Applicable Tax Deductions:
a. Employment-Related Expenses: Taxpayers can deduct certain expenses related to their employment, such as uniform costs, travel expenses for work purposes, and professional development expenses. They must be wholly and exclusively incurred in the production of income to be deductible.
b. Healthcare Expenses: Medical expenses, including hospital bills, doctor's fees, and prescription medications, are eligible for deductions.
c. Education Expenses: Taxpayers may deduct education-related expenses, including tuition fees, textbooks, and educational materials for themselves or their dependents.
d. Interest on Loans: Interest paid on loans for the acquisition, improvement, or maintenance of a residential property may be deducted.
e. Contributions to Retirement Funds: Contributions to approved pension schemes or retirement funds are deductible up to certain limits.
f. Donations to Charitable Organizations: Contributions made to registered charitable organizations may be eligible for deductions.
g. Income Protection Insurance: Premiums paid for income protection insurance policies may be deductible.
h. Alimony payments to an estranged spouse: These are deductible, but not payments for child maintenance.
Tax Benefits:
a. Tax Credits: Taxpayers may be eligible for various tax credits, such as:
- Child tax credits for parents or guardians.
- Elderly or disabled tax credits for qualifying individuals.
- Energy efficiency tax credits for investments in renewable energy or energy-efficient technologies.
b. Tax Exemptions: Certain types of income may be exempt from taxation, such as:
- Dividends received from qualified investments.
- Capital gains on the sale of a primary residence under certain conditions.
c. Special Considerations: Special tax considerations may apply to specific groups of taxpayers, including:
- Students may benefit from deductions for education expenses and scholarships.
- Families with children may qualify for additional tax credits and allowances.
- Children with special needs, childcare services, private home elderly care, private school fees, certain sports, cultural, or artistic events for children, school transport fees, and community support services.
The legal basis for personal tax deductions and benefits in Malta can be found in the Income Tax Act (Chapter 123 of the Laws of Malta). Specific articles and sections relevant to tax deductions and benefits include:
- Article 14: Provides for deductions allowable from chargeable income.
- Article 4: Defines what constitutes chargeable income and the deductions that can be claimed against it.
- Article 5: Specifies exemptions from tax on certain types of income.
- Article 53: Outlines tax credits available to taxpayers.
Malta's tax legislation offers a range of deductions and benefits aimed at reducing tax liability for individuals. Taxpayers can claim deductions for various expenses, such as healthcare, education, and employment-related costs, while also benefiting from tax credits, exemptions, and special considerations. The Income Tax Act establishes the legal framework for these deductions and benefits, reflecting the government's objectives of supporting taxpayers and fostering socio-economic development.
