The 2019 Budget opening speech emphasised Malta’s economic success recording a growth and a surplus of 1% in the GDP. It was further noted that records reflect growth in many sectors and a growth in the labour market leading to a very low rate of unemployment.
Fight against Money Laundering
Malta shall be introducing a 45-action plan over a period of 3 years to combat money laundering in line with the programme of the OECD BEPS project which Malta forms part of as well as implementing the Anti Avoidance Directive (ATAD 1) which will come into force on the 1st January 2019. These measures will include: -
Interest limitation rules
Exit tax rules
General Anti Avoidance Rules (GAAR)
Controlled Foreign Company (CFC) Rules
The introduction of mandatory exchange of information (DAC6) by January 2020
Implementing the EU Dispute Resolution Mechanism (DRM) by June 2019
Implementing the ATAD 2 by January 2020
Tax and Deductions
No new taxes, tariffs or duties were introduced
The exemption of stamp duty on the first €150,000 of the purchase of the property for first time buyers is being extended for a further year
The scheme, that was introduced to refund part of the stamp duty for those selling their residential home and purchasing another, was also extended
The reduction on stamp duty at the rate of 1.5% on family business property and security transfers is being extended for another year
Small voluntary organisations having an income less than €10,000 shall be granted an exemption from tax
A further tax deduction for parents of €300 per child attending independent schools
VAT on ebooks and musical instruments to decrease to 5%
VAT refunds on the purchase and installation of domestic Reverse Osmosis Systems, capped at €70; wedding expenses, capped at €2,000, full refund of VAT on purchasing bicycles and pedelec bicycles
A cost-of-living wage raise of €2.33 per week, with a pro rata addition for student stipends
Qualifying employees earning minimum wage and have been employed for 1 year shall receive an additional €3 per week
Extra day of vacation leave will be granted to all employees bringing the total to 26 days
Families earning a gross income of less than €20,000 will receive an increase in children’s allowance of €96 per child annually
All pensioners apart from enjoying the cost of living increase are to enjoy a further increase by €2.17 per week, over-and-above COLA
The first €13,400 in pension income shall not be taxed
Persons over the age of 75 and living alone shall receive a yearly grant of €300
Tax exemptions will be raised to €2,000 for investments in the Third Pillar Pension Scheme.
People caring for somebody over 85 will be eligible for a carer’s allowance, with no medical assessment needed
Elderly that are not eligible to receive a pension due to not having accumulated sufficient social security contributions shall benefit from a €50 increase in their allowance, which allowance shall increase to €200 and €300, depending on their eligibility
Employees reaching retirement age and working in the public sector will be granted the opportunity, were applicable, to continue working up to the age of 65 and increase their pension
Collective transport organised by employers for their employees has seen a €1.50 daily grant to Gozitan Government employees
Partial refund on Gozo Channed ferry fare for those commuting from Gozo for work
Gozitan university students renting property in Malta shall be granted assistance
Stamp duty reductions on property purchased in Gozo and Urban Conservation Areas that was introduced is being extended for another year
The tax deduction for employers recruiting persons who are working in Gozo has been extended for another year
Environment & Infrastructure
Free public transport to all between the age of 16 and 20
Investment of €100m is being allocated to improve roads
Improvement in public transport
Improvement in waste management
All vehicle-related exemptions related to electric vehicles, conversion to running on gas, scrappage schemes and motorcycles are being extended
Property & Rent
Rental subsidies shall be not be means tested; single persons will be eligible for up to €3,000 per year in subsidies for rent paid instead of the €1,600 they were entitled to and couples with children will be eligible for a subsidy up to €5,000.
Further incentives for landlords willing to rent properties for longer periods at below market rates
Introduction of Equity sharing property schemes, allowing individuals over the age of forty to buy property as joint partners with the government
Maintenance to be carried out at all Housing Estates
White paper to be published to address the following issues:
Obligatory registration of every rental contract without which a property owner will not be protected by law.
Contract must regulate rent increases and how this will take place over the duration of the contract.
The contract must cover a reasonable minimum rental period; all this while retaining flexibility for the tourism market and ‘short lets’.
The implementation of a deposit retention scheme to minimise abuse where property owners decide to keep the deposit despite the tenant having abided by all the conditions stated in the contract.
Revision of laws making it simpler and more efficient to take action against tenants who will breach the rules.
There shall be no fees charged to sit for MATSEC exams
Secondary students are to enter all Heritage Malta sites for free, with free entry for two accompanying adults
Introduce a new system of assessment that will replace mid yearly exams
Improve education on nutrition and healthy dietary
Malta Stock Exchange shall be extending its role to assist small local entities operating in the Fintech industry; it shall enter into partnerships with entities in the blockchain and cryptocurrencies sector; and shall be trading in Real Estate Investment Trusts (REITS)
A new entity will be set up known as TechMT, which shall be responsible to focus on marketing Malta as a hub for digital economy and disruptive technologies such as blockchain
A working group will be established to plan a framework that shall focus on maximising opportunities arising from Brexit and attracting UK operations to come to Malta