Income and other taxes

 

 

"Increase in tax exemption on pension income"

"Introduction of VAT grouping"


Income Tax

 

  • A one-time tax repayment will be granted to full-time and part-time employees earning income of not more than €60,000.
  • Such repayment will depend on the level of income earned and the tax status of the individual.
  • The repayment will vary between €40 and €68, with the highest repayment granted to the lowest income earning employees.

 

Exemption in respect of pension income

  • Following the introduction of the exemption in respect of pension income as from 1 January 2017, the maximum amount of exempt pension income will be increased as set out in the table below:

 

Single Parent Married
€13,200 €13,200 €13,200 (+ €1,000 tax free amount derived from other sources of income)

 

MicroInvest Scheme

  • The value of assistance provided under this Scheme will be increased from €30,000 to €50,000 for Maltese enterprises.
  • Such assistance will increase to €70,000 in the following cases:
    1. Enterprises established in Gozo;
    2. Enterprises having a female majority shareholding;
    3. Female self-employed undertakings.
  • The MicroInvest Scheme will also be extended to enterprises which do not employ more than 50 (currently 30) full-time employees.

 

Tax credits for post-graduate courses

  • Tax credits shall be granted to persons following a postgraduate course (commencing 2017/2018) leading to a Masters or Ph.D. (equivalent to MQF 7 and MQF 8).
  • The tax credit shall be granted up to the level of the first €60,000 of income earned (subject to certain conditions).
  • In the case of persons obtaining a Masters or MQF 7 qualification, the incentive shall be availed of in one year whilst for persons qualifying for a Ph.D. or MQF 8 the incentive shall be extended to two years.
  • Applicants following the post-graduate course on a part-time basis will benefit from this incentive on a pro-rata basis.

 

Combating fiscal evasion

  • The Government will continue to combat fiscal evasion and unfair competition through an increase in penalties.
  • Such increase in penalties will apply to both out-of-court settlement agreements and to any court settlement arrangement.
  • The Joint Enforcement Task Force will continue its programme in order to identify those entities and businesses evading taxes.


Stamp duty

 

Extension of “First-Time Buyers” stamp duty exemption scheme

  • The stamp duty exemption for first-time buyers on the first €150,000 of the value of the property is being extended by a further year.

 

Refund of stamp duty on the purchase of a new residential home for “Second-Time Buyers”

  • Where a person sells his residential property so as to acquire another residential property and such person does not own other properties, he will be granted a reduction of stamp duty, by way of refund, of up to €3,000.
  • Where the person involved has a disability, the refund increases to a maximum of €5,000.

 

Extension of stamp duty reductions for property purchases in Gozo and Urban Conservation Areas

  • The reduction in stamp duty introduced in previous years in respect of property acquired in Gozo (reduction from 5% to 2%) and property acquired in Urban Conservation Areas (reduction from 5% to 2.5%) is being extended for another year.

 


Value Added Tax

 

VAT Grouping

  • Introduction of VAT grouping for the financial services and gaming sectors. This will entitle separate legal persons having a fixed establishment in Malta and which are closely bound to one another by financial, economic
    and organisational links to be registered as one taxable person.
  • As a result, supplies between members of the same VAT group will be regarded as falling outside the scope of VAT.

 

Submission of forms online

  • The possibility for VAT returns and Social Security forms to be submitted electronically shall be extended to entities having 10 or more employees.

 

Higher VAT threshold for small undertakings

  • The turnover threshold under which small undertakings may opt not to charge VAT will be increased from €14,000 to €20,000.

 

Extension of VAT refund on purchases of bicycles and pedelec bicycles

  • Extension for a further year of the scheme for refunding VAT paid on the acquisition of bicycles and pedelec bicycles. This refund shall also be extended to companies which acquire such bicycles for the purpose of hiring out.

 

Grant on purchases of motorbikes, scooters and pedelec bicycles

  • A grant of up to €400 in respect of purchases of motorbikes, scooters and electric assisted bikes. In the case of pedelec bicycles assisted bikes such grant will be in addition to the VAT refund mentioned above.
  • The VAT rate on the leasing of bicycles shall be reduced to 7%.

 

Other indirect tax measures

  • Aligning the excise duty rate levied on certain steel rods and bars to introduce a level playing field on the importation of similar goods.

 

 

Contact us

Neville Gatt

Neville Gatt

Head of Tax, PwC Malta

Tel: +356 2564 6791

David Ferry

David Ferry

Tax Partner, PwC Malta

Tel: +356 2564 6897

Bernard Attard

Bernard Attard

Tax Partner, PwC Malta

Tel: +356 2564 6726

Mirko Rapa

Mirko Rapa

Tax Partner, PwC Malta

Tel: +356 2564 6896

Steve Gingell

Steve Gingell

Tax Partner, PwC Malta

Tel: +356 2564 6896

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