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Principal Fiscal Measures for 2017 announced in Budget Speech

The post below is not meant to be a comprehensive summary of the budget measures but rather a highlight of what we think are the main fiscal measures likely to influence sole traders and small businesses.

Minister for Finance Edward Scicluna Budget 2014 briefcase

We have kept it short in line with our objectives of making it more readable for small business owner-managers who might not have had the time to go through the more detailed measures but would like to have a quick overview of the main measures that might effect them. You are encouraged to contact us for further details. 


Pensions exempt from income tax

Over a two year period the Government intends to exempt all pensions not exceeding €13,000 from income tax. Although the exemption is intended to cover all pension sources subject to the above maximum,  this capping is equivslent to the highest pension offered by the government;

Extension of in-work benefit

Sinlge parents or couples earning a low income will see an increase in the “in work” benefit they receive which will strenghten this measure introduced in the 2015 budget. It is expected that about 3,000 low income families will be positively impacted by this measure.

Rent subsidy to double and lower tax for low income tenants

Families eligible to the rent subsidy will see their subsidy double provided a rental contract is presented. In the meantime, in order to alleviate the upward pressures on increasing rents, the government will be introducing a pilot project for landlords who rent properties to low income families to pay a reduced rate of 5% on that rental income (instead of the current 15%).

Tax reductions for Companies providing free transport

Companies who provide free transport for their employees will have a tax reduction of 150% of the expenses incurred subject to a maximum of €35,000. The capping is €50,000 when companies team up together.

Tax exemption on dividends from listed companies

Shareholders holding not more than 0.5% of the capital of a company that is listed on the Malta Stock Exchange will have the tax at source on the dividends available as a credit which may also result in a refund of tax. (Only applicable to distributions out of profits derived after 1 Jan 2017). This is an advantage on the current system whereby dividends over prescribed thresholds are exempt meaning that the underlying tax at source is not available as a credit;

Audit exemption for start-ups

Start up companies with a turnover not exceeding €80,000 may avail themselves of either an exemption from preparing audited financial statements for the first two years or do the audit and claim a 120% tax deduction (capped at €700 per annum)



  • Rental agreements covering a period of 3 months or more will need to be registered with the Inland Revenue Department;
  • COLA of €1.75 per week
  • Free public transport for all those turning 18 years during 2017;
  • New primary schools to be constructed in St Paul’s Bay, Marsascala and Victoria;
  •  Reduced stamp duty for first home buyers and a reduced stamp duty of 2% (instead of 5%) for Gozo properties during 2017;
  • Reform of the eco contribution and the removal of Eco Tax on batteries, mattresses, toiletries and plastic containers
  • Excise tax on toiletries and an increase in the same on make-up, hair products, soaps, shampoos and deodorants;
  • Property inherited after November 1992 and transferred by judicial sale wil be subject to a lower final witholding tax of 7%;
  • Reduction in tax on the transfer of a business from parents to their children from 5% to 1.5% (for one year only);