MALTA BUDGET 2022

The past year has been loaded with challenges due to the pandemic, the repercussions have played a crucial role in defining this year’s budget. Although the 2022 budget contained no real surprises which in itself is always a positive element. The government’s main aim is clearly to steer the country towards an increased workforce with labour supply being a major challenge.

Here is a summary of the most noteworthy points.

Business

• Introduction of New Covid Assistance Schemes
• Renewal of rental subsidies to eligible businesses.
• Capital allowances: Unabsorbed capital allowances stemming from financial years 2020 and 2021 to be temporarily set-off against any income of intra group companies as from year of Assessment 2022.
• Malta Enterprise scheme offering tax advantage on reinvestment of profits ineligible projects within 2 years from 1st January 2022.
• Increase in interest rate on late payment of Income Tax and VAT to CFR (with effect from 01/06/2022)
• Start-up Residence Permit- Malta Enterprise to introduce a new Programme, to attract non-EU persons to relocate and set up in Malta.
• Extension of concession on a reduction of duty to 1.5% applicable to transfers of family businesses.
• Assistance to enterprises by increasing grant up to € 12,000 to switch to lower emission vehicles.

Personal

• Increase in Social Security Pensions - an increase of €260 annually, €5 weekly(including €1.75 for COLA)
• Adjustment of tax rebate calculation - Tax-free pension income up to €14,318
• A further exemption of €3,600 on any other income for pensioners taxed at the married rates.
• As from 2022 and for a period of 5 years, the pension income will be ignored for income tax computation purposes for pensioners who remain in employment.
• Decrease in tax rate to 10% on part-time work as from 2022
• Decrease in tax rate to 7.5% for artists as from 2022

Payroll

• Possibility to pay NI contributions on more than one Part-time employment
• Increase of In-work benefit for atypical shift workers
• Reduced tax rate of 15% applicable on the first € 10,000 from overtime work for employees earning up to €20,000.
• Increase in income thresholds for eligibility to In-work Benefit for working parents
• Increase for COLA of €1.75 / week

Property

• Changes to tax on sale or acquisition of property previously rented at affordable rates in terms of the Housing Authority guidelines
• Tax Exemption on the sale and acquisition of certain properties of a value of up to €750,000.
• VAT refund of up to €54,000 paid on restoration/regeneration of property
  • Properties built more than 20 years ago and left vacant for more than 7years
  • Properties situated in UCA areas
  • Properties with traditional Maltese architecture
• Grant scheme of EUR 15,000 to first time buyers of properties in UCA and EUR 30,000 to such properties situated in Gozo

Other Social measures

• Free childcare for employees working atypical shift hours
• Increased maximum working hours for students (25 hours per week) to remain eligible for full stipend
• Assistance to businesses switching to 'green vehicles'.