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Malta announces Budget 2014


The Minister of Finance presented the Budget for 2014 on 4 November 2013. The Budget contains a number of fiscal measures aimed at ensuring public finance sustainability, enhancing competiveness and raising potential output. Taxand Malta highlights the key tax measures featured.

Income tax measures

  • The personal income tax rate for individuals earning up to €60,000 has been reduced from 32% to 29%
  • The 15% tax rate applicable to part-time employment will apply to income not exceeding €10,000 for employed individuals and €12,000 to self-employed part-time individuals
  • Gross rental income may be subject to a 15% flat rate tax if the property being rented is used for residential purposes

Measures related to employment

  • A tax deduction of €600 for every employee will be granted to businesses who employ inexperienced workers
  • A tax deduction equivalent to 50% of training provided to employees between 45 to 65 years will be available to employers


  • As part of the merger between the VAT Department, the Inland Revenue Department and the Customs and Excise, new amendments will be introduced to simplify various legislative provisions
  • The VAT legislation will be amended and a new system introduced with respect to tax in dispute such that VAT payments will no longer be allocated against VAT that is under appeal
  • Penalties for late filing of VAT returns will no longer be due when a VAT return is filed on time but without the relative payment

Duty on documents and transfers

  • A one-time exemption from the payment of the 3.5% duty on the first €150,000 of the price of immovable property will be granted to first time buyers acquiring immovable property in 2014
  • The Government will revise the existing property valuation system and start accepting valuations from private architects but will also introduce safeguards so as to curb abuse

Other measures

  • The Cost Of Living Adjustment (COLA) is €3.49 and therefore the minimum wage will increase from €162.19 per week to €165.68 per week
  • As from March 2014, the water and electricity rates for residential units will be reduced by around 5% and 25% respectively

Discover more: Malta announces Budget 2014

Your Taxand contact for further queries is:
Walter Cutajar
T. +356 2730 0045

Also published in Thomson Reuters' Taxnet Pro, 7 November 2013

Taxand's Take

The Budget will not introduce any new taxes on either individuals or companies. A number of the measures aim to increase active participation in the labour workforce and incentives may be claimed by both employers and employees. Changes to the main tax legislation, namely the Income Tax Act, the Value Added Tax and the Duty on Documents and Transfers Act, are positive and there are no radical changes. Therefore businesses may be more interested in exploiting the tax incentives related to employment and unless they have already availed themselves of the MicroInvest Scheme they may also claim tax credits with a view to reduce their tax liability.

Taxand's Take Author