Malta: Tax measures in 2027 budget
Individual, business, and indirect tax proposals
October 26, 2026
The 2027 budget introduces tax-related proposals aimed at supporting families, businesses, and economic growth. Key tax provisions include:
Individual (personal) tax
- The three-year reduction in income tax for families with children announced in the previous budget will continue in 2027. The tax-free thresholds will increase to €20,000 under the married computation with one child and €30,000 with two or more children; the corresponding parent-computation thresholds will increase to €16,000 and €24,000 for one child and two children, respectively.
Business tax
- A new framework will offer companies with turnover not exceeding €1 million a 25% tax rate on retained or reinvested profits, subject to conditions and limitations in the implementing rules. Profits distributed as dividends will remain taxed at 35%.
- Malta Enterprise will continue its enterprise and industry support schemes, including incentives for digitalization, automation, higher-value investment, and diversification.
Indirect tax
- Guidelines are being developed to clarify the VAT exemption on food, particularly ready-to-eat retail food.
- A new administrative penalty system for incorrect invoices and fiscal receipts will be introduced: €100 for the first failure, €200 for the second, €400 for the third, and €500 for the fourth and subsequent failures within 24 months. Payment within 30 days would eliminate the liability associated with the failure covered by the penalty.
Read an October 2026 report prepared by the KPMG member firm in Malta