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NEWCO is an inward investment services provider specializing in the implementation of foreign investment in Portugal, including Madeira Island, and Malta.

Malta Budget 2021

Malta Budget 2021

After four consecutive years of surplus, Malta is set to experience an estimated deficit of 9,4% of its GDP. This percentage, although above the Eurozone average, is still lower than some other countries’ predicted deficits, such as Italy or Spain (both above 10%). To combat this, the Maltese Executive plans to introduce several changes to its State Budget for 2021. Above are highlighted some of these changes:

 

Economy

The economic focus shall be to prioritize investments in public infrastructure, such as road networks, industrial clusters, and health and education facilities. A 10-year strategy will be introduced for the revamping of the tourism industry, as well as a continued commitment to green, carbon-neutral and sustainable energy policies. Furthermore:

  • No new taxes shall be introduced for the fourth consecutive year;
  • Income tax refund paid in the previous 3 years will be renewed for individuals earning less than €60,000 and see an increase to between €45 and €80 for single people, and €50 to €95 for married couples;
  • VAT exempt threshold for businesses to rise to €30,000;
  • The wage supplement given to pandemic-affected businesses is set to continue until March 2021.

 

Property

  • With effect from 20 October 2020, first time property buyers will be exempt from duty on the first €200,000, an increase from €175,000;
  • Individuals who inherit the property in which they currently reside shall pay 3,5% duty on the inheritance, up to a €200.000 maximum;
  • Extension of emphyteusis on commercial properties will be possible if there is to be investment on the property;
  • The reduced rate of tax (15%) on the first €100,000 of gains or profits derived upon the transfer of any right acquired through a promise of sale agreement, shall now apply to the full amount of gains or profits derived with respect assignments of rights affected during 2021.

 

Other Relevant Changes

  • The cost of living adjustment (COLA) is set to €1,75;
  • An additional day of leave is to be granted in 2021, to better accommodate work/life balance;

 

For a more extensive analysis on the Malta Budget 2021, we recommend the following link.

28 Oct 2020