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Malta Budget 2016 How does it affect you?

Income Tax

Measures The Property

Market

The Sports

sector Fiscal

Consolidation Incentives

See how individuals

and companies will be

affected by new

income tax measures

Page 2

See what has been

announced in the

Property Sector

Page 3

See new measures

introduced in the

sports sector to

promote it further

Page 3

See what has been

announced in the

Property Sector

Page 4

See what new or

improved incentives

have been announced

for the industry

Page 4

Income Tax Measures

Key points

1 Cost of Living Adjustment (COLA)

2 Changed personal tax bands

3 Members of the Police Force

(married computation) and from € 9,800 to

€11,500 (parental computation). Income tax

cuts will mostly benefit those with an annual

income of €28,700 and under. They will save

between €90 and €210 euro per annum.

Rates Single Married Parent’s

0% Up to €9,100

Up to €12,700

Up to €10,500

15% €9,101 - €14,500

€12,701 - €21,200

€10,501 - €15,800

25% €14,501 - €60,000

€21,201 - €60,000

€15,801 - €60,000

35% Over €60,000

Over €60,000

Over €60,000

With effect from 1 January 2016, police

officers’ income from ‘extra duties’ will be

subject to a reduced rate of tax of 15%.

Corporate donations in excess of €2,000 to

the Malta Community Chest Fund are to be

allowed in full as a deduction for tax

purposes, also a tax deduction equivalent to

150% of an actual donation made to the arts

shall be allowed.

Businesses that buy hybrid or electric vehicles

will be allowed a tax deduction equivalent to

50% of the cost of the vehicle in the year of

acquisition.

Pensioners with an income of under €140 per

week will get an increase in their pension of

between €4.15 and €8.92 per week. The

€300 per year benefit for pensioners over 75

will be retained.

Malta’s Economy

In 2015, the Maltese economy experienced a

GDP growth of 4.2% while a 3.6% growth is

expected in 2016.

Unemployment rate in 2015 stood at 5.8%,

and is expected to fall further in 2016. The

Government’s debt as a percentage of GDP

is at 66.56%

4 Donations to the Malta

Community Chest Fund

5 Donations to the arts

6 Hybrid/electric vehicles

The Cost of Living Adjustment (COLA) for 2016

will be Euro 1.75 per week. This shall be

received in full by pensioners and persons on

social benefits.

Income tax will be reduced for those who did not

benefit from lower income tax in the past two

years. The Minister has announced a reduction

in personal income tax by increasing the income

on which no tax is payable from €8,500 to €9,100

(single computation), from €11,900 to €12,700

7 Pensions

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Malta Budget 2016 | 2

5

&

The Property Market Key Points

1 1st-time

buyers 2 Inherited

Properties 3 Properties in

UCAs 4 Commercial

Property Rental 5 Capital Allowances

on offices

The Sports Sector

Malta Budget 2016 | 3

VAT on sports activities will go down from

18% to 7%.

The 7.5% tax on income earned from sports

will be extended to include players and

coaches of all sports.

First-time buyers are to be exempt from

paying stamp duty. This measure applies

retrospectively from 1 July 2015 and will

continue to apply until the end of 2016.

As a measure to reduce the number of vacant

properties, inherited properties may be sold

after the lapse of 3 years from the current 10.

Stamp duty on sale of regenerated property

in urban conservation areas (UCA) is being

reduced to 2.5% from the standard 5%, if the

contract is executed between 1 January and

31 December 2016. Furthermore, the rate of

FWT that will be levied on transfers of

restored property within an UCA, effected in

2016, will be reduced from standard 8% to

5%.

15% final withholding tax on rental income

will be extended to commercial properties.

This shall not apply in case of property rental

between related parties.

The 10% initial deduction of capital

expenditure and a 2% annual wear and tear

capital allowances will be extended to office

buildings.

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Fiscal Consolidation, Incentives & Other Measures

Companies within the same group will be

able to present their income in an aggregate

manner through a consolidated income tax

return as if they were one company.

Individuals who earn between €6,600 and

€15,000 annually will be receiving €1,200 for

every child as an ‘in work’ benefit, a scheme

introduced in the last budget.

Working couples earning between €10,000

and €20,000 will be receiving up to €1,000

per child. Families with only one working

person earning between €6,600 and €12,700

will receive up to €150 per child.

An environmental contribution is to be paid

by tourists amounting to €0.50/night in Malta

not exceeding a total of €5 per visit. Visitors

aged under 18, including language students,

will be exempt;

Registration fees for companies that are

incorporated with an authorised share capital

of €1,500 or less shall be reduced from €250

to €100.

The one tablet computer per child project will

start being rolled out next year, starting from

Year Four students.

New childcare centres will be set up in

Zebbug, St Julian’s and Floriana.

Mature students will now also get a stipend.

The allowance for Gozitan students working

in Malta will be raised by €300 per year.

To boost alternative energy, families who

cannot install PV panels on their roofs may

now invest in communal solar farms.

A €7,000 grant will be given to scrap your 10-

year-old car and buy an electric vehicle

instead. A €2,000 grant will be given for an

electric quad.

Excise tax on cement, tobacco, fuel and

alcohol to be increased.

A number of schemes are also being

announced by the Malta Enterprise to

facilitate business include aid to:

Start-ups: Assistance will be in the form of

financing of up to €200,000, repayable to

Malta Enterprise over a 10 year period. This

can increase to a maximum of €500,000 for

enterprises developing high value added

innovate products, processes, or services,

and can be used to finance the purchase of

equipment.

Assistance to small manufacturing firms

wishing to rent bigger premises: Relocation

allowance of up to €10,000 per year, for up to

2 years.

Tax credit or financial grant to encourage

knowledge transfer from existing employees

to new employees as well as the acquisition

by Maltese workers of new skills necessary to

attract more work to Malta.

A tax credit of up to €50,000 will be given to

those small companies where a majority of

the equity is controlled by women. Such

measure is taken to promote

entrepreneurship among women.

Entrepreneurs investing in Gozo and

employing people for a minimum of three

years will be eligible to a refund of up to

€5,000 per employee.

The government will provide a subsidy for the

wages of disabled employees of up to €125

per week, a refund of 25% of the wage paid

and cover the social security contributions of

such employees.

Public private partnership to modernize

Mriehel industrial estate.

Malta Budget 2016 | 4

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Malta

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© KSi Malta 2015