Malta Budget 2024

The Minister for Finance and Employment, the Hon Clyde Caruana, has delivered the Budget Speech for 2024. The following is an overview of some of the fiscal measures announced:

• A tax credit of a maximum of €500 on donations made by businesses to voluntary organisations registered with the Commissioner for Voluntary Organisations operating in certain sectors
• The extension of tax-exempt bracket for pensions
• Increase in the tax credit for qualifying therapy for children with disabilities
• A review and revision of the Highly Qualified Persons rules
• The extension of the 7.5% income tax rate currently applicable to athletes and licensed coaches to other persons working in sporting activities
• exemption for income tax on capital gains and stamp duty on the first €200,000 on property transfers to tenants who leased the same property under a Housing Authority scheme

 

• The  following existing measures will continue to apply in 2024:

  • 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 and second time buyers (whilst the scheme for purchases of Gozo properties will be removed);
  • the exemption from registration tax for plug in hybrid vehicles, which will also continue to be exempt from annual circulation tax for 5 years from the date of registration;
  • 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)

 

International Tax developments and the obligations under the global minimum tax framework arising under the Pillar 2 Directive (Dir 2022/2523)

The Minister for Finance has announced that Malta will opt for the derogation granted in terms of Article 50 of the Directive, which allows Member States in which no more than twelve ultimate parent entities of groups within the scope of the Directive are located not to apply the Income Inclusion Rule and the Undertaxed Profit Rule for six consecutive fiscal years beginning from 31 December 2023. Malta will be making such an election for 2024.

 

Malta’s tax system

The Minister for Finance has announced that the existing full imputation system of taxation will be retained. The Government pledges to  work on the introduction of fiscal measures in the form of Qualified Refundable Tax Credits which are compliant with Malta’s obligations under the global minimum tax framework.

 

Download the Budget speech here.