The Malta Budget 2021 was presented by the Minister of Finance on the 19th of October 2020.
The main direct and indirect tax highlights of the Budget as follows:
DIRECT TAXATION
Taxation on the assignment of rights
The extension of the 15% withholding tax on assignment of rights held in terms of a promise of sale agreement to be extended to the full amount of such rights (currently capped at €100,000).
First Time Buyers
Exemption from duty on the acquisition of immovable property for first time buyers to be increased for properties with an acquisition value of €200,000 (from €175,000).
Second time Buyers
Reduction in stamp duty from 5% to 2% for “Second time Buyers” of immovable property situated in Gozo or Urban Conservation Areas.
Stamp Duty on donations of immovable property (for residential purposes)
Current exemption on donation of immovable property by parents to their children will be widened from €200,000 to €250,000. Current exemption applies as long as the property is donated for the purposes of establishing residence in such property. The portion of value which is in excess of €250,000 shall be subject to duty at the rate of 3.5%.
Extension of reduced rates on stamp duty and property transfers tax
Current reduced rates of 1.5% stamp duty and 5% property transfers tax (which were introduced post Covid-19) to remain to remain in force until 31st December, 2020. Such reduced rates apply for the first €400,000.
Exemption on pension income
The maximum amount of exempt pension income will be increased to €14,058. Furthermore, persons claiming married rates will be entitled to a further €3,600 tax free amount in respect of income from other sources.
Transfer of business property and securities
The reduced 1.5% duty rate on certain intra-family donations of business property and securities in companies has been extended by a further year.
Sale of literary works
Royalties derived from the sale of literary works shall be subject to a special final tax rate of 15%.
Tax refunds to employees
Tax refund to employees will be vary between €45.00 to €95.00 depending on tax status and the level of income.
INDIRECT TAXATION
Vat exemption threshold to be increased from €20,000 to €30,000.
Please contact us if you require further information.
Franco Falzon C.P.A. LL.M
(Managing Partner)
Tel: +356 2010 7771
Mob: +356 9989 5679
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