Pension exemption
To encourage pensioners to continue working beyond retirement age, pension income has been, over a 5 year period since 2022, gradually excluded from taxable income. For calendar year 2024, the amount of pension income to be excluded from taxable income will amount to 60%.
Widow’s/widower's pension
As from 1st January 2024, an exemption will apply to widow’s and widower’s pension derived by persons under the age of 61.
Increase in the tax credit for children with disabilities undergoing therapy
As from 2024, the Government will increase to €500 (up from €200) per year, the tax credit to parents of children with disabilities who attend therapy (other than that offered by the Government).
Reduction in taxes due on transfers of certain rented properties
No income tax on capital gains and stamp duty will be charged on the first €200,000 of the value of the property in cases where the property is transferred to tenants who previously leased the same property for a number of years or paid subsidised rent, under a scheme administered by the Housing Authority.
Continuation of schemes in relation to immovable property
The first time buyers and second time buyers scheme will be extended for another year. Furthermore, as from 2022, first time buyers who purchased a property will continue to benefit from a yearly grant of €1,000, for a period of 10 years.
No income tax and stamp duty will continue to apply on the first €750,000 of the value of the property transferred when such property:
has been constructed more than 20 years ago and has been vacant for more than 7 years; or
is situated in an UCA.
Donations to certain voluntary organisations
Businesses donating amounts to voluntary organisations registered with the Commissioner for Voluntary Organisations with respect to social and environmental causes and animal welfare will be entitled to a deduction of the donated amount of up to €500.
Tax refund to individuals
The tax refund paid in the past years will be extended and will be paid again to individuals earning less than €60,000.
The refund will vary between €60 and €140 (as set out in the table below) depending on the level of income and the tax status of the individual, with the lowest income earners eligible for the highest tax refund.
Single Computation |
Amount |
Income |
|
€0 - €15,000 |
€125 |
€15,001 - €30,000 |
€95 |
€30,001 - €59,999 |
€60 |
Married Computation |
Amount |
Income |
|
€0 - €15,000 |
€140 |
€15,001 - €30,000 |
€110 |
€30,001 - €59,999 |
€65 |
Parent Computation |
Amount |
Income |
|
€0 - €15,000 |
€135 |
€15,001 - €30,000 |
€105 |
€30,001 - €59,999 |
€60 |
Fiscal incentives for highly qualified persons
The current fiscal incentives applicable to certain highly qualified persons will be revised and harmonised to cater for the skills required by the Maltese economy.
Extension of the Get Qualified and Higher Education schemes
Tax credits will continue to be provided to students studying for a Masters Degree or Doctorate and benefiting from the Get Qualified and Higher Education Qualification schemes.
Startups
The Seed Investment Scheme will be extended. This scheme offers incentives (in the form of tax credits) to Maltese companies which have invested in startups and which satisfy the relevant due diligence procedures.
Pillar 2 / International Tax
The Minister confirmed that Malta will apply the derogation provided for in the EU Minimum Tax Directive and therefore will delay the introduction of the 15% minimum tax rate for companies forming part of a group with an annual turnover of at least €750 million.
This means that the application of the Income Inclusion Rule (‘IIR’) and the Undertaxed Profits Rule (‘UTPR’) will be deferred by up to six years. Furthermore, at this stage, a Qualified Domestic Minimum Top-up Tax (‘QDMTT’) is not expected to be introduced.
This position will be assessed in future years in the context of global international tax developments.
Currently no changes will be made to the full imputation system and new forms of grants and tax credits, also referred to as Qualified Refundable Tax Credits (‘QRTCs’), are expected to be introduced.
Extension of the reduced rate of tax on income derived from sports activities
The 7.5% rate of tax on income derived by players, licensed coaches and athletes will be extended to other persons engaged in sports activities.
Scheme for first time buyers renovating or building homes
The assistance, by way of a VAT refund, to first time buyers to build or renovate their homes is being extended and will be made equally beneficial to single persons as it is for couples.
Incentives on property restoration
Incentives will continue for persons buying or selling property which is more than 20 years old and has been vacant for more than 7 years or where the property is located in a UCA. These persons will benefit from an exemption from capital gains tax and stamp duty on the first €750,000. They will also benefit from a VAT refund of a maximum of €54,000 on restoration and renovation expenses. First time buyers will receive a grant of €15,000 if the property is in Malta and €40,000 if the property is in Gozo.
As from 2024, the reduced rate of stamp duty on the acquisition of immovable property in Gozo will no longer apply.
Family business
The reduced stamp duty rate of 1.5% applicable to certain transfers of family businesses to descendants has once again been extended.
Family businesses registered with the Family Business Office stand to benefit from an increased capping of tax credits for investments made into the business.
New measures to allow for more flexible family business restructuring, in terms of the Family Business Act. These measures will include rules aimed at strengthening the legal framework regulating family charters.
Fiscal incentives for family businesses which internationalise, innovate and digitalize.
The regulatory changes being considered in the Wealth and Asset Management sector also seek to incentivise Family Offices to relocate their operations to Malta.