Since year of assessment 2023, the Government has gradually been exempting from tax, pension income derived by an individual on or after 1st January 2022 as per below so that by year of assessment 2027, all pension income will be exempt from tax. By means of Legal Notice 5 of 2024, the capping for years of assessment 2025 onwards has been increased as per below table.
| Year of assessment Exempt amount |
| 2023 20% capped up to €2,864 |
| 2024 40% capped up to €5,987 |
| 2025 60% capped up to €9,732 (increased from €8,981) |
| 2026 80% capped up to €12,976 (increased from €11,974) |
| 2027 and subsequent years 100% capped up to €16,220 (increased from €14,968) |
This follows what has been announced in the budget speech for the year 2022 that pension income received by an individual who is at least 61 years of age will be partially exempt, gradually rising to full exemption by the year 2026. The exempt portion shall be omitted from the individual’s tax calculation.
If you need any help or assistance with the above-mentioned, please do not hesitate to contact us on infoact.com.mt