Malta

Individual - Deductions

Last reviewed - 28 February 2020

Employment expenses

To be deductible, expenses of an employee must be incurred wholly and exclusively in the production of the income and must be necessarily incurred. Where the employer reimburses employees for expenses incurred on the employer's behalf, no tax liability should arise in the hands of the recipients unless a gain or profit accrues to them from the arrangement.

Personal deductions

Alimony payments paid by a taxpayer to an estranged spouse are allowed as a deduction, while the receipt of the alimony is taxable in the hands of the recipient. The receipt of a payment for the maintenance of children is not taxable in the hands of the estranged spouse and not deductible in the hands of the person making the payment. 

Certain deductions are allowable, which include:

  • fees paid to a named school in respect of a child with special needs for the services of a facilitator (capped at a maximum amount);
  • fees paid for childcare services for children below the age of 12 to a bona fidechildcare centre (capped at a maximum amount);
  • fees paid for residence in a private home for the elderly (capped at a maximum amount);
  • fees paid to named private school fees for children either in kindergarten, primary school or secondary education;
  • fees paid in respect of children under the age of 16 years for certain sports activities (capped at a maximum amount), fees paid for the use of school transport (capped at a maximum amount); and
  • fees for residency services in respite homes or centres or for community support services (capped at a maximum amount).

Personal allowances

No personal allowances by way of deductions or credits are granted.

Business deductions

Certain allowances are available for business-related expenses in the case of persons exercising a trade, business, profession, or vocation. These include, inter alia, scientific research, bad debts, and losses carried forward.