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Budget 2027 Highlights

BUSINESSES​

  • Corporate tax for SME not earning more than €1m turnover shall reduce
    to 25%, subject that no dividends are distributed. In case of distributions,
    the corporate tax shall be 35%.

  • New clearer rules will be issued on VAT exemptions on food to create a level playing field for all businesses selling food.

  • Businesses who fail to issue vat receipts will be given fines, and if paid within 30 days there will not be criminal proceedings. Penalties will be €100 for a first offence, €200 for a second, €400 for a third, and €500 for further offences within 24 months.
     

TOURISM

  • From 1st January 2027. The eco-contribution will rise from €1.50 to €8 per tourist per night, capped at , capped at €64 per person if you stay at a hotel and €10 if you stay in an Airbnb or similar rental, capped at €80 per person.  Eco-contribution to be removed for students who come to Malta to study English.

  • Fares to visit Gozo for tourists shall increase to €10.50 for the fast ferry, Gozo channel €11 per passenger and €22 for vehicle and driver.

  • Talks continue to find a strategic partner for KM airlines.

  • Tourists visiting Comino shall pay a fee of €5.  The fee does not apply for residents.

  • Cruise liner tourists shall pay a fee of €10 per person.  The fee will not apply to cruise liner passengers who board their cruise in Malta. 

  • Incentives for airlines will be reviewed in the coming months to attract more tourists in shoulder and winter months.

 

EMPLOYMENT/PERSONAL TAX

  • Income tax brackets to be widened, as proposed in the budget of 2026, for families having children as follows:

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  • For 2026, the cost of living allowance shall be €6.41 per week and shall be given to all employees.   The minimum wage shall increase by €10.41 including the COLA adjustment.

  • Married couples shall be default be required to file individual tax returns.  Couples wishing to file tax returns together will need to opt in.

  • The tax-free super bonus of €1,000 will be paid to all working Maltese, EU and long-term residents, subject that they had €12,000 annual income in 2025.  Those earning less will paid a pro-rata of the bonus.

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Image by Remi Yuan

PROPERTY RELATED MEASURES

  • Government to strengthen valuation procedures on sale of airspaces, to avoid tax avoidance.

  • Schemes for first time buyers, second time buyers, restoration and UCA qualifying properties have been retained.

  • New VAT rules for the construction industry, whereby under the new mechanism the government will shift VAT obligations from the suppliers to buying businesses.

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FAMILY/SOCIAL MEASURES

  • Energy subsidies to stay and shall cost the Malta economy close to €400m.  Each household with 2 cars shall save between electricity and fuel around €2,000 per year.

  • As of next year, every pensioner will get a fixed €21.53 weekly payment, irrespective of when they retired.

  • Spouses will be able to transfer contributions to a spouse without one.  More details to come out in the next days.

  • The adoption grant shall increase to €13,000. 

  • Carer grant for non-working parents of children with severe disabilities to be increased to €7,500.

  • Licences for pleasure boats to increase by €300 for yachts measuring between 10 to 12m, €2,600 for yachts of 21-24m.

  • 10 days sports leave to be given to international athletes, trainers and medics.

  • Non-taxable income from pensions to cover income up to from pensions to cover income up to €37,624.

  • Disability therapies will be free for children aged under 18.  Disability aid payments will rise by €9.37 a week. Other disability allowances will rise by €6.41 a week.

  • The government shall cover up to 2 years contributory pension if you take time off due to mental illness or domestic violence.

  • Carers grant for senior citizens to increase to increase to €9,800.

  • Foster parents who work shall be given an additional 10 days in annual leave.

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THIRD COUNTRY NATIONALS (TCN)​

  • Third country residents, who are not long term residents shall from 1st January 2027 pay €33 per month to use public transport.

  • Non-EU drivers are to be charged a monthly €83 fee to keep their category B or B1 licence, except for those TCNs having specific jobs involving driving. 

  • TCNs will need to start paying an annual infrastructure contribution of €400 per year.  Work permit application fee for new workersto increase to €800.  Other identita permit fees also to be revised.

  • TCNs who are not long term residents shall not be entitled to free childcare.

 

CAPITAL INVESTMENT

  • Various infrastructure projects planned, amongst them:

    • Expanding Mater Dei emergency department

    • A mental health hospital at Mater Dei

    • Expanding Gozo General Hospital

    • Regenerating Karen Grech and St. Luke’s hospitals

    • More resources shall be allocated for Culture, agriculture and the environment.

  • There will be a number of projects to enhance the energy infrastructure and distribution, namely:

    • Under sea cables between Malta and Gozo

    • €75m allocated to enchance energy distribution

    • Technical studies to consider a third interconnector with Italy

    • Studies on floating offshore farms.

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