Malta: Deduction in respect of intellectual property and intellectual property rights
A deduction with respect to expenditure of a capital nature on intellectual property or intellectual property rights
Deduction in respect of intellectual property and intellectual property rights
The Commissioner for Tax and Customs issued a notification providing for an immediate deduction with respect to expenditure of a capital nature on intellectual property or intellectual property rights against royalty income derived therefrom.
The Income Tax Act already provides for a deduction of expenditure of a capital nature on any intellectual property or intellectual property rights over a minimum number of three years. Following the notification by the Commissioner for Tax and Customs, such deduction may, at the option of the taxpayer, be accelerated by claiming the said deduction in full in the year in which the expense has been incurred or in which the intellectual property or intellectual property rights are first used or employed in producing the income.
When a taxpayer started claiming a deduction over a minimum of three years in the past and still has unclaimed deductions as at year of assessment 2023, these may be claimed in full in year of assessment 2024.
Read a January 2024 report prepared by the KPMG member firm in Malta
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