cONTINUE rEADING
Personal Income Tax Adjustments
- One of the key measures announced is the widening of income tax brackets for tax residents, applicable to single individuals, married couples, and parents. This adjustment is expected to result in annual tax savings ranging from €345 to €675 for each taxpayer.
- Detailed updates for Single, Married, and Parent computations are outlined in tax rate adjustments for each category.
Tax Refunds and Pension Income Exclusions
- The financial compensation payment, colloquially referred to as the Tax Refund Cheque, will also be extended to 2025.
- 80% of pension income received in the basis year (BY) 2025 will not be considered as taxable income for pensioners who continue working beyond retirement age.
Deductions for Private Education and HQP Rules
- Parents with children enrolled in independent private schools will benefit from increased deductions against their taxable income; Kindergarten – €3,500, Primary Schools – €4,600 & Secondary Schools – €6,500.
- The Highly Qualified Persons (HQP) Rules will be extended to include professionals in back-office services.
International Tax Adjustments
- The OECD's Pillar 2 initiative, establishing a global minimum tax rate of 15% for large multinational companies, has been deferred by Malta as discussions with the European Commission continue regarding measures like grants or tax credits (QRTCs) to ensure alignment with EU regulations.
Additional Tax Benefits and Incentives
- Enterprises donating to social, environmental, and animal welfare initiatives will also receive a tax credit of up to €500.
- The VAT rate on essential sanitary products will be lowered to 0%, extending to medical accessories for women undergoing cancer treatment.
Interested in other topics announced in Malta Budget 2025?
Read our dedicated article on The national economic forecast, inflation, employment, and fiscal details here.
Read our dedicated article on Property-related incentives, VAT refunds, and property development grants, appealing to homeowners, buyers, and developers here.
Read our dedicated article on Malta’s tech and environmental incentives, future goals, and labour law changes, attracting readers interested in sustainability, tech innovation, and Malta's 2050 vision here.
Alternatively, you can view and download the full Malta Budget for 2025 in PDF format here.
