Malta’s recently released 2022 Budget includes measures to support low-income workers and those working part-time or overtime, to improve the supply of affordable housing, and to introduce a new concessionary tax regime for artists and performers.
The Budget includes the following changes to the personal income tax regime:
- The tax exempt allowance for pension income will rise to EUR14,318.
- For those earning overtime income of not more than EUR20,000 for the first 100 overtime hours, a concessionary 15 percent rate of tax will be offered for the first EUR10,000 in overtime income, providing the worker does not hold a managerial position.
- The income tax rate on part-time work will be reduced to 10 percent from 15 percent. Further, those working at weekends and evenings will receive back 10 percent of the tax they have paid, providing their income is not more than EUR20,000 and they have worked at least six months in the calendar year.
- For those working beyond retirement age, pension income will not included in the taxable base for income tax purposes.
- A new tax regime with a 7.5 percent rate will be introduced for performers and artists, with effect from the 2022 tax year.
The Budget also features several property tax relief measures to encourage use of vacant houses, including generous value-added tax exemptions, as well as new tax perks for first-time buyers. Further, the concessionary 1.5 percent rate of stamp duty for inter-generational transfers of family businesses, down from five percent, is being extended.
The Budget is to extend tax relief measures for the purchase of electric vehicles and tax law will be amended to improve access to tax breaks for persons with disabilities.
Finally, Malta intends to make the rules stricter for taxpayers to have interest waived under agreements with the tax authority and the interest rate on income tax and VAT balances will be 7.2 percent per year from June 1, 2022.