Malta: Tax Updates Further To Budget 2017 And The Implementation Act

Last Updated: 13 December 2017
Article by Anthony Pace
Most Read Contributor in Malta, September 2019

An overview of the changes introduced by the Budget Measures Implementation Act and a reduction in payable on donations of marketable securities and immovable property used for business purposes.

Full imputation system in relation to dividend from listed shares

Dividend income derived by individual shareholders with a holding of less than 0.5% of the paid-up share capital in a company listed on a stock exchange recognised under the Financial Markets Act, may benefit from the imputation system (with no limit) upon receipt of dividends from profits made during basis year ending 2017 or after. The limitation on the application of the imputation system will therefore be phased out with respect to dividends from companies listed on a recognised stock exchange. This amendment was most likely introduced to incentivise investment on recognised stock exchanges.

Exemption from capital gains on transfer of listed shares

The Act re-introduced an exemption from capital gains on the listing of shares on a stock exchange recognised under the Financial Markets Act. The exception in relation to listed shares was also extended to transfers of shares listed on any stock exchange.

Tax on inherited property sold through a judicial sale by auction

A Final Withholding Tax of 7% on the transfer value will apply to immovable property situated in Malta inherited on or after the 25th November 1992, where the immovable property is sold through a judicial sale by auction.

Reduced Tax rate on rental income derived from rental of immovable property under a scheme administered by the Housing Authority

A reduced Final Withholding Tax rate of 5% shall apply on rental income derived from the rental of immovable property to another person for at least 7 years under a scheme administered by the Housing Authority.

Changes to the Duty on Documents and Transfers Act

In an acquisition of property in a Special Designated Area, the 3.5% reduced rate of duty applicable on the first EUR 150,000 on acquisition of one's sole ordinary residence does not apply to buyers who would have required a permit for the purposes of the Immovable Property (Acquisition by Non-Residents) Act had the acquired property not been situated in a special designated area.

The Act introduces a widening of the tax bracket for the 3.5% reduced rate of duty applicable on transfers causa mortis in relation to a transferor's dwelling house which at the time of transfer is also occupied by the transferee/s. The 3.5% duty rate shall apply to a value which exceeds EUR 35,000 but which does not exceed EUR 150,000 (instead of EUR 70,000).

A widening of the bracket of the 3.5% reduced duty rate on transfers of dwelling houses (not being the TRANSFEROR'S dwelling house) which at time of transfer are inhabited by the transferees. This has been extended to the first EUR 150,000 (instead ofEUR 70,000) of the value of such dwelling house.

Exemption from duty upon a transfer of an undivided share of a dwelling house from the heirs of the deceased co-owner to the other co-owner, provided that the property was acquired by the co-owners for the purpose of establishing (or constructing) their sole ordinary residence, and the property in question came to the heirs of the deceased co-owner through a transfer causa mortis and the respective duty (if any) has been paid, and declarations in terms of Article 33 were made.

The Act has introduced expiration periods for determinations attained in terms of Article 47 of the Duty on Documents and Transfers Act in line with Tax Guideline issued by the Inland Revenue Department on 1st December 2016. Determinations contemplated in Article 47 are to be issued for a period of three years from date of determination. Determinations issued prior to 1st December 2016 shall be valid until 30th November 2019. Upon the lapse of such validity periods, determinations may be renewed for further periods of three years.

The Act also made some additional changes to the Article 47 to limit the applicability of the respective exemptions contemplated within the same article.

The exemptions from duty applicable to life insurance policies that are not renewable annually have been extended to annually renewable life insurance policies.

Duty on Donations of Marketable Securities and Immovable Property Used for Business

Reduction in duty from 5% to 1.5% in the case of a transfer of immovable property being a commercial tenement used in a family business for at least 3 years preceeding the transfer or marketable securities by gratuitous title (donation) from an individual to their spouse, descendants and ascendants in the direct line and their relative spouses, or in the absence of descendants to brothers or sisters and their descendants. This reduced rate of duty is applicable for transfers made by public deed between 1st April 2017 and 31st March 2018.

The law provides for a claw-back of benefits in the event that the marketable securities or business property are transferred intervivos within three years from the date of the gratuitous transfer, or if the business property is not used for business purposes for a period of three years after transfer.

In the case of business property which upon acquisition was subject to the 1.5% reduced rate of duty in terms of these rules and is so replaced within 1 year by property used for a similar purpose the 1.5% duty paid may be allowed as a deduction against duty chargeable on the acquisition of the replacement property.

Other Important Amendments

The Act contains a provision enabling the Minister to introduce rules for allowing a deduction in respect of equity financing aimed at approximating neutrality between debt and equity financing. In addition, deemed distributions provisions were introduced, in relation to profits subject to the said deduction and which are attributable to an individual resident in Malta.

An extension of an exemption previously granted solely to married women shall now also apply to married men whereby their employment income shall be exempt from tax for a period of five consecutive years of assessment provided they:

  • are over forty years of age and returning to employment after having been absent from gainful occupation for at least five years;
  • are subject to tax jointly with their spouse;
  • were not listed on the unemployment register as established by JobsPlus at any time during their absence from gainful occupation; and
  • said income does not exceed 9,500 per annum.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions