signed in 2016 to 55%. It is a herculean task since the EU Commission will even have to contend with the impact of the US having opted out of the Paris accord.

• Just Transition Fund

Adopting green policies will both create and axe obs. The consequent negative impact on businesses and the economy will be cushioned by this fund prop0sal since it offers a reaching out to impacted communities. 

• Circular Economy

Embracing and propelling the circular economy is all about working with sustainable resources and moving away from adding to the massive amount of harmful and toxic waste. This proposal focuses primarily on resource intensive sectors such as the construction industry. It also ups its fight against single-use plastic by targeting microplastics

• Green investment

The formidable investment required to develop green technologies that will in turn translate into economic viability provides the lynchpin of an up and running circular economy which also manifests an environmental mindset gone mainstream. Known as the Sustainable Europe Investment Plan, the proposed public finding aims to take the current EU Investment Plan to the next level by:

1. Allocating 1 trillion Euro to mobilise private investment
2. Transforming parts of the European Central Bank into Europe’s climate bank so as to bolster investment in green initiatives from 25% to 50%.

The European Green New Deal marks a significant step in the sustainability direction. Yet it will truly get going once Von der Leyen takes office.

ESMA’s recently published Guidelines on risk factors under the Prospectus Regulation (the “Guidelines”) focus on risk factor disclosure in a prospectus published when securities are offered to the public or admitted to trading on a regulated market. 

The Guidelines should assist competent authorities when reviewing the specificity, materiality and presentation of risk factors across categories in a prospectus.  ESMA notes that persons responsible for a prospectus (such as issuers, offerors and guarantors), will also benefit from consulting the Guidelines. 

Risk factor disclosure:

• May ensure the protection of persons responsible for the prospectus in providing more transparency and accuracy:

• Assist investors in making informed decisions when assessing the risk element of their investments. 

Competent authorities have up to the beginning of December to notify ESMA whether they comply, intend to comply or intend not to comply with the Guidelines, as well as the reasons in cases of non-compliance. 

The Guidelines shall apply from 4 December 2019 and can be accessed here

We are currently looking for a Client Accountant to join our dynamic accounting team and finance department. This position requires an individual who enjoys working within a team and is capable to work on his/her own initiative, sometimes to quite strict deadlines. Being highly organised and meticulous is essential in such a role. Proficiency in Microsoft Office, with particular emphasis on Excel and SAGE is also a requirement.

The role involves handling every aspect of the accounting functions for both the Firm and its international clients and more specifically involves:

• Assisting in the firm’s accounting processes, right up to a trial balance level
• Posting payments and journal entries
• Maintaining the accounts for a portfolio of client companies
• Assisting with end-of-year tax submissions and VAT returns
• Handling all reconciliations, including bank reconciliations
• Handling any other duties to ensure the smooth running of the Accounts Department
• Any other relevant duties as may be requested by the CFO
 

Responsibilities:

• Bookkeeping & bank reconciliations
• Creditor control
• Chasing Debtors
• Preparation of invoices and credit notes
• Maintenance of accounts ledgers
• Assistance in the preparation of VAT returns
• Other accounting-related duties
• Liaising with clients and auditors
• Filing accounting documents

Requirements:

• Sound knowledge of MS Office and MS Excel
• Possess A level in accountancy or AAT or be in the initial stages of ACCA
• Good verbal and written skills in English and Maltese
• Preference is given to candidates having knowledge of Sage

Send your CV on hr@gmint.com

Company Description:

GM Corporate & Fiduciary Services Ltd.(www.gmcorporateservices.com) is a fast-growing multi-disciplinary corporate service provider that is active in various areas of the financial services industry. Its services range from the incorporation and administration of corporate entities to the licensing and administration of Investment Funds.

Only suitable applications will be acknowledged.     

Job Description:

We are currently looking for an Accounts Officer to join our dynamic accounting team and finance department. This position requires an individual who enjoys working within a team and is capable to work on his/her own initiative, sometimes to quite strict deadlines.  Being highly organised and meticulous is essential in such a role. Proficiency in Microsoft Office, with particular emphasis on Excel and SAGE is also a requirement.

The role involves handling every aspect of the accounting functions for both the Firm and its international clients and more specifically involves:

• Assisting in the firm’s accounting processes, right up to a trial balance level;
• Posting payments and journal entries;
• Maintaining the accounts for a portfolio of client companies;
• Assisting with payroll calculation;
• Assisting with end-of-year tax submissions and VAT returns.
• Handling all reconciliations, including bank reconciliations;
• Handling any other duties to ensure the smooth running of the Accounts Department.
• Any other relevant duties as may by requested by the CFO.

Responsibilities:

• Bookkeeping & bank reconciliations;
• Creditor control;
• Chasing Debtors;
• Preparation of invoices and credit notes;
• Maintenance of accounts ledgers;
• Assistance in the preparation of VAT returns;
• Other accounting-related duties;
• Liaising with clients and auditors;
• Filing accounting documents;

Requirements:

• Knowledge of MS Office and MS Excel
• Qualification in Accounts
• Good verbal and written skills in English and Maltese
• Payroll experience also helpful (FS3, FS5 and FS7 forms)
• Preference given to candidates having knowledge of Shireburn 

Eligibility:

EU citizen or prove eligibility for full-time work in Malta

To apply:

Interested candidates are to apply by sending their CV together with a cover letter to HR Manager: hr@gmint.com, quoting in the subject field “Accounts Officer GMC”.

