Malta Budget 2024 – Highlights – Tax Authorities – Malta

Overview

The Budget for the 2024 legislature was presented to the Maltese
Parliament on the 30^th of October 2023,
against a backdrop of momentous global economic influences,
including the upheaval being caused by the Russia-Ukraine war, the
recessions being experienced by a number of European states, as
well as the unprecedentedly high inflation rates.

Despite the Malta’s high inflation rate, various measures
are also being implemented to counteract the effects of the rising
cost of living particularly felt by those who are most vulnerable,
such as pensioners and low-income
families. This is evidenced through the minimum wage
raise, increases in pensions and children’s allowance.

High on Government’s agenda is the prioritised action
against climate change, with the aim of reaching
climate neutrality by 2050. This will be achieved through fostering
sustainable investment in Maltese businesses, guaranteeing a
concrete commitment to green infrastructure, increasing waste and
energy security and diversification in Malta, and allocating larger
sums of money to cleaner transport and renewable energy sources.
The Climate Action Authority is being established to work towards
attaining this goal.

For another year running, no new taxes were
introduced.

Economic Performance

Personal Income Tax Measures

• Workers are set to continue benefitting from the extended tax
  refund scheme featuring payments between €60
  and €140 to be made to recipients based on
  their income.




• Aimed at encouraging pensioners to continue working beyond
  retirement age, the tax-free bracket for pension
  income is being increased from 40% to
  60%.




• Any widow/er below the age of 61 receiving a
  pension shall be exempt from paying income tax on
  such pension income with effect from 1^st January
  2024.




• With effect from 2024, the tax credit for
  parents with children with disabilities receiving qualifying
  therapy, will be increasing from €200 to
  €500.




• Updates are in the pipeline to the scheme
  providing fiscal incentives to highly qualified
  persons, with a view of this being better aligned with
  Malta’s economic development.




• Extension of the reduced tax rate of
  7.5% currently applicable to income derived by
  athletes, licenced coaches, to other persons engaged in
  sports activities.

VAT Measures

• The VAT refund scheme on restoration works,
  which currently reimburses first-time buyers for the cost of
  construction, completion and any rehabilitation works, will be
  modified to address the anomaly in the system
  under which couples are presently eligible for a higher refund than
  single persons.




• As is the case with income tax, certain VAT
  incentives will also be applicable to persons buying or
  selling property located in an urban conservation area or property
  which has been built for more than 20 years and has been vacant for
  a period of more than seven years. In this respect, such persons
  will also benefit from a VAT refund of a maximum of
  €54,000 on the first €300,000
  restoration and renovation related expenses.

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