How will the Malta Budget 2025 affect your personal finances and those of your business?
On 28th October 2024, Finance Minister Hon. Clyde Caruana presented the Malta Budget 2025.
During his speech, the Minister highlighted the global challenges which the European Union has been facing over the past few years, in particular the effects of energy prices and climate change.
Despite this, according to forecasts published by the EU Commission, EU’s economy is expected to grow by 1% in 2024 and by 1.6% in 2025. Notwithstanding this, Malta is expected to have the biggest economic growth in the EU, with the real GDP having increased by 5.9% in the first half of 2024.
Employment rate in 2023 was reported at 81.3% (increased by 6.1%) whilst that reported in the EU was 75.3%. Malta’s economic growth rate by the end of the year is expected to reach 4.9% in real terms, driven by:
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An increase in employment rate of 4.6%
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An inflation rate of 2.5%
Main tax changes included in the Budget 2025
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New personal tax rates for year of assessment 2026 (basis year 2025)
Single |
Married |
Parent |
|||
Tax band |
Tax rate |
Tax band |
Tax rate |
Tax band |
Tax rate |
0-12,000 |
0% |
0-15,000 |
0% |
0-13,000 |
0% |
12,001-16,000 |
15% |
15,001-23,000 |
15% |
13,001-17,500 |
15% |
16,001-60,000 |
25% |
23,001-60,000 |
25% |
17,501-60,000 |
25% |
60,001+ |
35% |
60,001+ |
35% |
60,001+ |
35% |
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The annual tax refunds of between €60 and €140 will be retained during 2025
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The Highly Qualified Persons Scheme is to be further extended for an additional year.
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Pension income exempt from tax for 2025 will be increased by 20% to 80%.
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Tax deduction for parents who have children in private kindergarten to rise to €3,500, in private primary school to €4,600 and in private secondary school to €6,500.
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Enterprises donating to voluntary organisations can claim a tax credit of up to €500.
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Extension of exemption from Stamp Duty and Property Transfer Tax on property purchases and transfers on the first €750,000, which is:
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built more than 20 years ago and which have been vacant for seven years; or
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within the UCA; or
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for new properties that are built in typical and traditional Maltese style and architecture.
-
-
Reduced stamp duty for first time buyers and second time buyers retained.
-
Reduced duty rate of 1.5% on transfer of family businesses to descendants retained
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QRTCs expected to be introduced in view of the potential implementation of Pillar II in the coming years.
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VAT exemption on supplies of sanitary products and medical accessories used in female cancer treatment