“There is no business on a dead planet”- David Brower

Poisoning marine life, disrupting human hormones, littering beaches, clogging waste streams and landfills – waste plastics threaten to overwhelm the planet. Earth Day focuses on fundamentally changing human attitudes and behaviours. It is no longer the one day a year where companies step up their green game.  Ultimately, Earth Day should be a celebration of a year of environmentally friendly practices. That makes April 22 a great time to recognize year-long individual efforts to improve corporate sustainability and energy-efficiency. What will you do to celebrate Earth Day 2019?

GM CORPORATE & FIDUCIARY SERVICES LIMITED (GMC) has once again won the Top Communicator Award from Mondaq for FEBRUARY 2019!

The most popular article within February (Call for AML Regulation for Cryptocurrencies) was written by Dr. Daniela Gaffarena.

The Malta Financial Services Authority (‘MFSA’) has announced[1] its partnership with the U.S. cybersecurity company CipherTrace Compliance Monitoring (‘CipherTrace’) in order to monitor and regulate the compliance of cryptocurrencies and virtual asset businesses licensed in Malta.  As a Supervisory Technology (‘SupTech’) tool, CipherTrace will facilitate MFSA’s management of money laundering and financing of terrorism risks associated with businesses operating in the sphere of crypto assets. 

Being founded in 2015 by Silicon Valley entrepreneurs, CipherTrace sought to develop cryptocurrency and blockchain tracing and security capabilities.  Its machine learning algorithms calculate and determine the levels of risk associated with suspicious transactions related to suspicious wallets and addresses.  MFSA Chief Executive Officer Joseph Cuschieri explained that CipherTrace “will provide the MFSA with powerful oversight tools to automate regulatory processes and audit the risk management of virtual asset businesses that are licensed in Malta”. 

The MFSA is currently in the process of vetting applications for virtual financial asset agents (VFAs).  Upon the registration of the VFAs, virtual asset businesses are expected to start submitting applications through their respective VFA to operate cryptocurrency exchanges, amongst other crypto related services. 

In addition to the extensive level of due diligence which VFAs will be legally obliged to perform, CipherTrace services will enable the tracking of crypto assets flowing through virtual asset businesses.  Joseph Cuschieri noted that the partnership with CipherTrace will “reduce fraud and detect transactions with illegal sources of funds”. 

Ultimately, the partnership between MFSA and CipherTrace may serve to instil and foster the indispensable level of trust which crypto transactions often lack, hence protecting banks, financial institutions and consumers alike.

We are proud to be celebrating our 46th anniversary in 2019. Economicard Group of Companies offers a wide and diverse range of services. It was set up in 1973, offering a “cash discount card” service to the general public. The Group then moved on to offering travel and insurance services. Soon after, the Group diversified its services to shipping, finance and legal services.

John A. Gauci-Maistre K.M. is the founder and CEO of the Economicard Group of companies which embraces:

•             Economicard Worldwide Limited

•             GM International Services Limited

•             GM Corporate and Fiduciary Services Ltd

•             Gauci – Maistre Xynou (Legal | Assurance)

•             GM International Conferences and Exhibitions Limited

•             Estrestates Limited

GM CORPORATE & FIDUCIARY SERVICES LIMITED (GMC) has won the Top Communicator Award from Mondaq for the Most Popular Article in Malta for JANUARY 2019.

To read more about the award, please click here.

We are looking for a Personal Assistant to the CEO.

The person holding the position will be the right hand to the CEO and will be responsible for taking meeting minutes, handling emails, setting up appointments, carrying out background research, assisting in general office administration and invoicing duties, producing appropriate reports, briefings and presentations among other responsibilities. 

The company is looking for someone who is;

• Proven work experience in a similar role
• Very organised
• Has excellent communication skills, both writing and speaking
• Up-to-date with latest office gadgets and applications.
• Ability to work in a flexible manner – out of hours as required.

If successful you will receive;

• Very competitive remuneration packages together with other company benefits
• Excellent working environment that promotes growth and progression 
• Ability to work in a multicultural environment

Get in touch and let's discuss further! Send your CV on hr@gmint.com

Submission deadline: 1st March 2019

Soft skills are critical for personal and company success. Qualifications are no longer enough.

Anyone giving the impression that honing soft skills are a millennial trend has either just landed or, desperate to impress. For having colleagues who work well with each other through highs and lows and who have a positive flexible attitude while performing well is what demarcates an effective and harmonious workplace from a dysfunctional one. Soft skills create a pleasant workplace that spurs on the ripple effect of enthusiastic productivity, which if not financially rewarded, will have companies lose their most precious asset. Legal firms are no exception plus as in any other industry they have to contend with comprehending the millennial mindset when recruiting them. This means a tech-savvy generation fully intent on clinching a better work life balance as well as a favorable remuneration. Consequently, flexi-time and working from home are not up for discussion but taken for granted.

Moving away from an authoritarian and static hierarchical structure is another significant millennial facet because today’s young breed of lawyers values feedback, trust and transparency much more than their predecessors. Career prospects, financial compensation and the firm’s culture and reputation are all vital concerns that motivate millennial lawyers. Openly ambitious they do not shy from making an immediate impression or move onto another legal firm that offers them a more rewarding experience.

