Malta | Government Budget 2016

Malta | Government Budget 2016

The Maltese Government’s Budget 2016 – 12th October 2015 (evening sitting)

Relevant government budget measures updated on this website:

Other government budget 2016 highlights:

  • Employees, pensioners and persons on social benefits shall be entitled to the 2016 COLA while students shall be entitled pro-rata.
  • Persons not earning more than the minimum wage shall be tax free in 2016.
  • Tax rates and tax bands are being adjusted in 2016 as indicated on this link.
  • VAT on sport activities, such as gym memberships, fitness centres, football nurseries and other sports facilities shall be at 7% instead of 18% in 2016.
  • A flat tax rate of 7.5% shall be applicable in 2016 on income earned by coaches and players of any sport.
  • Police ‘extra duty’ income shall be charged at a flat tax rate of 15% starting 1st January 2016.
  • In-Work maximum benefit for working single parents earning between €6,600 to €15,000 in 2016 shall be €1,200 per child.
  • In-Work maximum benefit for working parents earning between €10,000 to €20,000 in 2016 shall be €1,000 per child.
  • In-Work maximum benefit for one working parent with dependent children below the age of 23 earning between €6,600 to €12,700 in 2016 shall be €150 per child.
  • Minimum contributory pension and bonus in 2016 shall be €7,280 p.a. for persons with a sufficient number of contributions paid.
  • Minimum contributory pension and bonus in 2016 for persons with an insufficient number of contributions paid shall be pro-rata of €7,280 p.a.
  • Married pensioners receiving a minimum pension shall benefit from €4.15 per week increase over and above the COLA adjustment.
  • Persons born after 1968 shall require 41 years of valid social security contributions instead of 40 years to be able to apply for a full pension.
  • Persons who in agreement with their employer continue to work after pensionable age shall have their pension increased by 2% – 4% per additional year in employment.
  • Pensions shall accrue on the day after the pensioner stops working or on death of the spouse.
  • Service pensions and disability pensions shall increase.
  • Pensioners of 75 years and over shall retain the grant €300 p.a.
  • Company donations of €2,000 and more to the Community Chest Fund shall be allowable as an expense.
  • Compensation of up to half the minimum wage shall be grated to persons employing in-house carers.
  • As from 2016 inherited properties may be sold after after three years of their inheritance if 51% of the heirs agree to sell the immovable property.
  • Stamp duty on immovable property in Urban Conservation Areas shall be at 2.5% rather than 5% for 2016.
  • The final withholding capital gains tax on immovable property in Urban Conservation Areas shall be at 5% rather than 8%.
  • As from the 1st July 2015 to the 31st December 2016 first time buyers shall benefit from up to €5,000 in stamp duty on the purchase of immovable property – view First Time Buyers Stamp Duty Relief Scheme conditions.
  • As from 2016 the cost of immovable property built for office purposes shall enjoy an annual capital allowance on the value of the property identical to that of industrial property, hotels and parking areas.
  • Rentals of commercial and residential premises shall all be taxed at a final withholding tax rate of 15%.
  • Excise tax shall be introduced on chewing gum, water and non-alcoholic beverages and plastic bags.
  • Excise tax shall be increased on petrol, diesel, tobacco, oils, lubricants, cement, cigarettes, beer and wine.
  • As from January 2016 the price of petrol and diesel shall decrease by €0.03 and €0.04 per litre respectively.
  • Gas prices shall remain unaltered up to April 2016.
  • As from 1st April 2016 an environment contribution of €0.50 shall be levied on persons 18 years or older per night capped at €5.
  • Parental leave shall be granted also to couples making use of IVF facilities.
  • As from 2016 ITS students shall be granted €233.
  • Micro Invest tax credit scheme to increase to €50,000 instead of €30,000 for self-employed women or companies principally owned by women.
  • Small manufacturing firms shall benefit from a €10,000 p.a. rental of additional space for up to 2 years.
  • A Start-Up financial assistance eligible to ordinary companies and those engaged in innovation and crowdfunding shall be of €200,000 to €500,000 and shall be repayable back within 10 years.
  • Firms employing individuals in their research departments with a doctorate or reading for a doctorate in science, IT & engineering shall be entitled to a maximum tax credit of €10,000 if the employee is retained for at least 12 months.
  • The capital allowances on the first year of electric and hybrid vehicles shall 50% of the cost.
  • Registration of company fees filed by electronic means with a share capital of not more than €1,500 shall in 2016 be €150 instead of €250.
  • Firms employing more than 20 employees that do not also employ persons with disability according to legislation shall have to pay a contribution of €1,600 rather than €800.
  • Employers of persons with disability shall continue to benefit from the refund on the social security contribution paid by the employer on behalf of these employees, while employers will receive 25% of the salary paid to the disabled employee together with a subsidy of €125 per week for three years.
  • In 2016 a stipend shall be paid to “mature” students attending specific courses.
  • The performance guarantee for tender below €500,000 shall be that of 4% instead of 10% on the value of the tender.
  • The bicycle and electric bicycle grant shall be retained at 15.25% of the price of the bicycle up to a maximum of €250.
  • Vehicle scrappage schemes shall be introduced.
  • Hybrid and electric vehicles shall not pay CVA to enter Valletta.
  • VRT for vehicles with 160,000 km shall now be annually.
  • Road licences for vehicles with an engines of 125cc shall be reduced to €10.
  • Road fines shall be increased in 2016.
  • Donations for art causes shall be allowable as an expense for up to 150% of the donation.

  IMPORTANT ANNOUNCEMENT   The Ministry of Finance in a statement PR152243 withdrew the Budget Document 2016 published on its website.  The Ministry states that a number of measures of this incorrect ‘working‘ document were not in the Budget 2016 speech since the Maltese Government had not yet approved them.  The Maltese Government’s Budget 2016 is now being considered that as read by the Minister in Parliament. wishes to apologise with its users for any inconvenience caused since a number of the measures previously announced on this website were extracted from this Ministerial published and later withdrawn document.  This webpage now complies with the Government Budget 2016 speech.  It is being recommended that strategic decisions based on the Budget speech 2016 are to be taken only once the budget measures are introduced through appropriate legislation.  

Downloads:  Budget 2016 Speech in Maltese

2 thoughts on “Malta | Government Budget 2016

  1. According to my calculations the tax schedule as presented in the Budget speech and Budget document are incorrect.

    The correct tax bands should read as follows:

    Single Rates:
    Income From: €19,501 To: €60,000 (x25%) and Subtract €2,815
    Income From: €60,001 To: over €60,001 (x35%) and Subtract €8,815

    Married Rates:
    Income From: €28,701 To: €60,000 (x25%) then Subtract €4,025
    Income From: €60,001 To: over €60,001 (x35%) then Subtract €10,025

    Parent Rates:
    Income From: €21,201 To: €60,000 (x25%) then Subtract €3,155
    Income From: €60,001 To: over €60,001 (x35%) then Subtract €9,155

    • When this website uploaded the announced 2016 budget tax schedules on the Employee Tax Rates page and the Tax Rates in Malta page it included a disclaimer stating that the “Data may be officially subjected to corrections.” In the meantime this website has tried to obtain an official confirmation as to whether the announced budget tax schedules required correction but as yet has received no reply.

      Your observations are correct, as has been pointed out to us by other website users. We felt that we should place the official data and what we think should be the corrected data side by side such that we leave room for misinterpretation of the budget 2016 tax schedules.

      View corrected Budget 2016 Single, Married and Parent Tax Bands.

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