"FY26 was a year of transition for Malta in the tax arena. Enhanced transfer pricing disclosures, a reshaped VAT framework for the gaming sector, and a Government Budget focused on families, innovation, and productivity all called for clear thinking and timely action. Our team rose to the challenge, combining technical depth with technology and AI to give our clients clarity and confidence. We continued to invest in our people, our tools, and our relationships, both here in Malta and across the PwC network."
Highlights of the year
In a year in which the tax landscape continued to shift locally, across the EU, and globally, our Firm’s Maltese tax practice continued to evolve.
Budget 2026, presented in October 2025, placed families, innovation, and productivity at its core. Key measures included revised tax brackets for parents, the full exemption of pension income, a 175% deduction for qualifying research and innovation expenditure, accelerated deductions for investment in AI, digitalisation, automation and cybersecurity, and a 60% tax credit on qualifying investment.
The Budget Measures Implementation Act, published in March 2026, followed with targeted changes to the VAT Act, including VAT-inclusive pricing rules, open market value for certain related-party supplies, and wider powers to set off VAT refunds against other tax liabilities. As in previous years, we provided live coverage of the Budget and a detailed post-Budget analysis.
For the gaming sector, FY26 brought a long-awaited change. Legal Notice 86 of 2026 narrowed the VAT exemption for gambling with effect from 1 October 2026, and guidelines published by the MTCA confirmed that only low-risk games, occasional junket events, and on-site sports betting will remain exempt. We engaged early with our gaming clients on the impact on their VAT recovery position, VAT grouping, and systems readiness, well ahead of the change taking effect.
Our commitment to technology-driven transformation deepened further in FY26. We rolled out Harvey, the GenAI platform adopted across the PwC tax and legal practices, alongside ChatPwC and other AI tools, and continued to develop Generate.TAX, our VAT compliance automation solution.
AI now supports various areas across many of our service offerings, always within the parameters of our GenAI business rules, enabling our teams to spend more time on the judgement and insight that matter most to our clients.
Bringing our insights directly to clients remained an important part of how we engaged with the market during the year. Our biennial Tax Conference, held on 5 June 2026 under the theme “Tax in Transition – Navigating changes in an evolving tax landscape,” provided a forum to explore a broad range of issues shaping Malta’s tax environment, from capital gains, stamp duty and family wealth and legacy planning to fiscal units, incentives, individual taxation, financial services, VAT and international tax, including transfer pricing.
That dialogue extended well beyond the conference itself. Throughout the year, we connected with clients and the wider business community through focused sessions and sector-specific briefings, while also taking Malta’s proposition to international markets through our engagement with clients, intermediaries, and the wider PwC network across different jurisdictions.
2026 marked the next step in Malta’s transfer pricing journey. The income tax return for the year of assessment 2026 introduced a new mandatory attachment, requiring structured disclosures on cross-border related-party arrangements, including the transfer pricing method applied and the arm’s length amounts.
With the grandfathering of pre-2024 arrangements falling away from 1 January 2027, we have been helping clients review their existing arrangements, prepare robust Master and Local Files, and complete the new disclosures, in line with both local rules and OECD guidelines.
We continue to be strongly active in Malta’s leading professional bodies – the Malta Institute of Accountants (MIA), Malta Institute of Taxation (MIT), and Institute of Financial Services Practitioners (IFSP). Through these institutes, we contribute to policy consultations, deliver accredited training, and help shape the future of the profession.
Spotlight on our people
People remain central to everything we achieve. Our tax practice brings together around 200 professionals working across tax, legal, regulatory, compliance, and corporate-managed services, backed by experienced business support teams and acting for a broad mix of local and international clients. A range of expertise and viewpoints helps us arrive at better-informed advice.
During the year, we continued to prioritise learning and development, with a particular focus on practical AI upskilling, so that our teams are well equipped to work with the technology and automation now built into our day-to-day work, and to sustain the standard of service our clients expect.
Working together allows us to bring the right expertise to each matter. Our specialists share knowledge across service lines and with colleagues in the PwC network, enriching both the development of our people and the experience of our clients. We value open, constructive debate as a way to test our thinking and identify better solutions. Above all, we aim to give our clients candid, balanced advice, grounded in the facts and delivered with integrity, so that they can make informed decisions with confidence.
How we showed up for our clients
As the needs of Malta’s businesses evolve, we continued to expand and integrate our offerings to help you, our clients, navigate an ever-changing world. Here are some of the ways we showed up for you in FY26.
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