While the net result is a more humane employer/employee relationship that is changing the traditional set-up of legal firms, there is no compromise on soft skills since these are the qualities that instantly impact both clients and colleagues. Although this pertains to any organization, legal firms need to be more exigent because each case (in/out of court) is highly dependent on them.  The umbrella of desirable features that complement knowledge, competence and experience fall into three essential overlapping elements: people skills, social skills and personal attributes. A thirst for knowledge, the ability to be practical, prioritize and meet strict deadlines, being emphatic where needs be, and the ability to work well on one’s own initiative and within a group, are all soft skills which a young lawyer should aspire to have. 

What interweaves these fundamentals? The answer is an ability to understand, to assess, to communicate, to inspire respect – all with more than a sprinkle of politeness and poise. 

This is precisely what GM Corporate & Fiduciary Services Limited and its affiliate companies are keeping in mind as it welcomes more personnel on board. Apart from being an equal opportunity employer, our multi-national lawyers cuts across diverse age-groups and backgrounds which enable the organization to tap into a wide pool of diverse perceptions. Moreover, GMC takes pride in a dynamic growth mindset by encouraging a synchronization of creativity, flexibility, influence, efficiency, sound decision-making, collegiality and team-building. In addition, GMC periodically provides diversity and intercultural awareness raising training and uses inclusive, diversity-sensitive language in all official documents and publications, including adverts as well as adhering to a zero-tolerance policy as regard discriminatory, offensive or inappropriate behavior.

As rapid change squalls today’s workplace and a tight labor market is turning recruitment into a nightmare, organizations are valuing skills over university degrees, consequently shifting their focus on what prospective employees can bring to the table. The same focus is also pivotal to staff development which is no longer a question of simply furthering studies to obtain better qualifications. While the list of hard skills reflects the surge towards an automated and augmented workplace, the way employees get things done, adapt, collaborate and make decisions makes or breaks both personal and company success.

The in-demand soft skills for lawyers

1. Creativity
   
   Generating ideas and conceiving solutions demands an extraordinary emotional agility while thinking out-of-the-box. Apart from researching known cases, the best lawyers ask the best questions that appraise all possible angles. Reflection and brainstorming are also part of the equation which should be doubly encouraged among international desks. In today’s globalized world this is ever more crucial since lawyers are often dealing with different cultural backgrounds. For as the famed Italian film director, Federico Fellini once affirmed: “A different language is a different vision of life.” Same goes for different age groups and genders.Edward Debono’s concept of lateral thinking (first publicized in 1967) which shies away from classic vertical logic to problem solving combined with his 6 Thinking Hats (1985) also challenges lawyers to take a multifaceted and creative approach to problem solving.
   
2. Persuasion
   
   Winning over people’s minds and hearts is the point at which a seal is put to a deal – meaning that no matter how great the product or concept, it needs a perfect sales pitch. Persuasion is fundamental to legal practice because rapport with clients has to be built on trust that in turn consolidates the firm’s reputation.  The best lawyers make excellent communicators because they are silver tongued. Although some are lucky because it is innate, all lawyers learn the platonic rules of rhetoric because this is the art of effective communication, involving appeals to the audience and persuasive devices.  Persuasion is in fact the art of selling in both the commercial, political and propagandistic spheres. For this reason, it is much maligned. The good news, however, is that more millennials are adopting a more ethical and social conscious approach which is giving an edge to top-tier corporate lawyers. Aristotle’s advice to stick to ethical persuasion ensures a serene spirit.
   
   
    
3. Collaboration
   
    This is all about reaching out to people and dumping diva egos, traditionally notorious in legal set-ups.  Collaboration in legal organizations works on two planes:

   1) Internally where a client’s request or case is immediately assigned to a team, often enabling junior lawyers to learn the ropes from their seniors; and

   2) Externally where advocates must seek the collaboration of other organizations to give the best possible advice and support to their clients.

   The bottom line is to remember that no one knows it all. Nor is anyone indispensable.
    

4. Adaptability
   
   Flexibility is another sought after attribute because it is becoming even more complex in a globalized workplace.  All staff members need to remember that yesterday’s solutions are unlikely to solve today’s let alone tomorrow’s problems. Indeed the onus on today’s lawyers is for them to preempt problems before they happen precisely because the speed of digitization and artificial intelligence far outstrip the enacting of relevant legislation. The resulting grey areas therefore necessitate maximum adaptability. Having said that, simply scoffing at what is dated can turn out to be a costly mistake.  Adaptability also needs to be guarded against exploitation for there will always be shirkers.  For starters, directors and managers must lead by example while ensuring that everyone walks the talk.
   
   
    
5. Time-management
   
   Prioritizing is the No, 1 requisite here closely followed by acquiring the discipline to ward off distractions and avoid burnout. This is absolutely essential in legal firms whose work is based on meeting strict deadlines. Delegating fair workloads is also a must. Significantly, a steady stream of studies is emerging showing that moving away from the traditional 8-hour work day boosts productivity. More and more companies are embracing short 10-15-minute breaks between tasks which refresh both mind and body since they are finally waking up to a well-known truth that spending more than an hour on the same task (especially when sitting down) eventually has level concentrations flag by the early afternoon and struggling to keep up an iota of enthusiasm. Other companies are going even further by introducing a 4-day week (without any pay cuts) in order to improve work/home balance. A sharp rise in productivity all round is the astounding result. Expect more radical change as tomorrow’s intrapreneurs become mainstream.  
    
   
   
6. Courtesy
   
   In a world gripped by the tyranny of relativism and schadenfreude, good manners are often given the thumbs down. Yet it does not take much to realize that politeness is the best lubricant in daily interaction. Taking the trouble to understand and discuss cultural differences further instills mutual respect.  Once again, legal firms are no exception for aggressiveness creates toxic atmospheres.  Being driven to succeed can never condone impoliteness and disrespect.

