11 BUDGET 2018 BUSINESS COMUNITY HIGHLIGHTS -- for 2019 dated Monday 22nd October 2018
• GDP growth 6.70 %, Unemployment 4.1% Inflation 1.9%
• Cost of Living increase – 2.33 euro Min wage 174.84 euro / week
• Minimum wage earners will additionally increase by 3 euro / week after one year in employment and another 3 euro in the second year.
• Fulltime and Part‐time (prorate) will have leave increase by one day (26/yr)208 hrs
• Pensioner increase 4.50 per week Tax exemption on pension income 13,434 euro
• State pension of 75% when having service pension as well
• Loan interest subsidised for over 40 yrs individual to buy own residence
• Injured self employed will be entitled to pension
• Tax credit for third pillar pension
• Malta enterprise to administer Seed investment scheme for start ups
• Govt bonds for 62+ investors extended
• White paper on Rent subsidy from 3k to 5k pa and tax reduction to landlord
• First time and second time buyer scheme extended to 31/12/2019.
• Electric vehicles will be exempt from registration and duty
• Scheme to restore 20yr old wooden boats
• Motor veichle scrappage scheme extended
• National Blockchain strategy hub administered by Mita
• Family business transfer boll at 1.5%
• Attract Brexit co placing Malta as alternative
• Passport with investment scheme extended
• Electric car Grant
• Vat refund on RO systems
• Free public transport extended to students from 14‐20 yrs
• Vat at 5% on educational stamped material
• Refund of 400 euro for electric motor cycle
• Vo clubs pay no tax up to 10k income
• Money laundering, Tax avoidance and evasion mechanism straightened
• Bicycles and motor bike vat refund scheme extended
10 BUDGET 2017 BUSINESS COMUNITY HIGHLIGHTS -- for 2018 dated Monday 9th October 2017
• GDP growth 6.30 %, Unemployment 4.1% Inflation 1.2 %
• Cost of Living increase – 1.75 euro Min wage 171.51 euro / week
• Minimum wage earners will additionally increase by 3 euro per week after one year in employment and another 3 euro in the third year.
• Fulltime and Part-time employees(prorate) will have statutory leave increase by one day
• Onetime bonus from govt 40-68 euro
• Tax exemption on pension income 13,200 euro
• The Joint Enforcement Task Force will intensify efforts against tax evasion
• Vat exemption threshold Art 11 will increase to 20,000 euro in Sales
• Govt entities setoff introduced
• Rent grant of 25,000 euro against delivery of apartment for 10 yrs for social accommodation
• First time buyer scheme on Bollol for the first 150,000 euro extended to 31/12/2018.
• Second time buyer scheme up to 3000 euro refund on Bollol.
• Pensions are encouraged to pay ni up to 65 years and they will have the pension recalculated
• Pensioners under 65 years who work will be eligible to 15 % social security contribution
• Micro invest tax credit increased to 50,000 euro Lady or gozo business 70,000 euro
• Electric vehicles will be exempt from registration
• Motor veichle scrappage scheme extended
• National Blockchain strategy hub administered by Mita
• Recycling of glass and plastic operated by the private sector
• Ni contribution up to 65 years will enable pension revision
• Bollol for PTSE pensioners at 15%
• White paper on Rent procedures and period
• MFSA to administer Residential home liquidation scheme
• Electric car Grant
• Refund of 400 euro for electric motor cycle
• Citadinanza b’investiment scheme extended
• Citadinanza with merit (sports, art, ect.) introduced/>
09 BUDGET 2016 BUSINESS COMUNITY HIGHLIGHTS -- for 2017 dated Monday 18th October 2016
• GDP growth 4.1% in 2016,EBudget deficit in 2016 of 1.1%,Inflation 1.0% in 2016, 1.5% in 2017
• Cost of Living increase – 1.75 euro
• Tax exemption on pension income 11500 1st yr, 13,000 euro 2nd yr, + 1000 e on other income
• Tax credit incentive for co offering private pensions
• Tax deduction of 120% for co for embellishment of localities project approved by local council.
