Individual - Significant developments

Last reviewed - 11 August 2023

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

  • Emoluments payable under certain contracts of employment requiring the performance of work or duties mainly outside Malta may still be subject to income tax at a flat rate of 15%, subject to the satisfaction of certain conditions, which have now been updated.
  • The Highly Qualified Persons Rules, which entitle expatriates to be taxed on their employment income at a 15% flat tax rate (subject to a number of conditions), have been extended.
  • Beneficiaries receiving employment income of at least 52,000 euros (EUR) from a qualifying contract of employment in the innovation and creativity industry may opt to submit an application to 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, as well as for third country nationals. Furthermore, it is possible to apply for two extensions of five years each.
  • The final withholding tax (WHT) rate of 15%, introduced in 2021, in respect of royalty income derived from the publication of literary works will be reduced to 7.5%.
  • The reduced final tax and stamp duty rate on the first EUR 400,000 of the transfer value, implemented as part of the COVID regeneration plan, has been extended so that it will apply to inter vivos property transfer made on or after 9 June 2020, as long as the relative promise of sale agreement had been registered with the Commissioner for Tax and Customs by not later than 31 December 2021.
  • No stamp duty will be chargeable on the first EUR 750,000 of the transfer value upon transfers of vacant property, property in an Urban Conservation Area, and property with traditional Maltese features.
  • No income tax will be chargeable on the first EUR 750,000 of the transfer value upon transfers of vacant property and property in an Urban Conservation Area.
  • Reimbursement of value-added tax (VAT) on eligible expenditure related to the restoration and finishing of certain privately owned residential properties.
  • The exemption from income tax on capital gains upon certain transfers of shares listed on the Malta Stock Exchange was extended to certain transfers of shares listed on foreign stock exchanges that are recognised by the Commissioner for Tax and Customs (subject to conditions).
  • 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 to 31 December 2023.
    • The exemption from stamp duty on the first EUR 200,000 on transfers of immovable property acquired by first-time buyers was extended to 31 December 2023.
    • The reduced stamp duty on acquisitions on property in Gozo was extended for another year.
    • The exemption of stamp duty on the first EUR 86,000 of the value upon the acquisition of the second immovable property to be used as sole residence was extended for transfers that take place up to 31 December 2023.
    • With effect from 1 January 2022, individuals receiving income from artistic activities may opt to be taxed at 7.5%.
    • Certain pension income will gradually no longer be considered as part of the taxable income, starting from 1 January 2022.
    • The interest rate for late income tax payments was increased to 0.6% (from 0.33%) per month or part thereof for payments due from 31 August 2022 onwards.
    • The interest rate on late payment of tax refunds due by the Commissioner was increased to 0.6% from 1 September 2022.