Individual - Significant developments

Last reviewed - 09 July 2021

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

  • 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.
  • The maximum tax credits have increased from 500 to 750 euros (EUR) 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 EUR 750 (increased from EUR 500) in respect of each employee for whom they make contributions.
  • In terms of COVID-19 recovery measures, there are reduced rates of stamp duty and final tax on the first EUR 400,000 transfer value on transfers of immovable property situated in Malta or real rights thereon.
  • 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 EUR 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 EUR 200,000 relative to the purchase of a residence. This rate will also be applicable on the first EUR 200,000 of the value of the immovable property (previously EUR 175,000) on inherited immovable property being the residential property of the heirs.
  • No stamp duty shall be charged on the first EUR 250,000 (previously EUR 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 are now extended to third country nationals.
  • Beneficiaries receiving employment income of at least EUR 52,000 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, a one-time extension of five years is available.