November Tax News

𝐋𝐨𝐜𝐚𝐥 𝐓𝐚𝐱 𝐔𝐩𝐝𝐚𝐭𝐞𝐬

1. Amendments to Excise Duty on Beer under Malta’s Excise Duty Act

The Commissioner for Tax and Customs has announced the release of a new important notice to economic operators for beer. Effective 1st January 2025, the new amendments transition from a "degree Plato" system to an alcohol by volume percentage (ABV%) calculation for excise duties. This change will simplify compliance and improve accuracy in duty declarations, while ensuring that excise duties align with the alcohol content, with minimal financial impact for businesses, particularly those producing lower-strength beer.



2. Changes to the Malta Permanent Residence Programme (MPRP)

As enacted on 19 November 2024 with Legal Notice 310 of 2024, the following changes will come into force from 1 January 2025:

𝐸𝑙𝑖𝑔𝑖𝑏𝑖𝑙𝑖𝑡𝑦 𝐶𝑟𝑖𝑡𝑒𝑟𝑖𝑎:

▪️A limitation in the age of an adult child of the Main Applicant or of his spouse to be eligible as a dependant has been included, therefore at the time of application such adult child will need to be over 18 years of age, but not yet attained 29 years of age, not married and principally dependent on the Main Applicant.

▪️An increase in the value of financial assets held by the Main Applicant, which means that the Main Applicant shall now present evidence of possession of assets either:

- having a value of not less than €500,000 out of which a minimum of €150,000 shall be in the form of financial assets; or

- having a value of not less than €650,000, out of which a minimum of €75,000 shall be in the form of financial assets.

𝐴𝑑𝑚𝑖𝑛𝑖𝑠𝑡𝑟𝑎𝑡𝑖𝑜𝑛 𝐹𝑒𝑒𝑠:

▪️Main Applicant: A non-refundable administration fee of €50,000 applies, €15,000 of which need to be paid within one (1) month from submission of application; with the remaining €35,000 payable within two (2) months from the issuance of a Letter of Approval in Principle (up to 31st December 2024, a non-refundable administration fee of €40,000 applies).

▪️Dependants: A fee of €10,000 for each dependant applies, €5,000 of which is a non-refundable administration fee, payable for every dependant within two (2) months from the issuance of the Letter of Approval in Principle. The remaining €5,000 contribution is paid within eight (8) months from the issuance of such Letter. Up to 31 December 2024, there was only a contribution of €7,500 for each additional parent or grandparent of the Main Applicant and/or spouse.

𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑠 :

▪️A contribution of €30,000 (€28,000 up to 31 December 2024) in respect of the Main Applicant who opts for a qualifying owned property; or

▪️A contribution of €60,000 (€58,000 up to 31 December 2024) in respect of the Main Applicant who opts for a qualifying rented property; paid within eight (8) months from the issuance of a Letter of Approval in Principle.

𝑄𝑢𝑎𝑙𝑖𝑓𝑦𝑖𝑛𝑔 𝑃𝑟𝑜𝑝𝑒𝑟𝑡𝑦:

The definitions of qualifying owned or rented property have been amended as follows:

▪️A qualifying owned property must be purchased at a minimum value of €375,000 in Malta or in Gozo (up to 31 December 2024, €300,000 in the South of Malta or in Gozo, or €350,000 in the rest of Malta).

▪️A qualifying rented property must be leased at a minimum annual rent of €14,000 in Malta or in Gozo (up to 31st December 2024, €10,000 in the South of Malta or in Gozo, or €12,000 in the rest of Malta).



3. Extension of applicability of duty exemptions and certain Tax Credits

Legal Notice 325 of 2024 has extended the periods of applicability, by another year, of the following measures:

▪️The First Time-Buyers Scheme has been extended to apply to acquisitions taking place before 01 January 2026 (the first €200,000 are exempt from duty).

▪️Transfers by donation of marketable securities and immovable property being a commercial tenement to related parties has been extended to apply to transfers made before 01 January 2026 (reduced rate of duty of €1.50 on every €100).

▪️Acquisition of a residential immovable property, acquired within twelve (12) months of the transfer of the original residential property, has been extended to acquisitions made before 31 December 2025 (refund of duty paid on the first €86,000).

Legal Notice 324 of 2024 has extended by another year the Micro Invest Scheme (for costs incurred up to 31 December 2025).

Legal Notice 323 of 2024 has extended by one year the applicability of the Get Qualified Scheme (students following courses approved by the Malta Enterprise can apply for tax credits on the fees paid).





𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐓𝐚𝐱 𝐔𝐩𝐝𝐚𝐭𝐞𝐬

1. EU Member States reach agreement on the ViDA package

On November 5, 2024, the Economic and Financial Affairs Council (‘ECOFIN’) reached unanimous agreement on the "VAT in the Digital Age" (‘ViDA’) package. This initiative aims to modernise and enhance the EU VAT system, aligning it with the digital economy and bolstering measures to combat tax fraud.

The ViDA package introduces reforms across three key areas:

▪️E-invoicing and Digital Reporting Requirements (‘DRR’): Establishing standardised digital reporting and e-invoicing for intra-community transactions between Member States.

▪️Platform Economy Reforms: Addressing VAT challenges in the platform economy, particularly for short-term accommodation rentals and passenger transport, by strengthening the role of digital platforms in VAT collection.

▪️Single VAT Registration: Simplifying VAT compliance by extending the scope of the One-Stop Shop (‘OSS’) for imports and applying the reverse charge mechanism to business-to-business (‘B2B’) transactions.

These changes will significantly reshape the VAT landscape, impacting most businesses operating within the EU. Organisations are advised to evaluate the implications of ViDA on their operations and update their systems and processes well ahead of the new rules' implementation, which are expected to be gradually implemented from 2027 to 2035.