Budget 2023 – Fiscal Measures Highlights

Yesterday evening the Minister for Finance and Employment, the Hon Clyde Caruana, delivered the Budget Speech for 2023. The following is an overview of some of the fiscal measures announced:

• Tax refunds will once again be issued in 2023, ranging from €60 to €140, to individuals earning less than €60,000 p.a.
• An increase in the tax-exempt threshold of pension income.
• 40% of qualifying pension income exempt in 2023, in accordance with SL. 123.204
• Tax rebate for parents whose children attend qualifying sports, cultural, and artistic activities to be increased from €100 to €300.
• Tax credit of €200 for parents of children with disabilities
• €90 annual increase in children’s allowance
• Income tax rate for royalty income derived by authors and co-authors reduced to 7.5% (from 15%)

These are some of the existing fiscal measures which will be extended in 2023:

• the annual in-work benefit of €150 to employees in certain sectors (e.g. accommodation, manufacturing and transport), who work atypical hours and who earn a basic salary of maximum €20,000 p.a.;
• the reduced stamp duty rate of 1.5% applicable to inter-family transfers of shares/qualifying family businesses;
• the stamp duty schemes for first time buyers, second time buyers and purchases of property in Gozo;
• the tax exemption on first €750,000 on transfers of certain property (property constructed over 20 years ago which has been vacant for 7 years, property in an UCA or property with traditional Maltese features);
• the grant equivalent to the VAT paid on the restoration of certain property (property constructed over 20 years ago which has been vacant for 7 years, property in an UCA or property with traditional Maltese features)
• the exemption from registration tax for plug in hybrid vehicles, which will also be exempt from annual circulation tax for 5 years from the date of registration
• the possibility for group companies which incurred losses in FY2020 and FY2021 due to the COVID-19 pandemic to surrender unabsorbed capital allowances to profitable group companies in FY2022

Download the full Budget Speech here.