Malta Budget 2027: Key Highlights for Employers, Businesses & Individuals
The Minister for Finance presented Malta Budget 2027 on 26 October 2026. We've summarised the main announcements below and grouped them by who they affect, so you can go straight to the sections that apply to you or your business.
This overview begins with the economic outlook, then considers employers, business taxation, industry measures and support for individuals and families. Each section brings together the announcements relevant to that audience.
Malta Budget 2027 at a Glance
No increases in income tax, VAT or social security contribution rates. | Retirement age remains unchanged. | COLA of €6.41 per week for 2027. |
Forecast real GDP growth of 3.8% in 2027. | A forecast deficit of 2.6% of GDP. | About €400 million to maintain stable energy and fuel prices. |
Economic Outlook
The economic forecasts provide the context for the measures set out below. Real GDP growth is forecast at 3.8% in 2027, with unemployment at about 3.2% and inflation at about 2.7%.
The deficit is forecast at 2.6% of GDP, with public debt at about 46.8% of GDP. About €400 million is set aside to maintain stable energy and fuel prices.
Employers & Payroll
COLA and Minimum Wage
COLA: €6.41 per week (about €333 a year) is added to wages from January 2027.
National minimum wage: up €10.41 per week, COLA included. Minimum wage earners still pay no income tax.
The Low Pay Commission will be reappointed to recommend the 2028 minimum wage.
Action for employers: update payroll rates and employment contracts for January 2027.
Super Bonus for Workers
A one-off, tax-free bonus of up to €1,000, paid in Q1 2027.
Based on 2025 income: €12,000 or more receives €1,000. Lower incomes receive between €500 and €925, depending on the band.
Employees, self-employed, part-time workers and working pensioners all qualify. Eligibility conditions are still to be confirmed.
Third-Country National (Non-EU) Employees
Work permit application fee: up from €600 to €800.
New annual infrastructure contribution: €400 a year on new permits and on renewals. Under-18s are exempt.
A new application will therefore cost about €1,200. Other Identità permit fees are also being revised.
From January 2027, free public transport, free childcare and the atypical in-work benefit will be limited to Maltese citizens, EU citizens resident in Malta and long-term residents. Children already in childcare keep their place.
Non-EU driving licences will be valid for 12 months from arrival only. After that, a Maltese or EU licence is needed. An €83 monthly administrative fee applies to certain Category B/B1 licences issued or renewed, with exemptions including EU/EEA nationals, long-term residents and their spouses, UK, Australian and UAE citizens, and some professional drivers.
Action for employers: budget for higher recruitment and renewal costs for non-EU staff, and let affected employees know about the transport, childcare and licence changes.
Leave and Social Security Credits
Sports leave: elite athletes representing Malta at European or World Championships, and their technical and medical staff, get 10 days of paid sports leave.
Foster parents: 10 extra days of government-funded leave when a child is placed with them.
Social security credits: up to 2 years of credits for employees who take time off because of mental health problems or domestic violence.
Business & Corporate Tax
Lower Tax on Reinvested Profits for Smaller Companies
Companies with a turnover of up to €1 million will pay 25% instead of 35% on profits they keep in the business or reinvest.
Profits paid out as dividends are still taxed at 35% overall, through a top-up when distributed.
For example, €100,000 of retained profit would be taxed at €25,000 rather than €35,000.
Conditions and the start date are still to be published. This will need to be weighed against existing reliefs such as Micro Invest, Notional Interest Deduction and the 15% elective final tax.
VAT: Invoices and Fiscal Receipts
Issuing incorrect VAT invoices or fiscal receipts will lead to administrative penalties rather than going straight to criminal proceedings.
Penalties within a 24-month period: €100 (1st breach), €200 (2nd), €400 (3rd), €500 (4th and after).
Paying within 30 days extinguishes the criminal liability for that breach. Breaches still raise your risk score, which makes a tax audit more likely.
Separate Tax Returns for Spouses
A project will start to make separate (individual) tax returns the default for married couples. Joint returns stay available by election.
Business Support
Malta Enterprise will continue its incentives for digitalisation, automation and high value-added investment, plus new measures for niche and diversification sectors.
Existing schemes for EVs, renewable energy, NGOs and sports organisations are renewed for 2027.
Industry Measures
Construction & Property
VAT reverse charge for construction: for certain construction services between businesses, the customer, not the supplier, will account for VAT. The scope and start date are still to be announced. Contractors will need to update their invoicing and VAT return procedures.
Air space transfers: stricter rules requiring disclosure of the full consideration, stronger valuations and checks, and tax based on economic substance. These also cover intermediaries and developers not named in the deed.
Property schemes: existing housing, property acquisition and renovation schemes are renewed for 2027. No new duty reliefs were announced.