Where and how to learn soft skills?

One’s upbringing and personal attributes are inevitably life-defining. Nevertheless, both nature and nurture foster soft skills. Today’s easy access to online courses and webinars should be entrenched as periodic in-house training, and not merely utilized as a gap filler in a staff development exercise. Regular reading especially of literature with a capital ‘L’ will also help people go miles. Above all, cultivating a listening ear and looking at the world through the heart is what clinches cognitive and emotional intelligence – the ultimate bedrock of soft skills which no AI can ever totally replace.

Ever since the creation of Bitcoin, cryptocurrencies have been applauded and welcomed for constituting an innovative method of payment without any recourse to financial institutions and their entailing bureaucracy.  While honest individuals rejoiced at cryptocurrencies’ legitimate benefits; ranging from an increased degree of privacy and confidentiality to less transactional costs, cybercriminals saluted the decentralised networks and perceived anonymity behind cryptocurrencies for presenting them with the perfect crypto cleansing opportunity to launder money in an unprecedented and largely unregulated sector in the financial industry.

Regulating cryptocurrencies and bringing them within the scope of anti-money laundering/counter terrorism financing (AML/CFT) regulation is on the agenda of regulatory authorities as wrongdoers are increasingly resorting to utilising cryptocurrencies in their operations[1].  In fact, according to a recent report, in the first three quarters of 2018, the amount of cryptocurrencies stolen when compared to the cryptocurrencies stolen in all of 2017 increased by more than double.[2]  Furthermore, it has been observed that in 2018, 97% of criminal bitcoin payment received by leading cryptocurrency exchanges flowed into countries with weak anti-money laundering regulation[3]; hence the need for regulation becomes even more pertinent.    

Regulating a payment method originally intended to bypass any Big Brother surveillance comes as no easy task, particularly in light of the following key challenges shrouding cryptocurrencies:

• Anonymity/Pseudonymity: the pseudonymous nature of cryptocurrencies place the regulation of cryptocurrencies in direct conflict with due diligence and any Know Your Customer (‘KYC’) obligations since tumblers/mixers serve to provide users with a good degree of anonymity.
• Cross-border nature: blockchain networks are not limited by jurisdictional borders, hence rendering any local regulation almost futile.
• Lack of a central intermediary: decentralised public blockchains lack having a third party responsible for the adherence of AML/CFT regulation.

European institutions and regulatory authorities across the board are considering possible means to effectively regulate cryptocurrencies.  This may necessitate a number of courses of action, which particularly include: improving and strengthening regulation; implementing efficient transaction monitoring capable of identifying money-laundering patterns; and placing third-party ID providers under state supervision[4]. 

In its 2019 report, the European Banking Authority (EBA) advised the European Commission to take the latest recommendations issued by the Financial Action Task Force (FATF) into consideration[5].  Apart from defining virtual assets and virtual asset service providers, the latest 2018 updates to the FATF Recommendations[6], advise countries and financial institutions alike to identify and assess the money laundering or terrorist financing risks posed by new technologies, hence catering not only for virtual assets, but for any other technologies still in their infancy.

On a European level, a considerable milestone has been achieved by virtue of the fifth Anti-Money Laundering Directive ("5AMLD") for adding providers engaged in exchange services between virtual currencies and fiat currencies, and custodian wallet providers to the list of obliged entities.  While being a major step in addressing the need to regulate cryptocurrencies, considerable blind spots are ultimately still blatantly visible as a number of key players within the crypto market still go unregulated.  Hardware and software wallet providers, coin offerors and users resorting to peer-to-peer transactions are just a few examples.  The 5AMLD is to be transposed by 10 January 2020, with the first report of the Commission on the implementation of the said directive to be drawn up by 11 January 2022.  Meanwhile, a rather free-for-all situation persists.

In addition to being at the forefront in recognising the need to regulate cryptocurrencies, Malta has actually gone beyond the requirements of the 5AMLD.  Through the enactment of the Virtual Financial Assets Act (the “VFA Act”) back in November 2018, VFA issuers as well as all VFA service providers are deemed to be subject persons.  Furthermore, the creation of the role of the Virtual Financial Asset Agent (the “VFA Agent”) is particularly significant from an anti-money laundering perspective. This is because it is intended to serve as the first buffer to ensure that only fit and proper VFA issuers and VFA service providers are able to respectively register a whitepaper and to be licensed.

The Prevention of Money-Laundering and Funding of Terrorism Regulations (the “Regulations”) have been amended to expressly bring all three VFA operators (VFA agents, VFA issuers and VFA service providers) within its scope.  The Financial Institutions Analysis Unit (the “FIAU”) has issued a consultation document on the ‘Application of Anti-Money Laundering and Countering the Funding of Terrorism Obligations to the Virtual Financial Assets Sector’ which are intended to act as sector specific guidance to VFA operators in addition to the general Implementing Procedures – Part 1.       

In what has been perceived as being rather encompassing, in addition to catering for ML/FT risks, the VFA framework (comprised essentially of the VFA Act, the Malta Digital Innovation Authority Act, and the Innovative Technology Arrangements and Services Act), the Maltese regulator also provides for cyber risk as well as investor protection and transparency risk. 

