Malta’s Direct And Indirect Tax Framework: 2026 Updates

Malta’s tax landscape continues to develop through a series of legislative amendments introduced under the Budget Measures Implementation Act 2026, together with ongoing implementation of EU initiatives such as the VAT in the Digital Age (ViDA) package and international tax standards developed by the OECD. A number of direct and indirect tax amendments have come into effect during 2026, while businesses should also begin preparing for a broader package of VAT reforms, many of which are expected to apply from 1 January 2027.

Direct Tax Developments

The most notable direct tax measure is the introduction of a 175% tax deduction for qualifying expenditure on research, development and innovation activities, as introduced through the Budget Measures Implementation Act 2026. This enhanced deduction is intended to stimulate investment in innovation and strengthen Malta’s competitiveness as a business hub.