The Government of Malta has by means of ACT X111 of 2024 amended the Income Tax Act. A summary of the main amendments are the following:
Expenditure of a capital nature on intellectual property or any intellectual property rights
Any expenditure of a capital nature on intellectual property or any intellectual property rights incurred by a person and which are proved to the satisfaction of the tax authorities to have been used or employed in the
production of the income of such person are allowed as a deduction for income tax purposes in terms of Article 14(1)(m) of the Income Tax Act. Any such expenditure shall be spread equally over a number of years which shall not be less than three consecutive years, the first year being that in which the said expenditure has been incurred or the year in which the intellectual property or intellectual property rights is first used or employed in producing the income.
By means of the new amendments, the above has been amended with effect from year of assessment 2024, by virtue of which, such expenditure may (not withstanding the above) be deducted in the year in which the said expenditure has been incurred or the year in which the intellectual property or intellectual property rights were first used or employed in producing the income, subject to such conditions which may be prescribed by the Commissioner for Revenue.
School transfer fees
The possibility for any person to deduct for income tax purposes any fees for the use of school transport in respect of his children, who have not attained the age of sixteen years and who attend a church school or private school has been removed with effect from year of assessment 2025. Such an expense was previously allowed as a deduction against that person’s income, up to a maximum of €150 per child.
Emoluments from sports activities
Individuals who derive income from a full-time or part-time sports activity, either as a registered player or athlete or as a licensed coach shall, unless he opts to have the said income charged to tax at the standard rates of tax applicable to resident individuals, be charged to tax on all such income at the rate of 7.5% of the gross amount. The tax charged shall be final and no set-off or refund shall be granted to any person in respect of the tax so charged.
By virtue of the amendments to the ITA, it was stipulated that the Minister may by means of rules, make the above-mentioned tax rate applicable also to other individuals in a sport activity in a full or part time employment, including match officials and sports administrators, subject to such limitations and conditions still to be prescribed. This will be applicable as from year of assessment 2025.
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