2025 Malta Budget
The 2025 Malta Budget introduced several initiatives designed to support businesses, promote sustainability, and stimulate economic growth. The following measures represent the key takeaways that will primarily impact Maltese companies in the execution of their responsibilities, depending on the sectors in which they operate:
- Corporate Tax Measures: Government extended the Highly Qualified Persons Scheme for an additional year, and now it shall also cover back-office services.
In order to encourage intergenerational transfer within family-owned businesses, the duty on the transfer inter vivos of company shares and commercial tenements in intra-family donations shall remain to be subject to the reduced rate of 1.5% on the real value.
- Personal Taxation: With effect from 1st January 2025, all personal tax bands will be widened. Kindly refer to table below to examine the newly applicable rates:
| 2024 Income Bracket | 2025 Income Bracket | Tax Rates announced for basis year 2024 | Maximum Tax Saving |
| Single/Separate Computation | |||
| €0 - €9,100 | €0 - €12,000 | 0% | €435 |
| €9,100 - €14,500 | €12,001 - €16,000 | 15% | €585 |
| €14,501 - €19,500 | €16,001 - €60,000 | 25% | €585 |
| €19,501 - €60,000 | 25% | €675 | |
| €60,000 and over | €60,001 and over | 35% | €675 |
| Married /Joint Computation | |||
| €0 – €12,700 | €0 - €15,000 | 0% | €345 |
| €12,701 – €21,200 | €15,001 - €23,000 | 15% | €525 |
| €21,201 - €28,700 | €23,001 - €60,000 | 25% | €525 |
| €28,701 - €60,000 | 25% | €645 | |
| €60,000 and over | € 60,001 and over | 35% | €645 |
| Parent Computation | |||
| € 0 - € 10,500 | € 0 - €13,000 | 0% | €375 |
| € 10,500 - €15,800 | € 13,001 - € 17,500 | 15% | €545 |
| € 15,800 - €21,200 | € 17,501 – 60,000 | 25% | €545 |
| € 21,200 - € 60,000 | 25% | €650 | |
| € 60,000 and over | € 60,001 and over | 35% | €650 |
- Financial Services: Government also intends to continue its legislative drafting vis-a-vis the financial services sector, in order to increase Malta's attractiveness in this sector, specifically in relation to family offices, aircraft leasing, Fintech and AI. To this effect, it was noted that a new legislation on Limited Partnerships is set to be implemented in 2025.
- Energy and Environmental Incentives: To support Malta's transition towards carbon neutrality, measures are being put into motion to incentivise the private sector to invest in large renewable energy installations.
- Gaming and Digital Economy Growth: Malta will issue a new visa specifically for e-sports athletes in 2025, in order to facilitate their relocation to Malta and as part of a broader strategy to expand the gaming sector to include e-sports and digital entertainment. This introduction is also envisaging attracting foreign talent and promoting the digital economy.
Focus will also shift to other important industries including aviation, fintech and AI and well as nascent industries (with proposed initiatives for startups relating to the setting up on an incubation centre in Hal Far with the aim of assisting start-ups in expanding their operations).
Moreover, the European Digital Innovation Hub (DiHubMT) shall continue in its support of start-ups and SMEs via mentorship, pre-accelerator and incubator services, and access to a high-performance computer to aid their research.
- Employment Sector: Although employers are not required to make contributions, they will now be required to provide employees with the option to enroll in an occupational pension plan to promote retirement savings and with employees having the option to opt-out. This change is anticipated to be implemented following discussions with relevant stakeholders. The existing fiscal incentives for contributions from both employers and employees will continue to apply.
In terms of Special Leave, the existing provision of 100 hours of paid leave for every IVF cycle treatment will now also be extended to self-employed individuals.
Similarly, the provision for paternal leave, which currently allows employed fathers a total of 10 days (approximately 80 hours) of paid leave, will now be extended to self-employed fathers as well.
Furthermore, in 2025, new legislation regarding "Equal Pay for Work of Equal Value" is expected to be introduced.
- Judicial System: Government has re-iterated its intention that the Commercial Courts be reinstated in Malta with the aim of creating a better specialised judicial system whilst reducing the work load on the Civil Courts.
- Malta Film Industry: Creative Malta will receive an increased budget of €2 million to assist local film producers and to boost the Maltese film sector. This funding is part of a comprehensive strategy that encompasses involvement in international arts events, the creation of a Culture Hub with a €15 million investment from European funds, and various restoration initiatives nationwide.
These budget initiatives reflect the Government's focus on economic growth, environmental sustainability, and sector-specific support, notably for family businesses, green investments, and digital innovation. This has now been followed with the publication of the Budget Implementation Bill to implement a number of budget measures and other administrative measures.
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.
