The newly announced measures for Malta’s budget 2022 delivered on the 11th October 2021 provides for a number of new incentives as well as grants extension to the current applicable schemes.
Businesses’
- Unabsorbed capital allowances generated during financial year 2020 and financial year 2021 can be used to set off intra-group income during financial year 2021.
- Duty applicable to transfers intervivos of family businesses to descendants of the family to continue being subject to a reduced rate of 1.5%.
- Range of businesses entitled to the rent subsidy to be widened.
- Malta Enterprise to introduce a tax benefit applicable to businesses which invest in eligible projects of that same business or investments in other businesses.
- Malta shall launch a new ‘Start-up Visa’ which will offer start-ups a flexible method to move their location to Malta.
- Malta Enterprise shall set up the Blue Med Hub with experts to attract local and foreign start-ups and SMEs.
Property
- Exemption from income tax on capital gains and duty on documents and transfers on the first €750,000 of the price of properties (applicable also to properties where a promise of sale has already been entered but final contract has not been signed) which:
- were built more than 20 years ago and which have been vacant for more than 7 years;
- are built in an UCA; or
- are new properties and are built in a typical and traditional Maltese style and architecture.
- First time buyers buying qualifying properties will receive a grant of €15,000, increased to €30,000 in respect of properties situated in Gozo.
- Persons who will own or who already own qualifying properties as above, may benefit from a VAT Refund of up to €54,000 on the first €300,000 expenses incurred for the restoration and improvement of such properties.
- The stamp duty exemption for first time buyers (exemption from stamp duty on the first €200,000 of the consideration), second time buyers (refund of duty paid on the first €86,000 of the value of the replacement property, or the first €150,000 in the case of persons with disability or guardians of persons with disability) and purchases of property in Gozo (rate of duty of €2 for every €100 or part thereof with respect to transfers inter vivos of residential property situated in Gozo) will be extended.
Employment
- Cost of living increase of € 1.75 per week applicable to all employees, pensioners and those entitled to social benefits.
- Qualifying Part-time tax rate will be reduced from 15% to 10%
- Part-time workers with more than one employment will have the opportunity to pay social security contributions with respect to more than one part-time employment, up to a maximum of 40 hours per week. This will result in a higher pension.
- Persons with less than €20,000 annual income and not employed in a managerial role will now be taxed at a rate of 15% on the first €10,000 received from overtime.
- To ensure employment rights are respected by employers, the Government will be setting up a website to make available templates of employment contracts containing minimum requisites provided at law.
- Employees in sectors such as hospitality, transport, manufacturing, wholesale and retail who work nights, weekends and shifts and whose salary does not exceed € 20,000 per annum shall receive an annual in work benefit of € 150.
Interest Rates, Tax Refunds and remissions
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- From 1st June 2022, interest rates on income tax and tax rates will increase up to 7.2% annually (which will result in a 0.6% increase per month)
- Tax refunds for persons earning up to €59,999 to increase depending on annual income
- The tax remission on interest on unpaid tax balances will be tightened under which discretion will be exercised.
Artists
- As of 2022, individuals working in the arts, culture and entertainment sectors shall benefit from a income tax rate of 7.5%, calculated on a 3-year average period.
For more information, please contact us at office@rosemont-com.mt
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