In conclusion, national legislation accompanied by comprehensive European AML/CFT framework regulating all crypto key players, while desired, is far from being the be-all and end-all since the borderless nature of cryptocurrencies, makes any national and European regulation rather ineffective and insufficient.  It is high time that international cooperation is resorted to. 

Company Description:

GM Corporate & Fiduciary Services Ltd. (www.gmcorporateservices.com)is a fast-growing multi-disciplinary corporate service provider that is active in various areas of the financial services industry. Its services range from the incorporation and administration of corporate entities to the licensing and administration of Investment Funds.

Job Description:

We are currently looking for a Junior Accounts Associate to join our dynamic accounting team. The chosen candidate will support the finance department with managing daily accounting tasks and report directly to the CFO.

Responsibilities:

Bookkeeping & bank reconciliations;

Creditor control;

Preparation of invoices and credit notes;

Maintenance of accounts ledgers;

Assistance in the preparation of VAT returns;

Other accounting-related duties.

Requirements

• Excellent organizational skills
• Ability to work comfortably with numbers
• Attention to detail
• Good understanding of accounting and financial reporting principles and practices
• Knowledge of MS Office
• Good verbal and written skills in English and Maltese
• Confident communicator
• MCAST AAT Diploma in Accounting or equivalent
• A level accounts and / or one year related experience would be an asset.

To apply:

Interested candidates are to apply by sending their CV together with a cover letter to HR Manager Yeda Spiteri Thomas: hr@gmint.com, quoting in the subject field “Junior Accounts Associate”

A company incorporated under the Companies Act is required by Article 163 to prepare financial statements.  Accounting records are required to be kept at the registered office of the company or at another address that the directors deem appropriate, provided that if the accounting records are kept overseas,  the accounts are sent to a place in Malta at intervals not exceeding six months and to be made available to company officers at all times.

The first financial statements prepared by the company commence on its registration date and can be prepared for a minimum period of six months and a maximum period of eighteen months.  A company can specify a date in the calendar year to be the accounting reference date for year-end purposes by sending the prescribed form to the Registrar within nine months from registration.  Failing to send this notification will set 31 December as the year-end.

Company accounts are prepared under GAPSME or IFRS as adopted by the EU and they include all revenues and expenses in the ordinary course of business.  Every company is required to submit its tax payment within nine months.

Tax payment is calculated on chargeable income.  To calculate the chargeable income the financial statements are used as a basis and they are adjusted for tax purposes.  Although Income is not defined in the Income Tax Act, the sources of income are specified in article 4 of the Income Tax Act and include:

• Gains or profits from any trade, business, profession or vocation;
• Gains or profits from employment or office;
• Dividends premiums and interest;
• Any pension charge, annuity or annual payment;
• Rents, royalties, premiums and any profits arising from property.

Allowed expenses are subject to the initial test in article 14 of the Income tax Act which states:

• All outgoings and expenses incurred during the year preceding the year of assessment
• To the extent to which such outgoings and expenses were wholly and exclusively incurred in the production of the income.

Article 14 includes a list of allowed deductions known as the positive test, and article 26 includes a list of disallowed expenses known as negative test.

After the incorporation date the company may assess processes adopted by competition, entering into agreements with employees and suppliers, and purchasing plant and equipment.  By reference to UK case law: Birmingham and District Cattle By products Ltd vs CIR these expenses are not deemed to be in the production of the income and therefore are not allowed to be deducted.  Article 14(3) allows pre-trading expenses to be deductible provided that:

• The expenses would have been deductible if they were incurred after the company begins to trade; and
• Expenses are incurred not more than eighteen months before the Company commences to trade; and
• They are prescribed expenses by the Minister.  

SL123.62 allows a deduction of the following expenses:

• Staff training;
• Salaries and/or wages; and
• Advertising.

It should be noted that items of a capital nature are allowed wear and tear as a deduction over time, provided that the assets are put into use. SL123.01 prescribes the minimum number of years over which plant and machinery can be depreciated.  For instance: aircraft airframe, aircraft engines, aircraft engine or aircraft overhaul and aircraft interiors and other parts can be depreciated over a minimum period of 4 years.

GM Corporate & Fiduciary Services Ltd can assist to set up the chart of accounts, the preparation of the financial statements, and VAT returns.  In addition, we can assist with drafting of Memorandum and Articles, legal advice and incorporation matters as well as provide a registered address.

For further information and/or clarification email us at: finance@gmint.com

The flu season is in full swing. Germs are having a field day so that cold and flu medication is flying off pharmacies’ counters.

Jokes about the notable difference between a man cold and its female counterpart bring a smile to raw mornings. Yet employees reporting sick is no joke. It’s not just the problems of being short-staffed since HR departments also need to adjust to the consequences of the new procedures following changes to sick leave procedures that essentially cut down on medical certification for very short periods of illness.

Sick Leave Entitlement in Malta varies from industry to industry and may depend on duration of employment. Even though collective agreements may stipulate employer specific rules and regulations, the parameters remain an amalgamation of the Employment and Industrial Act (Cap. 452), the Social Security Act (Cap. 318) as amended by ACT XVI of 2017 together with the Professional Offices Wages Council Wage Regulation Order (S.L.452.39). As a result, full-time employees are entitled to 20 days of sick leave on a full time basis without any threat to job security. In contrast, part-timers are entitled to a pro-rata number of days which are also paid in full plus and carry no risk of job loss.

