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Malta: BUDGET 2023

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 Sommario budjet malta 2023 3

Here are the contents of the budget law voted by parliament last night

 

 

 

 

 

 

 

 

 

 

 

 

Key measures:

  1. The increase in the cost-of-living allowance (COLA) will be EUR 9.9;
  2. Contribution of EUR 10,000 over 10 years for first-time buyers of a property with a value not exceeding EUR 500,000;
  3. Groups of companies that have unabsorbed or unused capital shares for the financial years 2020 and 2021 may;
    2020 and 2021 may carry forward and offset losses against the income of group companies in 2022 (YA2023);
  4. Creation of a Digital Innovation Hub to assist digital transformation of SMEs and start-ups;
  5. Introduction of a one-stop-shop under the Start in Malta brand, which will help start-ups in Malta and assist them to benefit from Malta Enterprise or similar incentives;
  6. the government will invest about EUR 10 million to digitise the judiciary and about EUR 6 million to digitise the maritime registry ;
  7. People who purchase new electric vehicles, including motorbikes, will be entitled to a financial contribution of EUR 11,000;
  8. Maltese authors and co-authors will now be taxed at 7.5% on copyright income ;
  9. Tax credits and increases in scholarships for those pursuing a doctorate and master's education.

ECONOMIC DEVELOPMENTS:

  • Economic growth of 10.3% in 2021
  • Real economic growth of 6% is expected in 2022.
  • The Maltese economy is expected to grow by 3.5% in real terms and 7.3% in nominal terms.
  • Increase of EUR 120 million in the amounts collected by the Commissioner for Revenue.
  • Public debt is expected to stand at 57% of GDP in 2022.
  • Income tax cuts will not be implemented at this stage due to the uncertainty surrounding the international sphere.
  • The COLA will increase to EUR 9.90 per week.

TAXES:

  • No new taxes have been introduced.
  • The tax refund for individuals varies from 60 to 140 euro depending on income.
  • 40% of a person's total pension income will be ignored when calculating the income tax base.
  • Maltese authors and co-authors will now be taxed at 7.5% on royalty income.
  • Groups of companies with unabsorbed or unutilised capital shares for the financial years 2020 and 2021 may continue to carry forward and offset losses against the income of group companies in the following year.
  • The reduction of stamp duty from 5% to 1.5% in case of inter vivos transfer of the family business to direct descendants has been extended.

REAL ESTATE:

  • Contribution of EUR 10,000 over 10 years for first-time buyers of real estate with a value not exceeding EUR 500,000. This will apply to any purchase made after 1 January 2022 and will not be subject to the means test.
  • Extension of the Deposit Payment Scheme - with the aim of helping people who do not have the liquidity to pay the 10% down payment on a property purchase. This scheme will now apply to properties with a value of up to EUR 225,000.
  • Continuation of the tax incentives on the purchase of property when the same property has been built for more than 20 years and vacant for more than 7 years or when the property is located in the UCA area: (i) exemption from capital gains tax and stamp duty on the first €750,000 (ii) subsidy of €15,000 for first-time buyers and €30,000 for first-time buyers purchasing in Gozo, Italy and abroad. First-time buyers and €30,000 for first-time buyers purchasing in Gozo, and (iii) exemption from VAT up to €54,000 on the first €300,000 incurred for the renovation and refurbishment of real estate.
  • First-time buyers, second-time buyers and persons purchasing property in Gozo will continue to benefit from the stamp duty reduction schemes, which will be extended for another year.

 

START-UPS AND DIGITISATION:

  • Introduction of a one-stop shop branded Start in Malta, which will help start-ups to establish themselves in Malta and assist them in benefiting Malta. Enterprise or similar incentives.
  • Creation of a Business Incubation Centre to act as a contact structure for innovative start-ups.
  • Cash grants with investments of around EUR 40 for SMEs.
  • Creation of a Digital Innovation Hub to assist the digital transformation of SMEs and start-ups through AI Cyber High Performance Computing (HPC) and cloud solutions.
  • Financial assistance in the form of cash grants for Maltese companies investing in sustainable digital projects.
  • Gozo businesses and start-ups will also benefit from an extra 10% in the form of a tax credit, which can go up to 20% if the project aims to reduce the carbon footprint.
  • Tax credit up to a maximum of €40,000 for businesses investing in digital projects with the aim of reducing energy and water consumption and reducing waste.
  • Investment of more than EUR 10 million in the digitalisation of justice and EUR 6 million in the maritime register.

HEALTH:

  • 2 years of national insurance credits for persons aged 18-30, who have not worked for a period and have been certified as psychiatric recipients during that period.
  • Benefits for coeliacs will increase by EUR 20 per month.
  • Tax credit of EUR 200 per year to parents for each disabled child undergoing treatment.
  • Introduction of new treatments and a new list of drugs available free of charge through the Government Formulary, including for diseases such as multiple sclerosis.
  • Introduction of new free government clinics in oncology, diabetes and genitourinary treatments.
  • Construction of a new mental health hospital next to the Mater Dei Hospital, to complement the Mount Carmel Hospital, which will be financed with European funds.
  • Introduction of a Therapeutic Centre for the diagnosis and treatment of psychiatric conditions and an Academy of Recovery and
    Welfare for the training of health workers on psychiatric issues.

EDUCATION:

  • New laptop computer per student in Year 7 from the following school year.
  • Tax credits and scholarship increases for doctoral and master's students.
  • Salary increase on a proportional basis
  • Parents who send their children to sporting, artistic or cultural activities will be entitled to a €300 tax rebate.

PENSIONS:

  • Weekly pension increase of EUR 12.50 including COLA.
  • The tax-free pension income threshold is increased to EUR 14,968 for 2023, with a tax discount of EUR 3,600 for married couples who opt for a combined tax calculation.
  • 200 euro increase in service pensions
  • Widowers' pensions can increase by up to €3.54 per week.

SOCIAL MEASURES:

  • The child allowance is increased by €90 per child per year.
  • National insurance contribution credits for those receiving care allowance.
  • Elimination of the means test for social benefits granted to disabled persons.

GREEN ECONOMY:

  • Subsidy for the purchase of new or second-hand vehicles modified to be driven by wheelchair users that are ECO-friendly.
  • Electric vehicles and plug-in hybrids - people who purchase new electric vehicles, including motorbikes, are entitled to a financial contribution of EUR 11,000. This subsidy can be increased to EUR 12,000 in cases where the scrappage scheme is also used. Electric vehicles and plug-in hybrids will remain exempt from registration and annual licence fees.
  • 1,200 additional charging stations for electric vehicles.
  • Financial incentive programmes for the installation of solar panels and batteries and for the rehabilitation of wells in old houses will continue.
  • Continuation of a scheme to encourage companies to replace their fleets with electric vehicles by providing interest-free loans.

OTHER MEASURES:

  • The government will allocate EUR 600 million to subsidise energy and grain.
  • People working off-hours in accommodation, catering, administration, support services, production, transport and storage and who earn no more than 20,000 euro a year will receive a 150 euro subsidy.

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