On 14 October 2019, Edward Scicluna, the Finance Minister of Malta, presented budget for the year 2020 to the Parliament. The budget focused on a number of key measures relating to sustainable development, the environment, technological innovation including E-Sports, employment related tax incentives, as well as other incentives relating to industry and property.

The budget has no tax increases. The key measures regarding tax and incentives are as follows:

Individual Income Tax

  • A tax refund ranging from €40 and €68 will be paid to individuals who earn less than €60,000 per annum;
  • 15% tax on the first 100 hours of overtime for workers who are earning less than €20,000 a year and who do not occupy managerial positions in 2020;
  • The tax compliance process will be simplified, and a new system will allow couples to submit separate tax returns and have independent assessments;
  • The exempt threshold for pension income will be increased. For married couples receiving one pension exempted threshold is €15,798 and for other cases €13,798.

Corporate Income Tax

  • Operators within the construction industry can choose to replace existing machinery with new environmental-friendly machines. They can receive a grant of up to €200,000 by Malta Enterprise. This scheme is also relevant for the purchase of new equipment other than vehicles to impact on the environment;
  • From January 2020, new subsidy of 25% of the cost (up to €1,000) will be given to aid the acquisition of batteries storing renewable energy;
  • The exemption of electric and hybrid vehicles from registration tax will be extended for another year to encourage wider use;
  • Stores introducing green corners in their shops, a grant of up to € 3,000 will be given to them;
  • Introduction of new incentive for green environment and complete ban of single use plastics as of 2020.

Family Businesses

  • Extension of reduced stamp duty of 1.5% on intra-family transfer of business by another year until the end of 2020.

Property

  • First-time buyer of immovable property will be extended to exempt the first €175,000 (previously €150,000) from stamp duty.

Other Measures

  • Cash payments for the purchase of property, cars, yachts, and diamonds cannot, as from next year cannot exceed €10,000;
  • Improvement to the Start-up tax credit for new businesses in Gozo.