Up to 2017, all employees were obliged to produce and submit a blue certificate (compiled and signed by a doctor) to the Social Security Department for the entire period of illness. This system enabled the government to cover part of the employees’ wage during sick leave once the sick period extended to the fourth day and beyond as long as social security contributions had been paid. The relevant copy/copies of the blue certificate would be passed on to the employer for internal records.

Budgetary announcements in 2017 have relaxed this system resulting in changes since January 2018. While the rules for more than three days of sick leave still stand, sick leave for three days or less no longer needs to be certified by a medical doctor. A note stating the nature of illness and return-to-work-date suffices though the employee is still bound to notify his/her absence from work.  Nevertheless, an employer may still ask for a doctor’s certificate which renders the legal amendments a contradiction in terms.

While the new system cuts down on red tape at Social Security offices and gains political mileage, it has created a grey area in the workplace specifically where occupational medicine is concerned since this relates to both the treatment and prevention of illness and/or injury sustained at work. The annual flu epidemic demands special attention for the simple reason that the risk of contagion is very high. Schools in Malta must follow strict guidelines as to how to prevent spreading the virus together with how to deal with students who turn up sick in the morning, or come down with flu symptoms during the school day. Targeting schools is necessary because they are notorious breeding grounds for viral transmissions.

Offices too are highly encouraged to follow the same guidelines even where the staff complement is small. During the flu season numbers are irrelevant for it only takes one member of staff to sneeze or cough inappropriately or to make tactile contact with an infected surface for the virus to wreak havoc. Moreover, insufficient hand hygiene particularly if one sneezes/coughs in one’s hands and AC units working at full blast further put the respiratory virus into free fall. Targeting public transport should also be a priority because buses are another fertile ground for viral transmissions.

What is actually happening vis a vis medical certification?

While blue medical certificates are still required for illness lasting more than three days, to date employers in Malta are free to opt for (or out of) hiring the services of a company doctor which translates into a matter of luck whether members of staff are faced with a regulated company policy. Unfortunately, some companies do not maintain a level playing field because the company doctor’s service is not utilised across the board. HR may have its valid reasons to act in this way, but three is no denying that workers feel aggrieved and discriminated against when this happens. More so if their sick leave is genuine.

Meanwhile, a number of doctors are irritated because they feel that they are being used as sergeant majors to cut down on abuse. The irony is that the new system ups such exploitation because no medical certificate is required for up to three days of illness. Admittedly, HR should be responsible for obvious patterns of abuse plus today’s readily available software axes all excuses to record and monitor absenteeism from the workplace. It is therefore no surprise that the Malta College of Family Doctors has been lobbying for a clearer legal framework on the procedures to adopt whenever employees report sick.

While loss of productivity on account of the flu epidemic hogs the January and February headlines, presenteeism (people reporting to work when sick) is only beginning to be spotlighted. Addiction to work, escapism from personal problems, striving to impress, bad time-management and underperformance are the main reasons driving this phenomenon which can lead to poor health and exhaustion apart from productivity loss. Presenteeism during the winter months only adds to the flu epidemic.  Employee Assistance Programmes (EAP) are gaining ground to put a stop to employees reporting sick.

What are the solutions?

Legal

• Incorporate hygiene directives to prevent and deal with the flu epidemic in current legislation.
• Make quarterly unannounced spot checks on work places by competent government health officials obligatory.

HR

• Ensure a safe and healthy work environment.
• Ensure that company policy (abiding by in vigore Maltese laws) is applicable to all staff members.
• Monitor and act upon suspicious sick leave patterns to curtail abuse.
• Ensure hygiene directives re preventing transmission of the flu virus are adhered to.
• Promote common sense and courtesy especially as regards presenteeism.

Be careful what you say online. When you post something on the internet, you are ‘publishing’ and are therefore subject to the same laws as traditional publishers. Making comments on Facebook, Twitter, newspaper portals and other social networks can land you in a legal minefield if you are not extremely careful. With the increasing use of social media, there is also an increasing need to think before you speak, text, post, and even Facebook your friend.

Maltese lawyers are seeing an increasing number of cases dealing with social media.Most of us accept that ‘traditional media’ should be subject to the law to some degree, in order to protect peoples’ reputations and from spreading hatred since their significant audience and ‘authoritative’ voice make an impact.  The same should apply to social media although we might not have expected such rules to ever apply to ourselves.

Now the majority of people are not aware of, or do not understand, the laws surrounding what they can and cannot say online, and do not realise that posting on the internet is not the same as talking to your mates in a pub. People do not realise how risky it is to make throwaway comments on social media sites. It is easy to get carried away when you are sitting in the comfort of your own home or behind your mobile screen. But there are serious repercussions when baseless allegations are made.

A survey conducted by one of the big global law firms at the end of last year found that a frightening number of respondents, who were mainly between 21 to 28 years old, had no idea of the legal consequences of going online.

There is a fine line between when an opinion becomes a statement that breaks the law. This has been demonstrated in the debacle case of McAlpine vs Bercow and by the ever-growing number of shocked citizens who have been prosecuted for certain posts on Facebook and Twitter. What most people do not realise is that when comments turn libellous, they will also have a civil or even criminal suit on their hands.

Online abuse and negativity is something we haven’t really had to deal with before but it is becoming more and more of an issue and one where the law is becoming stricter.

High-profile cases that we have all read about do not help much either when it comes to working out what is and what is not acceptable in terms of the law. What is morally acceptable or decent is then another matter entirely. However, we cannot just punish people for holding opinions that we find offensive, no matter how distasteful.

