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 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.

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.