Malta Budget 2027

Eligible workers, including self-employed individuals, working pensioners, and part-timers, to receive tax-free Super Bonus payments up to €1,000 based on 2025 earnings. Super Bonus amounts will vary from €500 to €1,000, depending on 2025 earnings.

Real economic growth of 4.7% in 2025. Economic growth rate of 4.4% in the first six months of 2026 - exceeding EU average of 1.2%. Malta’s GDP growth forecast to ease from 4.1% in 2026 to 3.8% in 2027, while unemployment falls from 3.3% to 3.2%. Estimated deficit of 2.6% for 2026 and 2027, below EU excessive deficit reference value of 3% of GDP. Projected burden of government debt expected to amount to 46.8% of the Gross Domestic Product. Government recurring expenditure to increase by €711 million. Capital expenditure expected to increase by €283 million.

0% tax bracket for married families with one child increased to €20,000 in 2027 and €22,500 in 2028. 0% tax bracket for parents with one child increased to €16,000 in 2027 and €18,000 in 2028. 0% tax bracket for married families with at least two children increased to €30,000 in 2027 and €37,000 in 2028. 0% tax bracket for parents with at least two children increased to €24,000 in 2027 and €30,000 in 2028.

Malta’s cost-of-living adjustment (COLA) is set at €6.41 per week, equivalent to €333.32 over 52 weeks. New COLA mechanism will provide annual payments of €200 – €1,500 to eligible households.

The annual tax-free pension income threshold will increase by €520 to €37,624. From 2027, spouses can transfer social security (pension) contributions under certain conditions. Final discussions are underway to establish the legal framework for Malta’s auto-enrolment pension scheme following broad agreement among social partners. Increase of €10 a week in select retirement pensions. The minimum number of years of social security contributions required to qualify for a pension will be set at 10 years for everyone, regardless of birth year, including contributions paid before the age of 18 if needed.

Despite protection against increased utility and fuel costs, inflation is forecast to rise from 2.5% in 2026 to 2.7% in 2027.

Payment of €500 per child in post-secondary education for eligible families. Carer at Home benefit for pensioners who employ a full-time carer will increase to €9,800 per year. The reduced 3.5% rate on inherited residential property will now apply to the first €400,000 instead of €200,000.

Companies with turnover below €1 million subject to tax at 25% on retained or reinvested profits, with top-up of 35% on dividend distribution.

New mandatory domestic reverse charge mechanism for construction-related supplies between businesses to combat VAT abuse. Introduction of administrative penalties of up to €500 for failures to issue correct tax invoices or fiscal receipts. New guidelines to be published on the application of the VAT exemption on food items.

The eco-contribution payable by tourists increasing to €8 per night for hotels and €10 per night for short lets.

Government commitment to keep electricity, gas and fuel prices stable, with €400 million of related subsidies and assistance.

Continuation of incentives on digitalisation, automation and value adding investment. New incentives for niche sectors.

Increase in permits and expenses to impact certain third-country nationals.

National minimum wage increases by €10.41 per week in 2027 (inclusive of COLA), maintaining existing retirement age and social security contribution rates.