Malta imposes various specific taxes in addition to corporate and personal income taxes. These include:
- Value-Added Tax (VAT): A consumption tax levied on the sale of goods and services. Standard VAT rate is 18%, with reduced rates of 5% and 7% for certain goods and services.
- Property Tax: An annual tax levied on immovable property owned by individuals or entities. Rates vary depending on the property's value and location.
- Environmental Taxes: Taxes imposed on activities that cause environmental harm, such as emissions, waste disposal, and use of natural resources.
- Stamp Duty: A tax levied on various legal documents and transactions, including property transfers, share transfers, and certain contracts.
- Capital Gains Tax: Tax on gains realized from the sale of capital assets, such as real estate, stocks, and securities.
- Customs Duties: Taxes imposed on imports and exports of goods, typically based on the value or quantity of the goods being traded.
Taxpayers Subject to Specific Taxes:
- VAT: Businesses engaged in the supply of goods and services, with some exemptions for certain transactions.
- Property Tax: Property owners, including individuals, companies, and trusts.
- Environmental Taxes: Companies and individuals engaged in activities with environmental impacts, such as manufacturing, waste disposal, and energy production.
- Stamp Duty: Parties involved in transactions subject to stamp duty, such as property buyers, shareholders, and parties to contracts.
- Capital Gains Tax: Individuals or entities realizing gains from the sale of capital assets.
- Customs Duties: Importers and exporters engaged in international trade.
Purpose and Rationale:
- VAT: Revenue generated from VAT is used to fund government expenditure and public services. VAT also serves as a mechanism to promote economic growth and fiscal stability.
- Property Tax: Revenue from property tax contributes to local government budgets and infrastructure development. Property tax also helps regulate property ownership and discourage speculative investment.
- Environmental Taxes: Environmental taxes aim to internalize the costs of environmental damage and encourage sustainable practices. Revenue may be used for environmental protection measures and conservation efforts.
- Stamp Duty: Stamp duty revenue contributes to government revenue and may be allocated to various public services and initiatives.
- Capital Gains Tax: Capital gains tax helps ensure fairness in the tax system by taxing gains from asset appreciation. Revenue may be used for general government expenditure.
- Customs Duties: Customs duties generate revenue for the government and protect domestic industries by regulating international trade.
Legal Framework:
- VAT Act (Chapter 406 of the Laws of Malta)
- Immovable Property (Acquisition by Non-Residents) Act (Chapter 246 of the Laws of Malta)
- Environmental Protection Act (Chapter 549 of the Laws of Malta)
- Duty on Documents and Transfers Act (Chapter 364 of the Laws of Malta)
- Income Tax Act (Chapter 123 of the Laws of Malta)
- Customs Act (Chapter 37 of the Laws of Malta)
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