This article presents some of the salient points from this year’s Malta Budget that are connected to the services provided by Joe Cordina & Associates. It focuses on selected measures relating to taxation, VAT compliance, employment, social security and business incentives.
For the complete details, readers are encouraged to consult the full Budget document published by the Government of Malta.
Measures Affecting Third-Country Nationals
Several announced measures concern third-country nationals residing and working in Malta mainly;
- Work permit fees: An increase from €600 to €800 for new applications.
- Annual permit charge: A new annual fee of €400 for applications and renewals.
- The €800 amount is described as the fee for a new work permit application, while the separate €400 amount is described as an annual charge associated with applications and renewals. As the exact interaction between these charges is not yet clear from the information supplied, employers and applicants should confirm the payable amounts and circumstances with the relevant authorities before applying or renewing.
- In-Work Benefit: Exclusion of third-country nationals from the €150 benefit relating to atypical working hours.
Workers and Employment
There are also other new measures concerning public transport, child-care facilities and driving licenses where either the existing cost increased or it will no longer free as from 1 January 2027. There are exceptions for a few categories of employment and for those who obtained permanent residency status. The Budget includes measures intended to support workers, improve household income and provide assistance to lower-income families.
Super Bonus: How Much Will You Receive?
The Super Bonus provides a non-taxable payment to eligible workers based on their employment income. Workers whose employment income was €12,000 or more will receive a payment of €1,000, while those who earned less will receive a payment according to the applicable income band.
According to the budget highlights supplied, the bonus amount is based on employment income for 2025. The payment is described as non-taxable, subject to confirmation of the final eligibility rules and the income calculation used by the authorities.
The following table outlines the bonus amounts provided in the available information.
The figures below are presented on the basis that the relevant employment income is for 2025, as indicated in the supplied budget highlights.
| Annual Employment Income | Super Bonus |
|---|---|
| €12,000 or more | €1,000 |
| €11,000–€11,999 | €925 |
| €10,000–€10,999 | €875 |
| €9,000–€9,999 | €800 |
| €8,000–€8,999 | €725 |
| €7,000–€7,999 | €650 |
| €6,000–€6,999 | €575 |
| €2,000–€5,999 | €500 |
The amount payable depends on the relevant employment income band and the applicable eligibility conditions. Workers should consult the official guidelines to confirm the qualifying income period, eligibility requirements and payment arrangements.
Cost-of-Living Adjustment (COLA)
The Budget information provided indicates a weekly COLA increase of €6.41. COLA adjustments are intended to help workers manage changes in the cost of living. Employees and employers should consult official guidance for confirmation of the applicable increase and its implementation.
COLA Plus
COLA Plus is intended to provide additional financial support to eligible lower-income families. The amounts outlined range from €200 to €1,500 annually, depending on the applicable criteria and household circumstances.
Minimum Wage
A weekly minimum wage increase of €10.41, including COLA, has been highlighted. Employers should verify the applicable minimum wage rates and effective dates to ensure that payroll calculations comply with the relevant requirements.
Taxation and Business Measures
Separate Income Tax Returns for Spouses
A proposed change would allow spouses to submit separate income tax returns, while retaining the option to choose joint filing. The detailed conditions, election process and effective date should be confirmed once official guidance and legislation are available.
Corporate Taxation
A proposed reduction in the corporate tax burden from 35% to 25% on retained earnings for companies with turnover of up to €1 million has been highlighted. Companies should carefully review the applicable conditions, including the qualifying criteria, treatment of retained profits and any restrictions or obligations associated with the proposed regime. The final tax treatment will depend on the relevant legislation and implementing rules.
The measure has also been described in the supplied highlights as a proposed 25% tax rate for qualifying small businesses on retained or reinvested profits. This description should be treated as provisional until the final regime confirms which profits qualify, how turnover is calculated and what conditions apply.
VAT Compliance and Fiscal Receipts
The announced measures include fines ranging from €100 to €500 for failure to issue fiscal receipts. The information provided also indicates that prosecution may be avoidable through payment within 30 days, subject to the applicable rules. Businesses should continue to ensure that their VAT obligations and fiscal receipt requirements are met. Maintaining appropriate records and complying with filing and payment deadlines remain essential to avoiding unnecessary penalties.
Businesses should consult the relevant official guidance to confirm the circumstances in which the penalties apply and whether payment within the specified period affects prosecution.
The budget highlights also refer more broadly to new measures aimed at combating VAT evasion. As the specific mechanisms were not detailed in the information supplied, businesses should monitor official announcements for any additional compliance requirements, enforcement measures or changes to reporting and record-keeping obligations.
€100 Million for Businesses and Artificial Intelligence
A €100 million package of incentives for businesses and AI has also been highlighted. The initiative aims to encourage business development, technological investment and innovation. Depending on the final scheme conditions, eligible businesses may have opportunities to invest in digitalisation, improve productivity and adopt AI-related solutions.
Businesses should monitor official announcements for details on eligible expenditure, application procedures, deadlines and qualifying criteria.
Families and Tax Relief
Further Tax Cuts for Parents
A further tax reduction for parents has been announced, with the savings expected to double in 2027 and benefit approximately 68,000 parents. The actual benefit will depend on the applicable tax bands, family circumstances and implementation rules.
The supplied highlights also state that the three-year personal income tax reduction for families will continue in 2027. Eligible families should check the official rules to establish how the continuation interacts with the further reduction for parents and their individual circumstances.
Elderly People and Pensioners
- Pension increase: A weekly increase of €10, including COLA.
- Pensionable income ceiling: An increase to €28,000 for individuals born before 1962.
- Tax-free pension income: An increase to €37,624 annually.
- Disciplined forces: An increase of €520 in the annual pension bonus.
- Widows’ pensions: Full entitlement to the deceased spouse’s pension.
- Social security contributions: The possibility of transferring surplus contributions between spouses.
- Insufficient contributions: An increase of €333.32 in the relevant bonus.
- Carer at Home Grant: An increase to €9,800 annually.
These measures aim to improve pension income and provide additional assistance to eligible elderly people and their carers. Individuals approaching retirement or already receiving pension benefits should consult the relevant authorities to understand how any changes may apply.
Tourism and Eco-Contributions
- Hotel eco-tax: €8 per person per night, capped at €64.
- Short-let eco-tax: €10 per person per night, capped at €80.
- Cruise passengers: A €10 eco-tax for passengers disembarking in Malta.
Accommodation providers and relevant tourism businesses should review the final eco-contribution rules, including the rates, caps, collection requirements and effective dates, and ensure that any applicable amounts are correctly accounted for.
Disclaimer: This article provides a general overview based on the budget information supplied. The measures, figures, eligibility requirements, income reference periods and implementation dates have not been independently verified. In particular, details concerning spouse tax returns, VAT-evasion measures, work-permit charges, the proposed corporate tax regime and eco-contribution changes should be checked against official publications. Announced proposals should not be treated as enacted law unless confirmed by the relevant official sources. Readers should consult the applicable legislation and government guidance before taking action.
