Malta

Individual - Significant developments

Last reviewed - 09 July 2021
    • The Highly Qualified Persons Rules, which subject to a number of conditions, entitle expatriates to be taxed on their employment income at a  15% flat tax rate , have been extended.
    • Increase in the maximum tax credits from €500 to €750 per annum in respect of contributions made by individuals into personal pension plans and qualifying voluntary occupational pension plans. Employers who make contributions towards a voluntary occupational pension plan for the benefit of their employees, are entitled to an annual maximum tax credit of €750 (increased from €500) in respect of each employee for whom they make contributions. 

      The following are some of the more significant developments that were introduced in Maltese tax law during 2020 - 2021:

    • Reduced rates of stamp duty and final tax on the first €400,000 transfer value on transfers of immovable property situated in Malta or real rights thereon, in terms of the Covid19 recovery measures.

    • Recipients of royalty income from literary works may now opt to be taxed on such income at a flat  rate of 15%.
    • Income derived from the assignment of a promise of sale that is made up to 31 December 2021, is subject to a flat tax rate of 15% in full.
    • A reduced rate of 1.5% stamp duty with respect to gratuitous transfers of marketable securities owned by individuals and commercial tenements used in a family business to certain family members has been extended up to 31 December 2021.
    • The exemption from stamp duty on transfers of immovable property acquired by first time buyers was increased to the first €200,000 of the transfer value and was extended to 31 December 2021.
    • A reduced stamp duty rate of 3.5%is available for non-first time buyers on the first €200,000 relative to the purchase of a residence. This rate will also be applicable on the first €200,000 of the value of the immovable property (previously €175,000) on inherited immovable property being the residential property of the heirs.
    • 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 own residential purposes. The additional value of the immovable property is to continue being charged at 3.5%.
    • The Malta Retirement Programme Rules were now extended to third country nationals
    • Beneficiaries receiving employment income of at least €52,000 from a qualifying contact of employment in the innovation and creativity industry may opt to submit an application be taxed at 15%.
    • The Qualifying Employment in Aviation (Personal Tax) Rules are now applicable for five consecutive years from when one is first liable to income tax in Malta, also for third country nationals. Furthermore, a one-time extension of 5 years is available.