But what do these recent cases – and the increasing likelihood of prosecution – mean for freedom of speech? And at what point does a statement become law-breaking?

That is not to excuse, agree with or justify those who post abusive, distasteful, hatred-inciting or discriminatory statements online. But it does raise an interesting debate when it comes to freedom of speech.

Generally, the advice when posting online is to use caution and restraint.

Yet does the fear of prosecution now mean we will be losing our identity and personalities? Social media is supposed to be a place for us to express ourselves and those that signed up to any social platform probably did not expect to have to worry about any legal ramifications of what they are saying before every post.

Worrying about what to post also goes beyond the legal issues. Take the case of devout Christian Adrian Smith, who was demoted at work with a 40% pay cut as he posted his opinion about gay marriage on his private Facebook page. Surely, not everyone agrees with his opinion, but should he have been punished for it? The courts thought not, and ruled that his employer was wrong to have punished him for the post.

The Adrian Smith case is one of thousands that should set you thinking over and above not giving vent when posting on social media.

 What is your opinion? We would like to hear from you:

• What do you think about the effects on freedom of speech?
• When does a statement go beyond being distasteful to being illegal?
• Should someone be prosecuted for an opinion, just because others find it offensive? 

The registration of ships under the Maltese flag is regulated by the Merchant Shipping Act. Furthermore Malta has adopted all the major international maritime conventions. Besides the simple yet highly effective legislative framework, Malta also boasts of low operating costs, stable political factors and technical expertise in the industry. All these factors have contributed to Malta having the largest maritime registry in the European Union and to have established itself as an exceptionally respected flag State.

Registration of ships and all matters ancillary thereto is the responsibility of the Merchant Shipping Directorate (hereinafter the ‘MSD’). Registration of vessels is a serious matter for any nation, given that once a vessel is registered under a particular flag, the flag State enters into an international obligation to ensure compliance of its vessels with all international rules and standards. The flag State is under a legal duty to:

• Ensure that the ships that bear its flag carry all trading certificates.
• Inspect its vessels for compliance and conformity, and the overriding consideration remains safety of life at sea.

Maltese law offers shipbuilders or owners of vessels the possibility of registering various forms of vessels, from super yachts to barges, or even oil rigs. As a rule, trading ships of 25 years and over are not registered. Ships of 20 years and over but less than 25 years are required to pass an inspection by an authorised flag state inspector prior to being provisionally registered. On the other hand, ships of 15 years and over but less than 20 years are required to pass an inspection by an authorised flag state inspector before or within one month of provisional registration.

For a ship to be registered under the Act it must be owned by:

1. a citizen of Malta [Art. 4(1)(a) of the Merchant Shipping Act;
2. bodies corporate established under and subject to the laws of Malta, having their principal place of business in Malta or having a place of business in Malta and satisfying the Minister that they can and will ensure due observance of the laws of Malta relating to merchant shipping [Art. 4(1)(b) of the Merchant Shipping Act];
3. a citizens of EU Member States residing in Malta;
4. a foreign corporate body or other entity which enjoys to the satisfaction of the Registrar-General legal personality in terms of the law under which it has been established or constituted and which has satisfied the Registrar-General that it can and will ensure due observance of the laws of Malta relating to merchant shipping [Regulation 2(a) of the Ships Eligible for Registration Regulations S.L. 234.23];
5. a citizen of EU Member State not residing in Malta [Regulation 2(b) of the Ships Eligible for Registration Regulations S.L. 234.23]

In the last two instances, such a person is referred to as an international owner. An international owner must appoint a resident agent, who is habitually resident in Malta, in order to act as a channel of communication between the international owner and the MSD in respect of all matters relating to the upkeep of the vessel’s register, and to act as the owner’s judicial representative in Malta. Such an international owner shall then be deemed to have submitted to the jurisdiction of the Maltese courts for any action in connection with the ship while it is or was registered under the Maltese flag.

The procedure for the registration of a vessel is relatively straightforward. The application for the registration of a vessel must be made by the ship owner or an authorised representative, and must be accompanied by proof that such person, being a physical or a moral person, qualifies to own a Maltese vessel. A vessel is first registered provisionally under the Malta flag for six months (which may be extended for another period not exceeding six months) during which all documentation needs to be finalised. Once the owner submits all prescribed documentation and certification within the time limits set at law, a permanent Certificate of Registry is issued. Such Certificate evidences both the ownership and nationality of the ship. It is worth pointing out that when registering a vessel there is also the opportunity to re-name it and have it registered under a different name. A registration fee in respect of all vessels is payable on initial registration and annually thereafter. These costs depend on the total gross tonnage of the vessel, the type and the age of the vessel.

Maltese law also allows the provisional registration of vessels that are still being constructed or equipped. The registration of ships still under construction offers a number of advantages to ship-owners and operators, including, the suspension of various legal requirements ordinarily relating to registration (until the construction is complete or delivery of the vessels is made). However, the possibility of registering vessels under construction is still rarely utilised.

Another category of vessels which may be registered with the Maltese registry is that relating to commercial yachts. These are yachts which are used for commercial purposes but which do not carry cargo and do not carry more than twelve passengers. Commercial yachts are regulated under the Commercial Yacht Code, drawn up by the MSD in 2010. The Code takes into consideration the particular design, operation and safety requirements of such yachts, whilst having regard for the international regulatory framework at the same time. Apart from commercial yachts, Maltese law also permits the registration of pleasure yachts. In fact, pleasure yachts registered in Malta benefit from an attractive taxation mechanism.

