Malta 2013 Budget – Tax Highlights

On the 8^th April 2013, the new Maltese Government presented the 2013 Budget that essentially reflects the measures that had been announced by the previous Government in its budget presented in November 2012. Below are the main tax measures announced in the 2013 Budget, most of which will be effective as of 1 January 2013 –

• Tax on property transfers. The extension of the period for opting out of the 12% final tax on property/real estate transfers from 7 to 12 years. This measure comes into force on 8 April 2013. Transfers of immovable property / real estate situated in Malta is subject to a 12% flat rate tax on the value of the property (not on the gain) but the seller is entitled to 'opt-out' of the 12% flat rate tax regime and instead be taxed on the gain (if any) realised on the transfer - in such case, the gain will be taxed at the applicable progressive tax rates ranging between 0% and 35% (the highest rate of 35% will be reduced as form this year- see below).