• Risk investment scheme- tax credit for investing in SME
• Tax credit of 30% on R<D of cultural digital game
• Tax deduction of 150% for co organizing transport to their employees
• Support to Malta two tier tax system and refunds of tax on dividend
• Details tax consolidation regulations for group co
• MSE co Shareholders of less than 0.5% can claim full dividend tax for refund
• MEPA to issue fiscal incentives for developing of parking area an open spaces
• Removal of eco tax
• Trade licence abolishment
• Cens offered to govt shops occupiers
• Malta enter tax credit on renovation of hotels and restaurants
• Malta enterprise tax credit for star ups
• Malta enter scheme to lower energy intensive business
• Malta enterprise Horizon 2020 ( R<D sciences) life science park
• Restoration subsidy for restaurants 50k euro and hotels 200k euro
• Tax incentives for employment for international experience chef up to 10,000 euro
• Enforcement task force ( VAT, IRD, CUSTOMS, TCU) undeclared ee, rentals, importation
• Jobs plus to further reduce unemployment
• Sick leave benefits to parents when child is sick
• Requirement to register rental contracts with Inland Revenue Dept
• Malta stock exchange listing encourage grants
• Removal of 15% tax on disposal of co shares MSE and alternative trading platform
• Statutory audit exemptions for the first 2 years for graduated individuals start up
• Students under 24 years who are S/E may pay minimum Ni contribution @ 15%
• Govt subsidy on Land for young farmers
• Plan to eliminate discrimination between debt and equity financing
• FWT 5% on residential property rented up to 7 years to govt for low income families
• Reduction of duty from 5% to 1.5% on transfer in 2017 of business from parents to children
• Extended to 2017 duty exemption and on restoration up to100,000e for first time buyers
• Reduction of duty on property in Gozo from 5% to 2% for pos in 2017 < deed in 2018
• Property sold by judicial sale, FWT 7% on transfer amount applied to all inherited property
• Excise tax on tobacco, non alcoholic drinks ( 2c) and black plastic bags
• Excise tax on toiletries’ and cement
• Global partner for Air Malta
• Development of Logistics centres
• Govt savings bond for pensioners
• Govt fund for injury or death
• Setting of Malta development Bank to focus on infrastructure
• Setting up of malt export credit agency
• National Economic and social Development fund
• Set up for International accelerator for start ups
• Film Industry incentives – screen adverts
• Pinto Wharf cruise liner terminal extension
• M’scala yacht marina,M’ Scala football ground, Marsa sports club, Motor sports track
• Aim for timely and responsive judicial services
• Non contributory benefits means test extended(married 23,300; single 14,000)
• Longer shop Opening hours extended to further localities
• Publishing of insolvent co and individuals list
• Lesa warning on 1st offence, with increase in fines especial on alcohol
• No smoking in cars with children
• Addolorata cemetery extension
• Social houses accommodation project 50m euro
• Solar farming bonds for commercial and public zones
• New schemes for first time buyers in restoration property
• Holiday homes for foreigners with investment
• Extended photovoltaic grant scheme
• TM registration tax on vehicle from disables spread upon 10 years
• TM Kappara project < Marsa project
• TM refund of vat on registration of vehicles 2005-2008
• Kemmuna reorganization of tourist operational services
• Gozo Tunnel tender
• Gozo Court and Victoria school reallocation
08 Budget for 2016
• GDP growth expected 3.6% in 2016
• Expected Budget deficit in 2016 of 1.1%
• Inflation rate 1.0% in 2015, 18% in 2016
• Cost of Living increase – 1.75 euro
• Charge of 50cents per person per night for tourist accommodation
• Reduction in Income tax bracket trash hold ( Attached)
• Optional 15% Final Withholding tax on rentals extended to commercial premises
• Pension contribution extended from 40 to 41 years ( DOB 1968) to be eligible for pension.
• Termination of ECO tax transferred to Excise Tax on Cement. Alcohol. Cement. Tobacco. Gum. And Plastic bags with or without handles.
• Drop in Fuel cost
• In work benefit 150 euro per child for low income earners
• 7.5 % tax on all part time athletes and coaches
• New scheme for employing immigrants
• Extension stamp duty scheme on first time buyers up to 5000 euro.
• Reduction of tax (8%to 5%) Boll( 5% to 2.5%) on vacant property transfer within urban area
• Financial guarantee assistance through Malta enterprise for start ups repayable in 10 years
• Financial assistance for investment in efficient energy
• Micro invest 50,000 euro for female entrepreneurs
• Tax credit of 10,000 euro for employing PHD students in Science, IT or Engineering
• Compensation up to 10,000 for SME renting new manufacturing space
• Job Plus- New ETC scheme to employ registering individuals
• Subsidy of 125 euro per week on disable employees
• Fine of 1600 per annum for companies failing to employ disables individuals
• Scrap age scheme for cars over 10 years
• New shop Opening hours
• Reform in insolvency laws
• Capital allowance 2% per annum extended to office premises
• Refund of 20 % on wages of new 3 year contract employees in gozo
• 150% allowance on MCCF donations
• Individual investment in solar pales field
• Annual Vrt for vehicles with more than 150000 kilometres
• Gozo Tunnel
07 Tax Refund
When choosing Malta for trading or for holding a company, one has to keep in mind Malta’s competitive tax refund system which makes Malta an attractive tax planning for international trading and holding. Malta’s tax refund system applies to all foreign shareholders. This keeps the low effective tax rate and thus removing the limitations that were present in the old International Trading Company. When a Malta company receives income from trading activities, the shareholders have the right for a refund amounting to 6/7ths of tax suffered on dividends that were given out. Now the shareholder is entitled to claim one tax refund not like before when the refund was received in two parts. When the shareholder is an individual (not a company) there is no need to submit a tax return for the refund. The 6/7ths tax refund is claimed by filing the ITU/2 form with the International Tax Unit. A Malta company do not pay withholding tax on any dividend distributions of the profits. The shareholders of a Malta company have only to pay an income tax rate of 5% after tax refund.
06 Budget for 2014
* 25% drop reduction in power tariffs, reduction in water tariffs.
* Cost of cigarette packets up by 30c, slightly higher prices also for beer, alcohol, bunkering and cement.
* Seven-year programme for the refund of VAT paid on the registration of cars between 2004-2008.
* New vehicle scrappage scheme and grant for car conversions to autogas.
* Cost of living increase 3.49 per week.
* Top rate of income tax reduced to 29% from 32% as announced last year.
* Parents to have first €9,800 of their income tax-free, up from current €9,300.
* Part-time workers will pay 15% tax on the first €10,000 of their income, up from €7,000.
Part time self employed 12,000 euro, can employ 2 individuals.
* Footballers' income to be taxed at 7.5%
* People aged over 45 unemployed for a minimum of two years will retain part of their unemployment benefit on finding a job.
* First-time property buyers up to 150,000 euro will have duty waived next year.
* New Malta Oil and Gas Corporation to handle oil exploration work.
* Free childcare centres from April in project with the private sector.
* Married women aged over 40 unemployed for five years to get tax benefits when they go out to work.
* Benefits for single parents who follow courses.
* Heavy vehicles and horses to be banned form roads during the rush hour.
* Incentives to encourage people to take out private pension.
Residential property taxed at 15 %
Micro invest scheme re issue 45% maximum tax credit
Tax deduction of 5800 for employers who employ 45years over
No govt architect estimation when property is bought by Bank
Vat dept will audit construction and completion file of developer, re invoices
05 Invoicing Rule
If you are a person registered for VAT in Malta, you are required to note the following changes regarding VAT that will be taking place as from the 1 January 2013.
Click Here to download leaflet
04 The Budget - 1 minute snapshot
1. 12 month inflation in September has gone down to 2.3%.
2. Cost of Living Adjustment of €4.08 .
3. Extension of “20 million to industry” scheme: €42 million in schemes to support international competitiveness, innovation, e-Business, R&D, environment and start-ups.
4. High Energy Users Scheme for Gozo.
5. Malta Enterprise to open office in Misurata Libya to stimulate business between Malta and Libya.
6. Plug In Plug out service for start up companies in innovative sectors.
7. Strengthening of incentives to attract international film productions (rebate for production is increased from 20% to 23% and to 25% if Malta is featured as Malta)
8. Hub for Digital Gaming to bring together various organizations.
9. Microinvest extended by two years . Enterprises employing up to 30 employees may benefit.
10. New B start scheme with tax incentive on capital investment which is approved by Malta Enterprise. It will also encourage crowd funding.
11. New factoring financing regime to be drafted and enacted.
12. New amendments for tax exemption in group restructuring.
13. Youth Entrepreneurship Act to be drafted.
14. New Energy ERDF scheme for Gozo.
15. New propositions to be worked upon in the Financial Services Sector particularly in Pension Schemes
16. Rehabilitation projects will continue in various areas and historical sites.
17. Malta Enterprise to revisit investment guidelines for Hotels through an investment tax credit of 15 percent of investment without tax credit. Incentives for Boutique Hotels in certain areas are to be launched.
18. Review on renting licensing rates for Gozo places being rented to Maltese.
19. The present choice on paying capital gains tax or 12% final withholding tax is extended from 7 to 12 years as from 2013 20. Couples or persons purchasing the first residential home taking out bank loans will be able to provide the bank architect property valuation
20. In case of properties whose value exceeds €250,000, before signing of contracts the seller and buyer may request the department to send its architect to issue price valuation on which stamp duty is paid. This valuation remains valid for 6 months from date of issue.
21. As from 01/01/2013 removal of stamp duty on will transfer of property from parents to children.
22. 3.5% stamp duty ceiling for first time buyers is increased from €116,468.67 to €150,000.
23. New employment schemes to be launched.
24. Continuation of construction of child care centres.
25. Continuation of up to €1,300 tax deduction for parents sending their children to child care centres .
26. Women returning to work after 5 years or after having children will maintain one year tax free status.
27. Maternity Leave up to increases 18 weeks .
28. Children’s allowance increases from €350 to €450, and to€527 for families dependent on a minimum wage.
29. Decrease In Tax rates for individuals.
30. Plans for a new PV panel scheme for households .
31. Extension of Solar Water Heater rebate (40% up to max. €400).
32. 15.25% rebate up to €1,000 on double glazing and roof insulation.
33. These schemes will be partially financed through increase in excise duty on fuel consumption of 2c per litre on petrol and diesel and 5 euro per tonne on cement.
34. Scheme for the restoration of residential properties which are classified as Grade 1 and 2 in UCAs.
35. NGOs will also benefit from a similar scheme on buildings transferred to them from Government.
36. Individuals and companies that purchase properties outside UCAs for restoration purposes will benefit from new incentives.
37. Changes in car registration tax.
38. Scheme to support unemployed Gozitans
39. Development of business centre for financial services and ICT companies in Gozo.
40. Increase in 6% on excise duty on cigarettes and 8% on tobacco.
41. Energy benefit: Gas price allowance to increase from €30 to €40.
03 New Dates
The target date of 15th February for the Final with holding Tax of 15% paid by eligable part time self employed individuals has been extended.
Contact us for further information
02 Cash Accounting
As from 1st January 2013, those business operating the cash accounting system, must clearly show the wording "CASH ACCOUNTING" on their tax invoice.
Those business who receive such invoice are obliged to claim vat when the said invoice is paid and not when received.
Kindly contact us for further information.
01 Lower Tax
Parents will benefit from a lower tax for income earned from 2012 onwards.
Details can be obtained from www.ird.gov.mt or contact us.