Some of the advantages and features of the Maltese shipping register include:

• Vessels may be registered in the name of legally incorporated bodies irrespective of the latter’s nationality. This is unlike a number of other flag states which have traditionally placed restrictions on the ownership of vessels to persons who are national, domiciled or legally incorporated in the flag state.
• There are no conditions imposed in respect of the nature of trading carried out by the vessel carrying the Maltese flag, or on the nationality of the master, officers and crew serving on such vessels.
• Owners or charterers of Maltese ships can benefit from certain tax exemptions, and no tax is payable on dividends paid to the shareholders.
• Registering a vessel under the Maltese flag is easy and efficient procedure.

If you have any queries or would like to assist you with any matters related to GM Corporate and Fiduciary Services Limited services, please contact us at finance@gmint.com.

Income tax

LN 37 of 2018 – introduced a notional interest deduction (NID) allowed to be utilized by undertakings on profits allocated to the Foreign Income account (FIA) and the Maltese taxed account (MTA) equivalent to a % calculated by reference to the yield to maturity on Malta Government stocks with a remaining term of approximately 20 years plus a premium of 5%. Undertakings benefitting from these reductions are deemed to have distributed interest to the shareholder or partner.  When the shareholder or partner prepares his personal tax return, and the shareholder or partner of the undertaking is not resident in Malta, the deemed interest is exempt from tax in Malta under section 12 of the Income Tax Act if the specified criteria is met.

Also under article 56 of the Income Tax Act,  from year of assessment 2019 (basis year 2018) individuals not chargeable under any scheme who are ordinarily resident in Malta but not domiciled in Malta, and who derive income amounting to not less than EUR 35,000 which is not received in Malta, shall be subject to a minimum tax of EUR5,000 per annum unless the individual can prove to the satisfaction of the Commissioner that without applying these sections, the total tax payable by him would have amounted to less than the minimum tax.

Startups and grants

LN 99 of 2018 relates to Applications for Startup Advance scheme, creates a scheme for eligible business activities to avail themselves from a grant, provided that these economic activities submit their application to Malta Enterprise by 30 October 2020.

LN121 of 2018 introduce a number of tax credits allowed for Micro enterprises and self-employed.

Maritime industry

After the EC decision which included a detailed list of 25 commitments, LN 128 of 2018 updated the Merchant Shipping Act of Malta regulating shipping activities which include the international carriage of goods or passengers by sea, the business of operating tonnage tax ships, and ancillary activities.  In this legal notice, the income of these companies is exempt from Income tax under regulation 5, provided that all tonnage tax was duly paid and no further tax shall be charged or payable on any income, profits or gains of any shipping organization derived from the sale or other transfer of a tonnage tax ship.  These shipping companies are required to submit a declaration in lieu of the tax return by a certified public accountant and auditor.

LN140 of 2018 set up the maximum income subject to tax for qualifying employment in maritime activities and the servicing of oil and gas industry activities.

VAT

LN 163 of 2018 updated the entry and exit threshold for a person to qualify as a small undertaking for VAT purposes.  Article 11 registered persons as a small undertaking are not required to charge VAT on goods and services provided by them and they do not claim input VAT.

LN 162 of 2018 introduced VAT grouping provisions applicable to companies in the financial services and in the gaming industry listed in the schedule attached in this legal notice, where two or more persons can register as a single taxable person.

Ultimate beneficial owner

LN 184 of 2018 introduced a form required to be submitted to the Registry of Companies to register the beneficial owners of a company.

Gaming

Seven gaming legal notes were introduced during 2018 (LN242-LN248).  In particular LN248 of 2018 announced the Gaming Tax Regulations Act which introduces a gaming tax and a levy on gaming devices.

Payroll matters

LN 148 of 2018 introduced a penalty of EUR 15 if a payer fails to submit the monthly FS5 as required and within the specified time to the Commissioner for Revenue, and a penalty of EUR 200 if a payer fails to submit the FS3 and FS7s on time.

LN 440 of 2018: The employer may only use up totwelve days for shut downs.  Also, if an employee overuse his leave entitlement for a particular year, it shall give rise to a civil debt in the case of a termination of employment unless the leave was taken as forced leave.

LN439 of 2018: gives the right to an employee to request his sick leave balance up to a maximum of four times a year, the sick leave entitlement and the sick leave availed of during the year and the employer is required to provide the employee with this information within five days from the date of the request.

 LN 443 of 2018: As advised during the last budget, employees are given a cost of living increase of EUR 2.33 per week which shall be increased by a mandatory increase of EUR 1per week for employees working 40 hours, or pro-rata for other employees.

The government has now updated the website with the new social security rates to be used for 2019:

https://cfr.gov.mt/en/inlandrevenue/personaltax/Pages/SSC1-2019.aspx

The sick benefits for 2019 have changed to EUR 20.79 for single parent or married person maintaining a spouse and EUR 13.46 for any other person.

Our services

If you have any queries or would like GM International Services limited (a leading company in the maritime industry) to assist you with any shipping matters kindly email: maritimeservices@gmint.com, or if you require any assistance on finance matters kindly contact GM Corporate & Fiduciary Services Limited using the following email: finance@gmint.com.  For assistance on incorporations and startups, kindly contact Gauci-Maistre Xynou,our renowned Maltese law firm on: info@gmxlaw.com

We take this opportunity to wish you all the best for the New Year we have just started.