Tourism & Hospitality
Eco-contribution from 1 January 2027 (guests over 18): hotels and collective accommodation €8 per night (was €1.50), capped at €64 per person (was €22.50). Short-let accommodation €10 per night, capped at €80 per person. Accommodation run by English language schools is exempt.
Cruise passengers: €10 for passengers who disembark and re-board the same ship in Malta. Cruises starting in Malta are excluded.
Comino: a €5 eco-contribution added through the Blue Lagoon booking system.
Ferries: fast ferry fares for tourists up €3 per trip. Gozo Channel fares for non-residents go up, e.g. adult €4.65 → €11.00, vehicle and driver €15.70 → €22.00.
Airlines: incentives will be reviewed to boost shoulder and winter months. A strategic partner is being sought for KM Malta Airlines.
Action for operators: update booking systems, rates and guest communications before 1 January 2027. Short-let owners should check their pricing and platform settings.
Retail, Food & Catering
The tax authorities will publish guidelines on the VAT exemption for food, especially ready-to-eat food sold by supermarkets and convenience stores. Retailers should review how these items are treated once the guidance is out.
The new VAT invoice and fiscal receipt penalties (above) are especially relevant for retail and hospitality.
Financial Services, Fintech & Digital
The regulator and the Malta Financial Services Advisory Council will keep improving the framework to attract investment.
Growth areas named: family offices, crypto-asset businesses, fintech and aircraft leasing. No specific tax figures were announced.
Maritime & Yachting
Higher annual registration fees for vessels of 10 to 24 metres.
Professional fishermen, vessels under 10 metres and vessels of 24 metres and over are exempt.
Energy & Infrastructure
About €75 million for the electricity distribution network in 2027.
A second interconnector to Sicily, new Malta–Gozo cables, and studies on a third interconnector and a 300MW offshore wind farm.
Target of 25% renewable energy by 2030 (18.8% in 2025). Grants for EVs and renewable energy are renewed.
Ongoing works include Msida Creek, Pinto 4 and 5, Lascaris and Grand Harbour shore supply (by end-2028).
Manufacturing, Gaming & Other Sectors
No sector-specific measures were announced for manufacturing, iGaming, agriculture or fisheries (other than the vessel fee exemption).
These businesses can still benefit from the 25% rate on reinvested profits (if eligible) and from Malta Enterprise incentives.
Individuals & Families
Lower Tax for Parents
The family tax cut continues, with higher tax-free thresholds in 2027 and again in 2028. Tax-free income for each type of household:
Married, 1 child: €20,000 in 2027 (€22,500 in 2028). 15% up to €30,000, 25% up to €60,000, 35% above.
Married, 2+ children: €30,000 in 2027 (€37,000 in 2028). 15% up to €41,000, 25% up to €60,000, 35% above.
Parent, 1 child: €16,000 in 2027 (€18,000 in 2028). 15% up to €24,500, 25% up to €60,000, 35% above.
Parent, 2+ children: €24,000 in 2027 (€30,000 in 2028). 15% up to €33,500, 25% up to €60,000, 35% above.
Children qualify if under 18, or under 23 if in full-time education. Maximum savings in 2027 range from about €1,150 to €4,050 depending on the household.
Family Support
Post-secondary students: €500 per child continues in the first half of 2027.
Additional COLA: €200 to €1,500 a year for over 100,000 low and middle-income households, depending on income and household size.
Carers' Grant: up to €7,500 a year for parents who cannot work because of a child's severe disability.
Carer at Home: up €800 to €9,800 a year.
Adoption from abroad: reimbursement up €1,000 to €13,000.
Children with disability: the Government will cover therapy costs for under-18s.
Orphans' allowance: extended to age 25 for those in tertiary education (€170 per week).
Pensioners
Pensions rise by €10 per week (COLA included) from January 2027.
Tax-free pension income threshold up €520 to €37,624 a year.
Cost of living bonus standardised at €21.53 per week for all pensioners.
Maximum pensionable income for those born before 1962 raised to €28,000.
Widows and widowers move towards receiving the full pension (more than 7,000 people benefit).
Service pension disregard up to €300 a year. The full commuted amount is disregarded from age 72.
From 2027, social security contributions can be transferred between spouses in certain cases.
Key Dates
1 January 2027: COLA, minimum wage and pension increases. New eco-contribution rates. Eligibility changes for free transport and childcare.
Q1 2027: Super Bonus paid.
2027 tax year: new parent tax bands. Higher work permit fees (expected).
Date to be confirmed: 25% rate on reinvested profits, construction VAT reverse charge, VAT penalty regime, air space rules and separate spousal returns.
How BGMT Can Help
Many of these measures still need legislation or official guidelines before they take effect, and some details may change. If you'd like to know how Budget 2027 affects your payroll, your company's tax or your personal tax position, get in touch with us today!
Read the full budget speech here:
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