Social security contributions
For calendar year 2021, social security contributions for employed persons are paid by both the employer and the employee are each required to pay social security contributions at the rate of 10% of the individual employee’s salary and at fixed rates of EUR 48.57 per week for annual salaries exceeding EUR 25,258, provided the employee has been born on or after 1 January 1962.
For calendar year 2021, for self-occupied/ self-employed individuals, social security contributions amount to 15% of the annual net income earned during the previous year. The maximum contribution for persons born on or after 1 January 1962 amounts to €72.86.
Persons born before 1962 who do not qualify for a contributory pension, will be entitled to add to their total number of contributions paid prior to the attainment of 19 years of age.
A measure was introduced to determine the pensionable income for persons born from 1st January 1956 to 31st December 1961 for basis year 2020. In this case, the pre-COVID wage or earnings shall be applicable. This measure is applicable to persons who are employed in the private sector, or who are self-occupied persons, whose sector of was adversely hit by the COVID-19 pandemic.
All the rates are generally revised upwards at the start of every calendar year.
Value-added tax (VAT)
Supplies of goods and services in Malta are subject to VAT at the standard rate of 18%, although certain reduced rates apply in respect of specific goods/services.
Taxable persons whose economic activity consists principally in supplies of services and whose annual turnover is not higher than EUR 30,000 are not required to charge VAT on their supplies, but they would still have a registration requirement (unless the services provided are exempt without credit supplies).
See the Other taxes section in the Corporate tax summary for more information.
Net wealth/worth taxes
There are no net wealth/worth taxes in Malta.
Inheritance, estate, and gift taxes
There are no inheritance, estate, or gift taxes in Malta.
Customs and excise duties
Other taxes imposed include customs and excise duties on certain goods. There is also a tax on air travel.
Stamp duty is applicable on certain documents and transfers, including transfers of immovable property and marketable securities (although certain exemptions may apply) and issues and renewals of insurance policies. Furthermore, in the event that the market value of shares held by a person is reduced following a change in the company's issued share capital or voting rights and the value shifts onto the other shareholders, the transferor would be deemed to have transferred the said value to the transferee(s), and such value shifting may be subject to a stamp duty liability (although certain exceptions/exemptions may apply). Stamp duty is also imposed on transmissions by death of immovable property situated in Malta and shares in Maltese companies. Certain exemptions from stamp duty may, however, apply in respect of such transmissions.
As part of the Covid19 recovery measures, subject to the satisfaction of a number of conditions, transfers inter vivos of immovable property situated in Malta or real rights over such property made between 9 June 2020 and 1 August 2021, are subject to a reduced rate of stamp duty of €1.50 for every €100 or part thereof on the first €400,000 of the transfer value. In cases where the notice of the relative promise of sale or promise of transfer is given to the Commissioner for Revenue before the 1st August 2021, this exemption shall also apply.
No stamp duty shall be charged on the first €250,000 (previously €200,000) of donations of immovable property from parents to their children for the children’s residential purposes. The duty to be charged on the remaining value shall continue being charged at the reduced rate of 3.5%.
The stamp duty exemption on the acquisition of immovable property by first time buyers, in terms of which one may benefit from a saving of stamp duty, has been increased to the first €200,000 (from €175,000) of the transfer value and was extended to 31 December 2021.
Furthermore, subject to the satisfaction of a number of conditions, where a person sells his residential property so as to acquire another residential property and such person does not own other properties, he will be granted a reduction of stamp duty, by way of refund, of up to €3,000.This has been extended to acquisitions made upto 31 December 2021.
In addition, in the case of a transfer of immovable property situated within an urban conservation area or scheduled by the Malta Environment and Planning Authority, the stamp duty chargeable is at a reduced rate of 2.5%. Such reduced rate is subject to the satisfaction of a number of conditions and is applicable to transfers made before 1 January 2022.
The reduced stamp duty rate of 2% on acquisitions of immovable property situated in Gozo was also extended to transfers made upto 31 December 2021.
Stamp duty is imposed inter alia on heirs upon inheritance of immovable property at a rate of 5% and of shares in a Maltese company / interest in a Maltese partnership (not being a “property company” or “property partnership”) at a rate of 2%.
The reduced rate of 3.5% on inherited immovable property being the residential property of the heirs should now be applicable on the first €200,000 of the value of the immovable property.
The interest on duty on documents on transfers causa mortis amounts to 4% per annum or part thereof, which interest applies as from the lapse of one year from the date of such transfer, until the date when the necessary declaration is filed.
The interest rate on unpaid stamp duty is of 0.33% for every 30 days or part thereof, until the amount due remains unpaid.
Subject to the satisfaction of certain conditions, no duty is levied in the case of transfers of immovable property upon the devolution of a dwelling house to a surviving spouse/cohabitant; in the case of a transfer of immovable property upon death by a parent or legal guardian to a disabled individual; or in the case of a transfer of a dwelling house upon death by a parent to their descendants in the direct line.
In the case of the transfer by gratuitous title of (i) marketable securities owned by individuals and of (ii) commercial tenements (i.e. business property) that had been used in a family business for a minimum period of three years preceding the transfer, to the transferor’s spouse, descendants, and ascendants in the direct line and their spouses, or in the absence of descendants to such transferor’s siblings and their descendants, stamp duty chargeable is at a reduced rate of 1.5%. This reduced rate applies to transfers by gratuitous title made prior to 1 January 2022. Once this reduced rate is applied, no other exemption or duty relief should apply to such transfers.