Malta's Budget for 2016, focusing on the theme of a stronger economy, prioritised the achievement of the Government's fiscal targets and a fair distribution of wealth, both socially and geographically, that will benefit everyone.
In 2015, Malta experienced a year of strong economic growth, outperforming other countries in the euro zone and within the EU, registered a 4.2% growth in GDP as well as a considerable reduction in public deficit and unemployment levels. Several measures related to tax were introduced, as well as amendments to existing fiscal incentives. The major fiscal measures are aimed towards incentivising economic growth whilst reducing pressure from both businesses and individuals.
Some of the measures introduced are the following:
Fiscal consolidation
- The Income Tax Acts are to be amended to enable a group of companies owned by the same people to compute their taxable income as a single taxpayer.
Tax Credits
- Companies may qualify for tax credits or a grant with respect to internal transfer of knowledge among employees
- A tax credit of maximum €10,000 will be granted to companies who employ for a period of at least 12 months individuals who wither hold or are reading for a doctorate in science, engineering and ICT.
- Malta Enterprise is to extend its Micro Investment Scheme to grant a maximum of €50,000 in tax credit to self-employed women or companies that are mostly female-owned.
Tax Deductions
- Office buildings are to be included within capital allowances granted to industrial buildings
- Tax deductions are to be made on donations to the arts and the Malta Community Chest Fund, equivalent to 150% of the original value and a maximum of €2000 respectively.
Tax on immovable property
- Landlords will have the option to be taxed at 15% on their gross rental income from their commercial property, in the same way as residential property
- Exemption from transfer duty for first time property buyers on the firsy €150,000 of property value has been extended until the end of 2016.
- The final tax rate on transfers of proeprties situated within Urban Conservation Areas is to be reduced from 8% to 5% of the transfer value. Transfer duty on the transfer of such properties will be halved from 5% to 2.5%.
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.
