SEARCH ANYTHING

SEARCHING

Malta Budget 2025: Highlights

Tax
30.10.24

Highlights

 

  • Malta is currently in discussions with the European Commission to introduce Qualifying Refundable Tax Credits (QRTCs).
  • A visa for esports athletes will be introduced to facilitate their relocation to Malta.
  • A new law on limited partnerships is expected to be enacted.
  • The reduced stamp duty rate of 1.5% on the inter-vivos transfer of family businesses will be extended.
  • Extension of the Highly Qualified Person Rules (HQPR).
  • Widening of the income tax brackets for Maltese tax resident individuals.
  • Increased tax deductions for parents whose children attend private schools.
  • Employers will be required to offer an occupational pension plan for their employees.
  • Government will subsidise energy, fuel, and grain prices
  • Extension of schemes related to property, environment, and healthcare.

 

economic Overview

4.3%: Malta’s economy is predicted to grow by 4.3% in real terms

4.1%: Job creation is predicted to reach 4.1%

2.1%: Inflation is predicted to slow down to 2.1%

3.5%: Deficit is predicted to decrease to 3.5%

50.1%:Debt is predicted to be 50.1%

€8.24/week: The minimum wage will increase by €8.24 per week

€5.24/week: The cost-of-living adjustment (COLA) for 2025 will be €5.24 per week (pro-rata for students)

 

fiscal measures

The income tax brackets for Maltese resident individuals will be revised as from 1st January 2025. The maximum annual tax saving across the different tax rates ranges from €345 to €675.

 

SINGLE TAX RATES

INCOME €

RATE

0 – 12,000

0%

12,001 – 16,000

15%

16,001 – 60,000

25%

60,001 and over

35%

 

MARRIED TAX RATES

INCOME €

RATE

0 – 15,000

0%

15,001 – 23,000

15%

23,001 – 60,000

25%

60,001 and over

35%

 

PARENT TAX RATES

INCOME €

RATE

0 – 13,000

0%

13,001 – 17,500

15%

17,501 – 60,000

25%

60,001 and over

35%

 

Tax deductions for parents whose children attend private schools will be increased:

  • Kindergarten – €3,500
  • Primary – €4,600
  • Secondary – €6,500

 

Highly Qualified Person Rules

  • Extension of the Highly Qualified Persons Rules (HQPR).

 

Family Businesses

  • Extension of the reduced stamp duty rate of 1.5% on the inter-vivos transfer of family businesses.

 

Social measures

pensions

  • Pensions for the elderly will increase by €8/week.
  • 80% of pension income will be exempt from income tax.
  • Pension bonus rates for individuals who do not have sufficient social security contributions will be revised, resulting in an increase varying between €550 and €1,000.
  • Individuals born on or after 1976 will be required to pay or be credited with 42 years of contributions (instead of 41 years) to qualify for a full pension.
  • Private employers will be obligated to provide an occupational pension plan for their employees. Similarly, the government will offer a pension plan to its employees, matching each employee’s contributions up to a maximum of €100 per month.
  • Widow/ers’ pensions will increase by €3/week.
  • Service pensions will increase by €200.

family

Marriage grant

  • The marriage grant will increase from €330 to €500 per spouse.

Children’s allowance

  • Children allowance will increase by €250/child.

Benefits upon birth/adoption

  • The benefit of €500 for the first child and €1,000 for the second child will be extended, whilst the bonus for the third child or more will increase from €1,000 to €1,500.

Fostering allowance

  • Fostering allowance will be increased by €10/week for every fostered person under the age of 21.

Post-secondary education allowance

  • Parents whose children continue their education post-secondary will receive an allowance of €500 per child per year for the next 3 years.

Gym membership

  • Youths born in 2005 and 2007 will be given a free 6-month gym membership.

Supplementary allowance

  • The supplementary allowance for couples will be increased by €190 per year. The maximum joint income that needs to be earned to benefit from such allowance has increased to €18,000 per year. The supplementary allowance for single persons will increase by €69 per year.

Disability allowances

  • Several increases have been announced for persons with disabilities, their carers and families.

Drug rehabilitation programme

  • Two years of paid social security contributions will be credited to persons who successfully complete a drug rehabilitation programme and re-enter the workforce.

Self-employed individuals undergoing IVF treatment

  • Self employed women undergoing IVF treatment will benefit from a maximum of 60 hours paid leave at the minimum wage rate, whilst their partner will benefit from 40 hours at the same rate.

Paternity leave for self-employment individuals

  • Self-employed fathers or equivalent second parents, will benefit from 10 days paternity leave paid at the minimum wage rate.

 

Technology investments

Intelligent Traffic Management System

  • Such investment will contribute in optimising the flow of traffic.

Electric vehicle grant

  • Reduction from €11,000 to €8,000.

Integrated IT system

  • This system will provide taxpayers with the ability to issue their tax statement in real-time.

Other measures

  • New legislation is expected to be enacted in 2025 in relation to Limited Partnerships.
  • The government will continue to enact legislation to enhance Malta’s attractiveness in the financial services industry, aircraft rentals, family offices, fintech, and wealth management.
  • A visa for eSport athletes will be introduced to facilitate their relocation to Malta.
  • Malta is currently in discussions with the European Commission to introduce Qualifying Refundable Tax Credits (QRTCs).
  • Legislation relating to “Equal Pay for Work of Equal Value” will be introduced in 2025.
  • A public consultation on the Economic Migration Policy will be launched by the end of 2024.
  • Malta’s Vision 2050 will be launched in Q4 2025, setting the country’s strategic direction.

 

extensions of existing measures

immovable property

 

  • First-time buyers grant of €10,000 spread over 10 years.
  • Reduced stamp duty rate for first- and second-time buyers, including the Grant on First Residence (GFR).
  • VAT refunds of up to €54,000 and grants amounting to €15,000 for properties located in Malta and €40,000 for those located in Gozo will be available for the restoration of:
    • Properties located in Urban Conservation Areas (UCAs);
    • Properties over 20 years old that have been vacant for at least seven continuous years prior to the transfer date; or
    • New properties developed in accordance with approved criteria.

green sustainability

  • Schemes to encourage investment in renewable energy systems.
  • Wind and solar energy solutions are being considered.
  • Extension of pedelecs & ekickscooters scheme for personal use.
  • Electric Vehicles/ plug-in hybrid will continue to be exempt from registration tax and from the annual road license fees for 5-year period from date of registration.
  • Strategy to encourage cycling as an alternative means of transport.
  • Extension of VAT refund on purchase of bikes and electric bicycles, power-assisted bikes, and the conversion of vehicles to run on LPG.
  • Extension of the scrappage scheme.

 

other extended measures

  • Extension of the Get-qualified scheme.
  • Extension of the Seed investment scheme.
  • Tax refunds for persons earning less than €60,000.
  • Individuals working atypical hours will continue to receive a grant of €150.

OUTLINE