Malta: Tax measures in 2023 budget implementation law

The bill is based on the 2023 budget presented in October 2022.

The bill is based on the 2023 budget presented in October 2022.

Bill No. 24, the 2023 budget implementation law, was enacted on 4 April 2023.

The bill, which is based on the 2023 budget presented in October 2022 (read TaxNewsFlash), includes amendments to the Income Tax Act, the Income Tax Management Act, and the Value Added Tax (VAT) Act.

Amendments to the Income Tax Act and Income Tax Management Act

  • The tax deduction currently available to parents paying fees for sporting, cultural and creative courses for their children is increased from €100 to €300 per child, effective for year of assessment 2024.
  • The rate of final tax on the gross amount of royalties received by authors and co-authors of qualifying literary works is reduced from 15% to 7.5%, effective for royalties derived on or after 1 January 2023.
  • Article 27A of the Income Tax Act, which empowers the Minister to make rules on the tax treatment of companies and other bodies/persons concerning, mergers, divisions, transfers of assets between companies and exchange of shares concerning companies, is broadened to include transfers between a company and a person who is related to it in such manner as may be prescribed.
  • The provisional 7% tax payable upon a transfer of securities or a transfer of value in securities will also apply on a transfer of a full or partial interest in a partnership and on a deemed transfer of an interest in a partnership.  
  • The 14-day statutory period allowed for the tax authority to pay tax refunds is extended by 12 months when the tax authority requires further verifications for due diligence purposes.

Amendments to the Value Added Tax Act

  • The penalties for failure to submit recapitulative statements is increased from €10 to €50 for every month or part thereof, and the maximum penalty for each recapitulative statement is increased from €120 to €600.
  • New article 55A empowers the Minister to prescribe requirements for any person to retain and furnish the tax authority such information as may be required in order to achieve the objective of combating VAT fraud.

Read an April 2023 report prepared by the KPMG member firm in Malta



The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.