Malta's Pensions Tax Exemption Rules

Introduced through Legal Notice 98 of 2022 and later amended by Legal Notices 220 of 2022, 48 of 2023 and 5 of 2024 the Pensions (Tax Exemption) Rules applied to pension income derived on or after 1 January 2022. These rules provide partial or full exemption from tax on pension income for individuals who were at least sixty-one (61) years old in the year in which the pension income was received. The amendments included the introduction of a definition of pension income and a cap on the amounts exempt. This exemption begins at 20% of pension income derived in 2022 and increases annually to the final 100% in subsequent years, subject to capped amounts determined by future budgets. The Pensions (Tax Exemption) Rules in Malta have undergone significant changes since their introduction, with the aim of enhancing the tax benefits associated with pension schemes.