The recent growth of the media and entertainment industry has made Malta one of the top locations for filming, as well as a competitor within the dynamic market of this sector. Recent changes to the law and advantageous financial services have been introduced in order to properly regulate and promote production through all forms of digital and audio-visual media in Malta. Chetcuti Cauchi’s Media & Entertainment Unit are well equipped to provide advise and professional consultancy pertaining to the industry, including areas related to film, television, music and broadcasting/digital media.
Malta and the Film Industry
Malta has entered into various treaties and conventions to promote Malta’s use within the filming industry and to attract foreign producers to utilise Malta’s culture to their benefit. The bi-lateral co-production treaties Malta has in place at the moment allows for there to be an agreement between Malta and the relevant country to promote national production in each of the partner nations. This will subsequently allow the producers to have access to the relevant benefits available to local film and television industry in each country. These treaties support the increase of High Quality productions through the sharing of equity investments. At the time being, Malta has in place bi-lateral co-production treaties with Canada as well as 28 European Countries. Malta has also ratified the European Convention on Cinematographic Co-Production, which is specifically directed at promoting the development of European multilateral cinematographic co-production, safeguarding creation and freedom of expression as well as protecting the cultural diversity of ratifying countries. The Convention also regulates areas related to the contributions of each co-producer, their rights, investments, compulsory artistic and technical participation, and the measures used to facilitate production.
Malta has also ratified Article 17 of the OECD Model Convention, which holds that: “income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State”. Therefore, professional entertainers who are not residents in Malta may benefit from the tax opportunities in Malta, if it is the case that the income of the entertainer is received in Malta or routed through Malta in the form of royalties.
As another means of integrating the film industry as an important part of Malta’s economy, a new film policy has been introduced, which includes financial incentives that allow Malta to provide the lowest corporate tax rates in the European Union. Cash rebates have recently been introduced to ensure that productions satisfy a cultural test, where they are able to benefit from a rebate of up to 25% of eligible expenditure. If Malta is featured culturally in the production, an additional rebate of 2% can be given. This is aimed specifically at films, television series, creative documentaries, Transmedia and Crossmedia productions which are fully or partially produced in Malta. Recent laws have also provided the opportunity for companies or individuals investing in audio-visual infrastructure in Malta to qualify for tax credits of up to 50% of their investment on the islands. If, on the other hand, a private investment fund is used to finance an audio-visual production, the financers could be exempt from paying tax on dividends and capital gains obtained through their investment from Malta. Additionally, no withholding tax is charged on the dividends, interests and royalties paid by non-residents, allowing them to repatriate their profits out of Malta.
With regards to Value Added Tax, the rate for all goods and services supplied in Malta is 18% and the rate for accommodation in hotels and licensed premises and the supply of alternative energy equipment stands is 7%. However, a measure has been introduced allowing certain supplies to be exempted from VAT, or for a VAT refund to be given upon use of particular types of services. Foreign film productions shooting in Malta are further eligible to claim funds in the case of:
- input VAT on property rental or hotel accommodation for persons directly engaged in the production;
- input VAT incurred on fuel by vehicles used in the production;
- input VAT on the cost of taxis and car hire for the production (excluding VAT imposed on the purchase of non-commercial motor vehicles), and
- input VAT on the cost of materials for film production which are not recoverable.
The Maltese Co-production Fund has also been introduced as a means of encouraging collaboration between Maltese and foreign companies in order to produce films or television series for international distribution. It is essential that a co-production status is jointly approved with the competent authority of each signatory country (according to the European Convention). The financial contribution will then be determined according to the available budgetary resources, and the cost and nature of the proposed plan. The Malta Co-Production Fund grants loan facilities to provide support for expenditure costs for the production in Malta. Another scheme employed by the Fund is the Equity Finance, which allows producers to contribute to their co-financing share used for the production and allowing them to provide support when covering expenditure for the production in Malta. The co-production agreement sets a minimum and maximum financial contribution in order to determine the majority country for that film.
Our Malta Film Industry Team
Chetcuti Cauchi’s Media and Entertainment team is equipped to advise clients on areas related to:
- the financing of film and television (including equity finance and bank lending)
- contracts, including negotiation, start-up, underlying material rights, exploitation of rights
- employment agreements and work permits
- tax, financial and other incentives
- location procurement and arrangements, including permits, licensing and authorisations issues
- corporate law and the setting up and restructuring of film and television production companies, including administration and back office services
- international co-production issues, including negotiation, drafting and finalisation of any arrangements, qualification issues and liaison with local authorities
- property purchases, leasing or temporary accommodation issues
- tax advice and fiscal incentives
- insurances procurement
- intellectual property protection
- dispute resolution, including court litigation, mediation or arbitration.
Printed Media Laws in Malta:
The rise of digital media as a means of publishing news articles or broadcasting media has become immensely popular in the past decade. Hence, the Media and Defamation Bill is being proposed to parliament with the intention of repealing the current Press Act. The Bill updates the definitions pertaining to authors, broadcasts, defamation, editors, printed words, publications and websites. A controversial issue that has been introduced through Article 19 of this Bill is the need for a person to register as an editor or publisher of a newspaper, broadcasting service or website with the Media Registrar. If this is not carried out the person is liable to the payment of a fine.
Our Malta Media & Entertainment Law Practice
Chetcuti Cauchi offers consultancy services related the latest technological developments within broadcasting and media industry and has duly equipped itself to provide assistance to clients in the industry who wish to establish their operation in Malta, or have already set up their establishment in Malta, but would like to consolidate or internationalise. Recognising the recent changes made to the law, our services include:
- drafting of all regulatory documentation for the purposes of obtaining relevant permissions
- negotiating with and representing before the broadcasting and communications authorities
- assisting with the attainment of frequency allocations
- assisting with the sourcing of local infrastructure
- negotiating with local service providers
- providing advisory service that facilitates compliance with licence conditions, and
- copyright, trademark, data protection, privacy, piracy and counterfeiting matters.
Our Intellectual Property Unit also plays an important role in the Media and Entertainment field, where advice is given on matters related to:
- the registration of trademarks, patents and designs within the jurisdiction of Malta
- the protection of trademarks within the European Union
- trademark design and patent searches in local databases and registers
- the negotiation, drafting, development, distribution, technology transfer, licensing and joint venture agreements for domestic and foreign entities
- copyright protection
- preparing and prosecuting domestic and foreign patent application in all technologies.
Our Digital Media Team:
The evolving nature of the digital media industry has brought about various changes to all forms of electronic media. However, our Digital Media & Entertainment Law Practice continuously re-assesses the legal implications and commercial realities within this field. In fact it provides advisory services to issues relating to:
- sound recordings, music downloads and streaming
- podcasting
- mobile phone applications
- content delivery
- digital rights management systems
- domain name issues and conflicts
- related litigation and out-of-court services
- e-money systems and institutions, and
- e-commerce and website development issues
- digital distribution of film, images and television programmes,
- copyright issues
