The Minister of Finance presented the Budget for 2016 in October 2015. Malta’s economy is performing relatively well. The national deficit is set to decrease from 3.7% to 1.6% by the end of the current year. Taxand Malta highlights the key tax measures featured.


Cost of Living Adjustment (COLA)


  • The COLA for 2016 will be an increase of €1.75 per week to all employees and pensioners. As a result, the minimum weekly wage will be €168.01. Students will get a pro-rata increase in their stipend

Income tax


  • Individuals earning the minimum wage and the statutory bonuses will not be subject to any income tax. The progressive income tax rates will be revised such that the burden of income tax will be lower at all levels
  • The option of 15% final withholding tax on rental income from residential property will be extended so that it will also be applicable to commercial property although there will be exclusions with respect to rental income within a group



  • The VAT rate will be reduced from the standard rate of 18% to 7% on sports, gym membership, fitness centres and football nurseries
  • The ex gratia VAT refund on car registrations will be extended to cars registered during calendar year 2005
  • Extension of the VAT refund equivalent to 15.25% of the price up to a maximum of €250 on bicycles and electric bicycles

Duty on documents


  • First time buyers will continue to enjoy an exemption from stamp duty until the end of 2016
  • Stamp duty on immovable property in urban conservation areas will be reduced from 5% to 2.5%

Excise duty 


  • Although the excise duty on petrol and diesel will increase, the prices of petrol and diesel will, with effect from 1 January 2016, decrease by €0.03 and €0.04 respectively
  • The excise duty on cement will increase by €5 per ton whereas that on tobacco will increase by €0.30 per packet of cigarettes
  • The excise duty on beer is being increased by €0.20 per hectolitre per degree Plato whilst excise duty on alcohol and other alcoholic beverages is being increased at rates between 1.33% and 2.5% depending on the type of product

Discover more: Malta announces Budget 2016

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Taxand's Take

The Budget identifies and lists a number of priorities for the coming year, including, healthier public finances, less direct taxes and social security contributions, attracting more foreign direct investment, enhancing the availability of social benefits, a better environment, a more equitable distribution of wealth, more infrastructural investment and improvement in the Government’s efficiency and reduce the bureaucracy.

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International Tax | Malta

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