Budget 2020 Highlights

These are some of the main fiscal measures announced by the Minister for Finance in the Budget Speech for 2020:

Income Tax

• A reduced rate of tax of 15% on the first 100 hours of employee overtime, for employees with a basic salary of under €20,000.
• Increase in the amount of exempt annual pension to €13,798 (with a further €2,000 on income derived from other sources for persons claiming the married rate).
• Employees earning less than €60,000 annually will receive a refund of between €40 and €68.
• Effective 1 January 2020, the first €100,000 of profit on the transfer/assignment of any rights acquired under a promise of sale of immovable property will be subject to tax at the reduced rate of 15%.

Duty on Documents and Transfers

•  The reduced duty rate currently applicable to certain intra-family transfers of business property and securities will be extended to 2020.
• An exemption from duty for “first-time buyers” of immovable property will apply on the first €175,000 of the value of the property (previously €150,000).
• Extension of refund of duty (€3,000; or €5,000 in the case of disabled persons) for persons who sell their first residential property to buy another one.
• Extension of the application of the reduced rate of duty of 2.5% on the acquisitions of property situated in an Urban Conservation Area.
• Extension of the application of the reduced rate of duty of 2% on the acquisition of residential property in Gozo.
• An increase on the value of residential property eligible for the reduced rate of 3.5% applicable to property inherited by the person residing in that property, from €150,000 to €175,000.

 

VAT

• Application of the VAT exemption for education services, to vocational training and retraining provided by recognised institutions.
• Extension of the existing grant equivalent to a refund of the VAT paid on the purchase of bicycles and electric scooters.
• Increase relating to the exemption on special apparatus bought for people with disabilities to a maximum of €1,000.

Tax Administration – new services & options for tax payers

• New online service for VAT and PE registrations.
• New procedure aimed at reducing filing of tax returns: Taxpayers to receive tax statements.
• Tax refunds to be paid within six months.
• Option for pensioners not to pay provisional tax but to have the amount deducted from their pension.
• Option for married couples to file separate income tax returns.

 

The full budget document is available on the website of the Ministry for Finance.