The 7.5% Income Tax Rate for Creative Practitioners
With reference to Article 56 (26A) to the Income Tax Act and S.L.123.211, the Malta Institute of Taxation understands that Arts Council Malta is currently receiving applications from self-employed creative practitioners who during calendar year 2023 derived income from an eligible full-time or part-time artistic activity and elect to be taxed on such gross income (up to €50,000) at a flat rate of 7.5%. The application should be submitted to Arts Council Malta by 15 April 2024 noon. To benefit from the 7.5% tax rate, eligible taxpayers must declare the gross income through Form TA26. Form TA26, together with the tax payment due and the letter issued by Arts Council Malta confirming eligibility should be submitted to the Malta Tax and Customs Authority by no later than 30 April 2024. Late submissions of the application form or TA26 will not be accepted. More information can be found here: https://artscouncilmalta.gov.mt/pages/funds-opportunities/opportunities/reduced-tax-rate-for-creative-practitioners/ The tax paid through TA26 is final and no set-off or refund can be claimed. Taxpayers who elect for this option should declare income from eligible artistic activities in excess of €50,000 through their income tax return together with other income chargeable to tax (if any) and be taxed at the progressive tax rates applicable to them. Expenses incurred in the production of the total income earned from the eligible artistic activities during the relevant year and allowed to be deducted in terms of Article 14 of the Income Tax Act, can be deducted in full from the income exceeding €50,000, up to a maximum amount equivalent to this income. Whilst this presents an obvious benefit in the year in question, any excess expenses do not convert intro trading losses (and as a result cannot be carried forward).
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