Malta’s Budget Measures Implementation Act, 2024, is ushering in a series of amendments to various fiscal laws, including the Income Tax Act, Income Tax Management Act, Duty on Documents and Transfers Act, and Value Added Tax (VAT) Act; signalling a comprehensive overhaul aimed at modernisation and efficiency.

Key changes brought about by this legislation include:

• Expanded Property Tax Benefits: Extending tax exemptions and reductions on property transfers previously leased through specific Housing Authority Schemes, aimed at incentivising property transactions and fostering homeownership.
• Immediate Deductions for Intellectual Property: Introducing immediate tax deductions for intellectual property costs to encourage innovation and creativity in the business sector.
• Equity in Tax Treatment: Removing deductions for school transport fees to simplify the tax system and ensure fairness for all taxpayers.
• Broadened Tax Coverage in Sports Sector: Extending the 7.5% tax on income to cover additional individuals involved in sports, aligning with efforts to broaden the tax base and promote equity.
• Empowered Ministerial Authority: Granting the Minister of Finance the authority to establish rules exempting companies from specific audit requirements, enhancing regulatory flexibility and fostering a business-friendly environment.
• Stimulus for Property Transactions: Extending duty exemptions or reductions on property transfers previously leased through designated Housing Authority Schemes, promoting economic activity and supporting housing initiatives.
• Support for Agricultural Sector: Providing duty exemption on transfers of causa mortis of qualifying agricultural land, offering relief to the agricultural sector and encouraging agricultural development.
• Combatting Tax Abuse: Introducing a general anti-abuse provision (GAAR) in the Maltese VAT Act to enhance tax compliance and integrity, safeguarding the tax system from abuse.
• Simplification of VAT Provisions: Removing the provision in the VAT Act related to income tax deductibility of interest, streamlining tax calculations and enhancing clarity in tax legislation.
• Enhanced Transparency in Investigations: Providing broader access to books, records, and documents during investigations, bolstering regulatory oversight and transparency.
• Compliance Measures: Implementing record-keeping requirements for taxable persons not registered for VAT, strengthening tax administration and compliance.
• Procedural Clarifications: Offering clarification on filing correction forms after the issuance of provisional assessments, ensuring procedural fairness and efficiency.
• Revisions in Appeals Process: Introducing changes to the appeals process following decisions of the Tribunal, enhancing the effectiveness and fairness of tax dispute resolution mechanisms.

These changes underscore Malta’s commitment to fostering a modern, transparent, and equitable tax system that promotes economic growth and compliance with tax laws.