Malta has introduced further changes to its personal tax framework through the Deduction (Income from Employment) (Amendment) Rules, 2026 (L.N. 106 of 2026), updating the long-standing regime set out in the Deduction (Income from Employment) Rules (S.L. 123.149).
The principal rules (S.L. 123.149) establish a system whereby individuals earning below a prescribed threshold from employment, whether from one or multiple jobs, may benefit from a deduction that effectively exempts such income from tax, provided it remains within the set limits. The 2026 amendment builds on a series of recent revisions to these rules, which have focused on adjusting eligibility thresholds and refining how the deduction applies in practice. In particular, earlier updates had already moved to increase the income ceiling for qualifying employment income, reflecting cost-of-living and wage developments.
L.N. 106 of 2026 continues this trend by further aligning the deduction mechanism with current tax policy, ensuring that low-income earners remain outside the tax net while improving clarity in the operation of the rules. The amendments are understood to refine the applicable thresholds and technical provisions governing how income from multiple employments is aggregated and assessed for eligibility.
The changes reaffirm the role of S.L. 123.149 as a key instrument in Malta’s personal tax system, designed to relieve lower-income workers from income tax while maintaining administrative simplicity for both taxpayers and employers.
Disclaimer
The above does not constitute tax or legal advice and is up to date on the date it was published. Please ensure that you take appropriate advice from tax or legal professionals before making any decisions based on the above.
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