Malta Budget 2027

The Malta Budget 2027 was announced on Monday, 26 October 2026, by Finance Minister Clyde Caruana during a speech in Parliament. The Budget outlines the government’s fiscal priorities for the coming year, with a focus on supporting families and pensioners, reducing taxation for smaller businesses, strengthening public services and investing in Malta’s infrastructure and economic development.

Malta’s economy is forecast to grow by 4.1% in 2026 and 3.8% in 2027, supported by domestic consumption, investment and exports. Unemployment is expected to remain low at 3.2% in 2027, while inflation is projected at 2.7%. The government has also committed approximately €400 million to maintaining energy and fuel subsidies, alongside continued investment in infrastructure and public services.

The key measures of the 2027 Budget are summarised below.

Malta Budget 2027 Overview

Support Measures	Detail
Social Measures	Cost-of-Living Adjustment (COLA) increased by €6.41 per week, equivalent to €333.32 annually. National minimum wage to increase by €10.41 per week, inclusive of COLA. Additional COLA payments of between €200 and €1,500 annually for eligible low- and middle-income households. Introduction of a tax-free Super Bonus of up to €1,000 for eligible workers, including self-employed individuals, part-time workers and working pensioners, based on 2025 earnings. Continued government subsidies for electricity, gas and fuel, with approximately €400 million allocated for 2027. Expansion of Mater Dei Hospital's Emergency Department, doubling capacity from 35 to 70 treatment spaces. Development of a new 135-bed mental health facility and continued investment in Gozo General Hospital. Government to cover the travel costs of a person accompanying an adult patient receiving medical treatment abroad.
Pensions & Allowances	Weekly pension increase of €10, inclusive of COLA, from January 2027. Annual tax-free pension income threshold increased by €520 to €37,624. Maximum Pensionable Income for pensioners born before 1962 increased from €25,500 to €28,000. Introduction of provisions allowing the transfer of social security contributions between spouses under specified conditions. Annual bonus for individuals without sufficient social security contributions to qualify for a pension increased by €333.32. Carer at Home Scheme increased by €800 to €9,800 annually. Carers' Grant for parents of children with severe disabilities increased to €7,500 annually. Additional financial support for eligible service pensioners and former members of the disciplined forces.
Support For Families	Further reductions in personal income tax for families with children, continuing the three-year tax reform introduced in Budget 2026. Married tax computation: tax-free income threshold increased to €20,000 for families with one child and €30,000 for families with two or more children. Parent tax computation: tax-free income threshold increased to €16,000 for parents with one child and €24,000 for parents with two or more children. Further increases in these tax-free thresholds are planned for 2028. Continuation of the €500 payment for eligible children in post-secondary education. Reimbursement for families adopting children from overseas increased by €1,000 to €13,000. Foster parents to benefit from an additional 10 days of paid leave. Government assistance to cover therapy costs for children with disabilities under 18. From 2027, eligibility for free childcare for new beneficiaries will be restricted to Maltese citizens, EU citizens residing in Malta and long-term residents, with existing beneficiaries protected under transitional arrangements.
Tax	Introduction of a reduced corporate tax rate of 25% on retained or reinvested profits for qualifying companies with annual turnover not exceeding €1 million, subject to implementing conditions. Profits distributed as dividends will remain subject to the 35% corporate tax rate under the announced framework. Introduction of a domestic VAT reverse-charge mechanism for certain business-to-business construction services to strengthen tax compliance. New administrative penalties for businesses failing to issue correct VAT invoices or fiscal receipts, ranging from €100 to €500 for repeated infringements within 24 months. New guidance to clarify the application of VAT exemptions on food products, particularly ready-to-eat food. Proposed changes to the taxation of property transactions involving the sale of airspace to improve transparency and prevent tax avoidance.
Business	Continued Malta Enterprise incentives supporting digitalisation, automation, innovation and higher-value investment. Introduction of a reduced 25% tax rate on qualifying retained or reinvested profits aimed at encouraging smaller companies to reinvest in their operations. Continued support for business diversification and the development of specialised industries. Ongoing initiatives to strengthen Malta's financial services sector, including family offices, fintech, crypto-assets and aircraft leasing. New work-permit application fees for third-country nationals increased from €600 to €800, together with an additional €400 annual infrastructure contribution payable on new applications and renewals. Continued efforts to improve Malta's regulatory and administrative environment to attract business investment.
Property	Renewal of existing government schemes supporting property acquisition, housing and renovation during 2027. Continued property-related incentives aimed at supporting homeownership and residential investment. New measures addressing property transactions involving airspace sales, including enhanced disclosure, valuations and compliance requirements. Introduction of a domestic VAT reverse-charge mechanism for certain construction services, subject to further implementing details. Continued government investment in infrastructure and urban development projects.
Clean & Green	Tourist eco-contribution for hotel and other collective accommodation increased from €1.50 to €8 per person per night, capped at €64. Tourist eco-contribution for short-let accommodation set at €10 per person per night, capped at €80. Introduction of a €10 eco-contribution for cruise passengers disembarking and re-embarking in Malta, and a €5 charge for tourists visiting Comino. Renewal of existing incentives for electric vehicles and renewable energy. Approximately €75 million allocated to improving Malta's electricity distribution network. Continued investment in the second Malta–Sicily electricity interconnector, with studies progressing on a third interconnector and a new Malta–Gozo electricity connection. Continued studies on offshore wind energy, renewable energy imports and battery storage. Government target for renewable energy to account for 25% of energy by 2030. Continued investment in road, maritime and public infrastructure projects.
Transport & Tourism	Free public transport to remain available to Maltese citizens, EU citizens residing in Malta and long-term residents, with new restrictions affecting other third-country nationals. Tourist fares on fast ferry services to increase by €3 per journey. Gozo ferry fares for non-residents to increase, including an adult passenger fare of €11 and a vehicle-and-driver fare of €22. Introduction of additional administrative charges affecting certain holders of non-EU driving licences, subject to exemptions. Review of airline incentives to encourage tourism during the shoulder and winter seasons. Increased annual yacht-registration fees for certain vessels between 10 and 24 metres in length.

At Vertex Alliance, we can assist with any Budget 2027–related queries and help you understand how the new measures may impact your business or personal tax position. With years of experience in Malta’s corporate and tax sectors, our team of expert advisors is well-equipped to provide practical, tailored guidance. Get in touch: info@valtd.com.

Reference

Malta Budget 2026

Malta Budget 2027

Malta Budget 2027 Overview

Reference

Follow us on WeChat

Connect with us and keep up to date with our latest news and programme information.

Method 1

Method 2