Parent with one child

Married computation with 2 or more children 

Parent with 2 or more children

The applicability of the new married and parent tax rates is subject to the satisfaction of specific statutory conditions.

Married Rates

The New Married Rates with One Child and the New Married Rates with Two or More Children shall apply exclusively where the spouses are resident in Malta and at least one of the following criteria is fulfilled:

• at least one of the spouses holds Maltese nationality or is a national of another EU/EEA Member State; or
• at least one of the spouses qualifies as a long-term resident of Malta in terms of the Status of Long-Term Residents Regulations, provided that the child was born in Malta and is resident in Malta.

In cases involving an EU/EEA married couple where one spouse is not resident in Malta, the above rates may still be applicable, provided that no less than 90% of the couple’s worldwide income is derived from Malta and all other statutory conditions are met.

Parent Rates

The New Parent Rates with One Child and the New Parent Rates with Two or More Children shall apply solely where the individual is resident in Malta and satisfies one of the following conditions:

• the individual is a Maltese national or a national of another EU/EEA Member State; or
• the individual is a long-term resident of Malta in terms of the Status of Long-Term Residents Regulations, provided that the child was born in Malta and is resident in Malta.

Where the claimant is not the biological parent of the child, entitlement to the parent rates shall arise only where the claimant is married to the child’s parent (including a civil union) or has entered into a public deed of cohabitation with the child’s parent, duly registered with the Public Registry in accordance with the Cohabitation Act.

Social benefits  

• Retirement pensions will be increased by €10 per week. Pensions are also fully exempt from tax as of this year. Widowers’ pensions will increase by €3.50 per week, while widowers raising children will receive an additional €10 per week until the child reaches the age of 23.
• A €500 increase, up to a maximum of €9,000, will be granted under the scheme for elderly individuals to engage live-in carers.
• The children’s allowance for families earning less than €30,000 annually is set to increase by €250 per child.
• Social security contributions paid before the age of 18 will now be counted towards the total contribution period for the individual’s pension entitlement.

Immovable property and business transfers

• Donations between qualifying family members benefiting from a reduced stamp duty rate of 1.5% will continue to apply in 2026.
• The existing consultancy grant covering succession and governance, as well as support for training, digitalisation, and access to finance, will be extended.
• The First-Time Buyers Scheme will be incorporated permanently into law. The eligibility rules will be amended so that ownership of non-residential property will no longer render an individual ineligible. In addition, the provision of an extra €10,000 in financial assistance spread over ten years will be renewed.
• The reduced duty rate of 3.5% on inherited residential property will now apply on the first €400,000 of the property’s value, up from the previous threshold of €200,000. 

Grants

• A new measure will be introduced under the MicroInvest Scheme to further support the private sector. Through this initiative, the Government will finance wage increases for employees who have been with the same employer for more than four years.
• The funding will cover up to 65% of the wage increase for a period of two years, capped at €780 per year. For employees based in Gozo, the support will be higher — up to 80% of the increase, with a maximum of €960 per year. The maximum benefit under the MicroInvest Scheme will be increased to €65,000 in Malta and €80,000 in Gozo.
• Local enterprises will be eligible for a 60% tax credit on qualifying investments made over a four-year period.
• An extension of the Business Development Scheme has been announced to support enterprises undergoing transformation and creating specialised employment opportunities.
• The tax credits available under the Get Qualified and Higher Educational Qualifications initiatives will be retained.
• SMEs and start-ups will benefit from free access to AI, high-performance computing (HPC), and cloud services through the European Digital Innovation Hub. 

Small and Medium Companies 

• To support self-employed individuals and small businesses, the Government will cover up to 50% of the cost of purchasing industrial garages, up to a maximum of €300,000.
• A new SME complex will also be developed in Ħal Far.
• Additionally, work is underway to establish modern facilities for health, pharmaceutical, light industry, and marine biotechnology enterprises, with the objective of creating a value chain that connects local innovation to international markets. 

Land Reclamation

• The government is preparing to launch a large-scale land reclamation project beyond the Freeport area to support industrial and maritime activities and relocate commercial operations, highlighting the importance of boldness and determination in undertaking such ambitious initiatives. 

Digitilisation

• Malta will invest €100 million in digitalisation and the adoption of technologies such as AI, the Internet of Things, cybersecurity, augmented and virtual reality (AR/VR), blockchain, and robotics. Funding will be provided through Malta Enterprise schemes, the Malta Digital Innovation Authority, EU funds, and other government agencies, with the aim of reducing manual processes, enhancing efficiency, and boosting competitiveness. 

Free Zone and Logistics

• The government has announced that it is considering inviting international bids to establish a new free-zone logistics hub near the airport, potentially connected directly to the Freeport, to enhance supply chain efficiency and attract significant maritime and aviation activities. 

Maritime and Aviation

• The Government announced the establishment of a National Aviation Academy, in collaboration with private operators, to provide specialised, practical, and accredited training aimed at creating high-value career opportunities.
• Malta will continue to uphold high standards in its shipping sector, maintaining its position as the sixth-largest flag state globally, the largest in Europe, and the leading superyacht registry. In the aviation sector, the country aims to further expand its aircraft registry beyond the current 930 planes by 2026.

iGaming

• The Minister reaffirmed that the gaming industry remains a key pillar of the Maltese economy, contributing approximately 8% to GDP, and emphasised the government’s commitment to supporting sustainable growth through enhanced protective measures. Malta will review the regulatory framework for the gaming sector, with particular attention to improvements in the VAT system. 
• Additionally, the agreement with Unity will be extended to offer individuals opportunities to specialise in game production, immersive technologies, simulation and animation, as well as AR/VR. 

Technology

• The government announced plans to make AI accessible to everyone by offering free courses, national certifications, hands-on sessions, and complimentary subscriptions to AI services, with the initiative set to launch early next year.
• A digital identity wallet will also be introduced to reduce bureaucracy and enable faster, more efficient processes. 

Other Matters Including Tourism

• The eco-contribution per tourist per day to increase from €0.50 to €1.50. 
• The government announced a commitment of €1 million to support Special Olympics Malta in providing additional services and enhancing the personal development of its athletes. 
• Student stipends will increase by 15% next year. 

Contact us

The 2026 Budget introduces several measures that may have a direct impact on businesses, investors, and individuals, particularly in areas such as taxation, property transfers, investment incentives, and regulatory developments. Understanding these changes early can provide a strategic advantage and help optimise tax and business planning. Our team at CSB Group can provide tailored advice and support to help you assess the implications of these measures on your personal or corporate structure.

Contact us today at [email protected] to schedule a consultation with one of our specialists and ensure you are well positioned to benefit from the new opportunities introduced in this year’s Budget.

About the Author

This article has been authored by Gabriele Andreone - Senior Tax Advisor and Niall Saliba - Tax Officer.