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Legal Notices Concerning Income Tax in Malta

21 December 2020

Legal Notices Concerning Income Tax in Malta


Earlier this week, several legal notices were enacted as below:


L.N. 459 of 2020 INCOME TAX ACT (CAP. 123) Exemption from Tax on Certain Property Transfers (Amendment) Rules, 2020

This legal notice extends the reduced property transfer tax of 5% on the first €400,000 of transfer value for all transfers of immovable property situated in Malta as follows:


(i)  the transfer is made on or after 9 June 2020 but before 1 April 2021; and
(ii) the transfer deed is registered by not later than 30 April 2021;



(i)  the transfer is made on or after 9June 2020 but before 1 January 2022; and
(ii)  the transfer is made in terms of a promise of sale or transfer notice of which would have been given by not later than the 31 March 2021; and
(iii) the transfer deed is delivered to the Commissioner by not later than 31 January 2022.


L.N. 460 of 2020INCOME TAX ACT (CAP. 123) Tax Rebate (Pensioners) (Amendment) Rules, 2020

This legal notice increases the tax rebate on pension income for 2021 and is meant to ensure that pension income is not subject to any tax.


L.N. 461 of 2020 INCOME TAX ACT (CAP. 123) Assignments of Rights Acquired under a Promise of Sale Agreement Rules (Amendment) Rules, 2020

The special tax rate of 15% applicable to profits arising on assignment of rights acquired under a promise of sale agreement will apply to the full amount of the profit during 2021 (as opposed to applicable to the first €100,000 in profit)


L.N. 462 of 2020 INCOME TAX ACT (CAP. 123) Deduction (Income from Employment) (Amendment No. 2) Rules, 2020

This legal notice increases the applicable tax deduction from employment income, thereby ensuring that individuals in receipt of the minimum wage are not subject to any tax.


L.N. 463 of 2020 VALUE ADDED TAX ACT (CAP. 406) Value Added Tax Act (Amendment of Sixth Schedule) (Amendment No. 2) Regulations, 2020

At the moment, a person registered for VAT purposes under Article 10 of the VAT Act, must remain registered under Article 10 for a minimum period of thirty-six months prior to being able to request to switch to an Article 11 registration (subject to satisfying the applicable conditions with respect to the small undertaking threshold). This period is now being reduced to 24 months.


Moreover, where a person who registers under Article 10 makes a request to the Commissioner within six months from the date of that registration or before the due date of the first VAT return, whichever is the latest, to convert to a registration under article 11, the Commissioner may accept the request if he is satisfied that the person qualifies as a small undertaking and subject to such other conditions and limitations as may be determined at the time the request is made.


In addition, the legal notices remove the present Category B Article 11 VAT registration, namely: “Economic activities consisting principally in the supply of services with a relatively low value added” which before this change applied to service providers such as hairdressers, beauticians’ plasterers who are required to supply materials in the course of their service provision. This category is now being merged with the “Other activities” which is seeking the entry threshold increase from €20,000 to €30,000 and the exit threshold increasing from €17,000 to €24,000.


L.N. 464 of 2020INCOME TAX ACT (CAP. 123) Double Taxation Relief (Taxes on Income) (Russian Federation) (Amendment) Order, 2020 Commencement Notice

Updated Malta - Russia double tax treaty shall enter into force on the 1st January 2021.


L.N. 467 of 2020 EMPLOYMENT AND INDUSTRIAL RELATIONS ACT (CAP. 452) National Minimum Wage National Standard Order, 2020

With effect from 1st January 2021, the national minimum wage per week related to a normal working week shall be as follows:

(a)  Age 18 years and over ........................€ 181.08

(b)  Age 17 years ...................................€ 174.30

(c)  Under 17 years .................................€ 171.46


L.N. 468 of 2020 EMPLOYMENT AND INDUSTRIAL RELATIONS ACT (CAP. 452) Wage Increase (Employees) National Standard Order, 2020

The 2021 increase in wages of whole-time employees, in view of the Cost-of-Living Adjustment (COLA) shall be one euro and seventy-five cents (€1.75) per week.


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