Malta offers a wide range of tax incentives in 2025 that often fly under the radar – covering everything from children's sports classes to incentives for start-up investments and electric vehicles. Preparing your tax return correctly can save you significant amounts of money. We have compiled the top 10 tax benefits you should be aware of – explained simply and including all relevant links.
1. Child Sports Bonus: Up to €100 Deduction per Child
Parents paying fees for sports courses or clubs for children under 16 can deduct up to €100 annually directly from their taxable income. Receipts are sufficient; the form is available via SportMalta or online. [1]
2. Arts & Creativity: Additional €300 per Child
Since 2025, the tax authorities reward recognised dance, music, drama, or design courses with a deduction of up to €300 per child under 16 – this can be combined with the sports bonus. [2]
3. First-Time Buyer Scheme: 0% Stamp Duty on the First €200,000
Those purchasing their very first residential property by 31 December 2025 save stamp duty on the first €200,000 of the purchase price – representing a cash saving of up to €10,000. [3]
4. Second-Time Buyer Refund: Refund on the First €86,000
Even those moving from a starter home to a family home can benefit: When changing your main residence, the state refunds the Duty on Documents paid on the first €86,000, provided the application is submitted within six months. [4]
5. Low Income up to €11,620? Completely Tax-Free
The Deduction (Income from Employment) Rules 2024 (LN 1/2024) have raised the threshold at which employment income can be reduced to €0 tax via a standard deduction to €11,620 (Singles & Parents) – particularly relevant for minimum wage earners. [5]
6. Notional Interest Deduction (NID): Treating Equity Like Debt
Companies may calculate a notional interest rate on their equity and deduct it as a business expense. The result: an effective corporate tax rate significantly below 35%, without needing aggressive debt financing. [6]
7. Patent Box: Up to 95% Tax Exemption on IP Income
Under the Patent Box Regime (Deduction) Rules 2019, income from self-developed intellectual property can be up to 95% tax-exempt. With full nexus compliance, the effective tax rate can drop to as low as 1.75%. [7]
8. Micro Invest: 45% Tax Credit – Gozo Bonus 65%
Self-employed individuals and SMEs (≤ 50 employees, ≤ €10m turnover) receive a tax credit of up to 45% on eligible investments or wage costs. Businesses in Gozo, family businesses, or those with > 50% female ownership can receive up to 65%. Cap: €50,000 (or €70,000) over three years. [8]
9. Seed Investment Scheme: 35% Tax Credit for Start-up Shares
Individuals or companies investing equity in young Maltese companies for at least three years receive a tax credit of 35% up to a maximum of €750,000 per start-up. LN 45/2024 extends this rule until 2026. [5]
10. Electric Vehicles: Grant + €0 Registration Tax + 5 Years Tax-Free Driving
• 2025 Grant: Up to €8,000 grant for passenger cars (M1) with a list price up to €40,000 (or €11,000 under the 2024 scheme valid until year-end). • Tax Exemption: EVs are exempt from the annual road licence fee for five years and pay €0 registration tax. [9]
Conclusion
Whether you are a family, entrepreneur, home buyer, or car enthusiast – Malta's 2025 tax landscape offers something for everyone. A quick check with a tax advisor can really pay off. It is best to verify which bonuses you can utilise now – before your next tax return is due!
Sources
- Government of Malta – Servizz.gov: Sport Activities – Tax Deduction (WEB‑02434). servizz.gov.mt
- Arts Council Malta: Tax Deduction on Fees paid for Cultural and Creative Courses, 28 Jan 2025. artscouncilmalta.gov.mt
- Commissioner for Revenue: Guidelines on the First‑Time Buyers Exemption, Feb 2025. PDF. cfr.gov.mt
- Government of Malta – Servizz.gov: Second Time Buyer Scheme (WEB‑03892). servizz.gov.mt
- Commissioner for Revenue: Update 3 – April 2024: Overview of Recently Published Legal Notices (incl. LN 1/2024 & LN 45/2024). PDF. cfr.gov.mt
- Commissioner for Revenue: Notional Interest Deduction Guidelines, Rev. 2023. PDF. cfr.gov.mt
- Council of the EU: Malta Patent Box Regime – Harmful‑Tax‑Practices Peer Review, Doc 14114/19 ADD 1, Oct 2019 (Deduction 95%). PDF. consilium.europa.eu
- Malta Enterprise: Micro Invest 2024 Incentive Guidelines (V 1.0), Feb 2024. PDF. maltaenterprise.com
- Transport Malta: 2025 Grant Scheme for New Electric Vehicles & Pedelecs (updated 30 Apr 2025) & Electromobility Overview (accessed 5 May 2025). transport.gov.mt (2025 Scheme), transport.gov.mt (Electromobility page)
