Malta Tax Deduction for Electrical Vehicles

The Government of Malta is committed to promoting sustainable and clean mobility in Malta and to address Malta’s national environmental targets which include climate change, use of energy and improvement of clean air targets.

In furtherance of this, the Government has published updated guidelines with regard to the tax deductibility of expenses of a capital nature incurred on the acquisition of new electrical or hybrid vehicles.

Companies carrying on a trade or business in Malta are allowed to claim a deduction of 150% of the cost incurred in the case of an electric vehicle and 125% of the cost incurred in the case of a hybrid vehicle.

The total deduction claimed cannot exceed €40,000 in the case of an electric vehicle and €30,000 in the case of a hybrid vehicle.

Naturally, when the above deduction is claimed, no capital allowances in respect of wear and tear are allowed. Furthermore, if a grant or other benefit was received from the Government in respect of the acquisition of an electric or hybrid vehicle, the grant will be deducted from the cost used for calculating the deduction.

Should you have any questions, do not hesitate to contact us.