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Tax Updates in 2013 Budget Announced
In his budget speech, the Minister of Finance, the Economy and Investment projected that the Maltese economy will grow by 1.2% in real terms in 2012. The deficit should go down to 2.34% in 2012 and to 1.74% in 2013. Taxand Malta summarises the key tax highlights included in the Budget 2013.
Income tax measures
- The revision of the tax brackets affecting tax payers currently paying tax at the rate of 35%.
- Regarding the introduction of the tax exemption on mergers and divisions; such exemption will be subject to approval and will be granted if the merger or division is not used for tax planning purposes.
Measures related to immovable property
- The 7 year opt-out period from the final withholding tax of 12% upon the transfer of immovable property is being increased to 12 years.
- The amount on which the reduced rate 3.5% of duty on documents payable upon purchase of immovable property is being increased from EUR116,468.67 to EUR150,000.
Increase in the tax rebates for the eligible costs of the film industry from 20% to 23%. The rebate is increased to 25% if the film uses Malta as a location.
Excise duty is being increased by EUR5 per ton on cement, by 2c per litre on fuel, by 6% on cigarettes and by 8% on tobacco.
The budget is not introducing new, far reaching and innovative measures but provides various incentives to help various sectors of the economy. The Government is committed in attracting foreign direct investment to create new jobs in new areas with high added value such as digital games, ICT, research and development.