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Tax Cuts In Malta's 2015 Budget

by Ulrika Lomas, Lowtax.net, Brussels
02 December, 2014

Malta's recent 2015 Budget includes a reduction in the number of personal income tax brackets, through a rate cut on income between EUR19,500 and EUR60,000 (USD74,800) from 29 percent to 25 percent.

A tax concession for those purchasing their first property will be extended until June 30, 2015. The tax break exempts the first EUR150,000 of a property purchase from duty.

Value-added tax (VAT) measures include a special VAT refund scheme for non-EU tourists and the introduction of a 5 percent rate of VAT on sales of e-books, down from 18 percent. In addition, the VAT registration threshold, of EUR7,000, will be repealed, requiring every business in Malta to register for VAT.

Malta is also to replace the 35 percent Capital Gain Tax (CGT) on property transactions with an 8 percent Final Withholding Tax (FWT) from January 1, 2015. It will be applicable to traders and non-traders alike. However, in case of non-traders, for property acquired before 2004, the applicable FWT rate will be ten percent, while for property acquired less than a five-year period before the transfer of title, the FWT rate will be five percent. The measure is intended to simplify the regime and tackle non-compliance.

The Budget includes various environmental measures, such as a tax on pollution caused by fish farms and a reduction in the registration tax due on quad bikes and other vehicles with smaller engines.

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