Tax incentives for Malta employers and pensioners

During the budget speech for the year 2017, the Maltese Minister for Finance has last Monday announced that a number of fiscal incentives will be introduced for employers who wish to contribute into Malta occupational pension schemes.  The incentives will consist of an income tax deduction for the employer, equivalent to the amount contributed by […]

Written By ACT Team

On October 19, 2016
"

Read more

During the budget speech for the year 2017, the Maltese Minister for Finance has last Monday announced that a number of fiscal incentives will be introduced for employers who wish to contribute into Malta occupational pension schemes.  The incentives will consist of an income tax deduction for the employer, equivalent to the amount contributed by the employer into the pension scheme for the employee as well as a credit of €150 against its tax liability for every €1,000 contributed into occupational pension schemes for the benefit of its employees.

Furthermore, from an employee’s perspective, any pension contributions will not be deemed to be a fringe benefit for income tax purposes and any contribution made to the same occupational pension scheme will benefit from a deduction of up to €150, depending on the amount contributed.

Furthermore, pensioners that are over 61 years of age and who are in receipt of pension income will be exempt from income tax on their pensions up to €13,000 p.a. depending on the tax status of the individual.  This applies to all types of pensions including social security pensions, treasury pensions as well as other local and foreign pensions.  The exemption will be introduced over a 2 year period as follows.

Tax Status
 20172018
Single personsExempt from tax on pension income€10,500 €13,000
 
Married personsExempt from tax on pension income€13,000
€13,000
ParentsExempt from tax on pension income€11,500€13,000

In addition to the above, married couples in receipt of a pension will benefit from an additional exemption on their total income amounting to €500 in 2017 and €1,000 in 2018.

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected].