Key takeaways derived from Malta’s 2024 budget themed “Malta Ġusta”
The Minister of Finance Mr Clyde Caruana announced the Malta 2024 Budget last night. Local energy subsidies will continue to apply, softening the blow of increased prices on the world markets and curtailing the local inflation effects of such prices.
Malta’s budget deficit for 2023 is expected to come in at 5%, reducing to 4.5% in 2024. Malta’s debt-to-GDP ratio is expected to close at 52.8% in 2023, rising to 55.3% in 2024, keeping well under the EU threshold rate of 60% and far below the Eurozone average of 91.2%. Malta will not be introducing the new minimum tax rate for companies agreed in the OECD in the foreseeable future by availing itself of a derogation of up to 6 years in the EU Minimum Tax Directive. The Pillar 2 Rules, including the Income Inclusion Rule, the Undertaxed Profit Rule and the Qualified Domestic Minimum Tax will not be introduced in 2024 and no top-up tax will be levied.
In the meantime, Malta is looking at developing incentives and other measures which conform with EU and OECD regulations to safeguard Malta’s competitiveness on an international level, although no details of any such incentives and measures were announced in the budget speech.
This means that in the short to medium term, Malta’s full imputation system of taxation will be retained.
