Income and other taxes

Reduced rate of tax on overtime

• Starting from 2020, the first 100 hours of overtime in relation to employees with a basic salary of not more than €20,000 (and not in a managerial post) will be taxed at 15%.

Exemption on pension income

• The maximum amount of exempt pension income will be increased to €13,798 with persons claiming married rates being entitled to a further €2,000 tax free in respect of income from other sources.

New service offerings by the Office of the Commissioner for Revenue

• New online services for VAT and Private Employer (PE) registrations.

• Pensioners may opt not to pay provisional tax but to have an amount deducted from their pension.

• Married couples may opt to file separate income tax returns.

• Taxpayers to receive tax statements (on a provisional basis) in an effort to reduce the filing of tax returns.

• Tax refunds to be paid within six months.

Tax refund to employees

• The tax refund paid in the previous two years will be granted again to employees earning less than €60,000. The refund will vary between €40 and €68 depending on the level of income and tax status of the employee.

Tax on assignment or cessation of rights over property

• As from 1 January 2020, the first €100,000 of any profits or gains arising on the assignment or cessation of any rights acquired under a promise of transfer of immovable property or any rights thereon will be subject to a tax at the rate of 15%. Any profits or gains exceeding €100,000 will continue to be subject to tax at 35%.

Tax measures relating to Gozo

• Improvement to the iStartup tax credit to further incentivise new businesses setting up in Gozo.
• Fiscal incentives to be granted in respect of relocation expenses incurred by those companies relocating their operations to Gozo and also to those companies creating new employment opportunities in teleworking and back office sectors.

• An extension of the reduced duty rate on certain intra-family transfers of business property and securities.
• First-time buyers of immovable property will now be exempt from stamp duty on the first €175,000 of the value of the property (previously €150,000).
• Continued reduction or refund of stamp duty on the purchase of a new residential home for “Second-Time Buyers”, in Gozo (reduction from 5% to 2%) and in Urban Conservation Areas (reduction from 5% to 2.5%).
• The reduced rate of 3.5% on inherited immovable property being the residential property of the heirs shall now be applicable on the first €175,000 of the value of the immovable property.

• The Government will continue investing in new security equipment at the Malta International Airport and at the Grand Harbour to prevent tax evasion, illicit activities, entry of illegal goods and to promote fair competition.

• Cash payments for the purchase of property, cars, yachts, and diamonds cannot, as from next year, exceed €10,000. This measure seeks to combat tax evasion and stimulate fair trade.

• The VAT exemption on the provision of education and educational research will be extended to approved vocational training and retraining.
• The grant equivalent to the VAT amount on the acquisition of bicycles and pedelec bicycles is being extended for another year.
• The VAT exemption on special apparatus bought for people with disabilities will increase by €400 up to a maximum of €1,000.