Malta: Budget law enacted including direct and indirect tax amendments
Income tax and VAT amendments
Malta's Parliament enacted the Budget Measures Implementation Act, 2025, following the October 2024 budget speech (read TaxNewsFlash), amending the laws concerning income tax, duty on documents and transfers, value added tax (VAT), and social security.
Key changes include:
- Tax deductions for capital expenditures incurred after January 1, 2025, on business permits, concessions and commercial leases used for income production
- Adjusted progressive tax rates for individuals for basis year 2025 resulting in a widening of the tax bands
- Increased personal tax deductions for children's school fees effective from basis year 2025
- Optional taxation of 7.5% on income from artistic activities chargeable on net income rather than gross income
- Introduction of a provision enabling the Minister of Finance to make regulations for an elective basis of taxation on profits of Malta entities
Read an August 2025 report prepared by the KPMG member firm in Malta
For more information, contact a KPMG tax professional in Malta:
Anthony Pace | anthonypace@kpmg.com.mt