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Malta Budget Measures

Malta Budget Measures for 2017

The Maltese finance minister, Edward Scicluna on the 17th of October presented the budget plans for the year 2017, with special focus on the areas of social justice and investment.

Budget Minister Scicluna reiterated his absolute and unequivocal support for the financial services sector and his reliability on Malta’s tax system declaring that the Maltese tax system is expected to be introducing numerous structures which include group tax consolidation and notional interest reduction. In order to ensure Malta’s competitiveness and compliance in an international landscape with fast evolvement, the government emphasized that is firmly committed to the advanced progress of its statutory framework.

A snippet of the key measures broadcasted:

  • Tax credits for private pension schemes; companies which offer private pensions to their employees may now start considering their contribution to the scheme as a non-taxable expense. This measure aims at encouraging employers to make contributions to such schemes. Moreover, this measure will entitle employers to a tax credit of 15% for every EUR 1,000 contributed to the scheme. This new measure not only benefits the employer but also the employee who upon investment in the scheme is allowed a maximum tax reduction of EUR150 against his income, such reduction is dependent on the amount contributed.
  • Group tax consolidation; the government will be looking at issuing regulations aimed at giving companies that form part of a group the option to work out their profits and losses jointly. The aforementioned comes as a recent enchantment to the Maltese tax system.
  • Encouraging startups; startup companies whose turnover does not exceed EUR80,000 per annum now have the option of either benefiting from being exempted from having their financial statements audited for the first two years of their operation or choose to have the financial statements audited and then claim a tax deduction which amounts to a maximum of EUR700 per annum or 120% of the audit fee

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