The Malta Budget for 2022 focuses on a number of measures targeted at supporting economic growth in a post-pandemic environment, as well as environmental and sustainability measures. CSB Group's team of professionals have reviewed the budget and highlighted the main points mentioned.

Reduction of Tax on Employment Income

The special rate reduced 15% tax rate applicable to qualifying part-time income will be reduced to 10%.

Part-time workers with more than one job may choose to increase National Insurance rate up to a maximum of 40 hours per week to have a better pension.

Individuals working in a non-managerial position and earning an annual base wage of not more than €20,000 will be taxed at the rate of 15% on their first €10,000 of overtime income.

Adjustment of Taxation on Pension Income

The tax rebate on pension income will be increased such that pension income of a maximum of €14,318 will not be taxed. Married couples applying the married rates will also benefit a further tax rebate with respect to additional income of up to €3,600.

Pension income derived by pensioners who will remain active after reaching retirement age will not be treated as taxable income during the five-year period starting as from next year implying a mitigation of the overall effective tax burden.

Reduced Tax Rates for Artistes

As from next year, income derived by artistes will be subject to a reduced rate of 7.5%. Moreover, artistes' income will also be established over a 3-year average in line with a new mechanism.

Increase in Tax Refunds

The tax refunds receivable by individuals earning not more than €60,000 in annual income will be increased. Individuals subject to tax at married rates will see their tax refund range between €65 and €140, whereas individual subject to tax at the single and parents rates will benefit from a tax refund ranging from €60 to €125 and €60 to €135 respectively.

Increase in benefits for carers at home from €6000 to €7000 a year.

Home Help of your Choice – Subsidy for this scheme will increase from € 5.50 to € 7 per hour.

Personal Tax Incentives

In-Work Benefit income limit for couples who are both working will rise from € 35,000 to € 50,000 per year.

In-Work Benefit income limit for couples whereby one member is working, will rise from € 26,000 to € 35,000 per year.

In-Work Benefit income limit for single parents, will rise from € 23,000 to € 35,000 per year.

Employees seconded to the public sector by private contractors will be paid double for hours worked on Sundays.

Free Childcare Services to be extended for employees whose working hours include evenings, weekends and on shift hours.

Incentives on Electric Vehicles

Increase in the financial grant to incentivize the purchase of less polluting vehicles. From € 8,000 the incentive will rise to € 11,000 and will go up to € 12,000 when the vehicle scrapping scheme will be used. For Gozitans, the financing of the scrapping vehicle scheme will increase by € 1,000 to € 2,000.

Immovable Property: Reduction of Tax (Tax & Duty) on Sale of Affordable Rented Property

The tax and duty on the transfer of property that was rented out for at least 10 years to tenants eligible to assistance in terms of the Private Rent Housing Benefit Scheme administered by the Housing Authority, will be reduced by half up to the first €200,000 of the transfer value. If the property is transferred to the previous lessee, the transfer will not be subject to Property Transfers Tax and Duty.

Immovable Property: Tax Exemption on Certain Properties

Tax relief on the sale and purchase of vacant property which is within the Urban Conservation Area or has heritage value. Capital Gains tax and stamp duty will be alleviated for the first €750,000 of the property price. First time buyers of these properties will receive a grant of €15,000.

Incentives will be offered to those who build new buildings in sync with traditional Maltese architectural styles.

Those buying property in Gozo will receive extra incentives over and above those aforementioned up to a value of €30,000.

For first and second-time buyers in Gozo, the tax reduction schemes on stamp duty will be extended for another year.

Company Capital Allowances

In year of assessment 2022, companies will be able to apply to transfer capital allowances which arose in 2020 and 2021 and remained unabsorbed due to reduced profitability caused by the COVID-19 pandemic to other group companies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.