Tax incentives for Malta employers who contribute into Malta private occupational pension schemes

During the budget speech delivered on the 17th of October, the Minister for Finance, Profs. Scicluna, announced that during the course of this year there will be fiscal incentives for employers who wish to contribute into Malta occupational pension schemes.

The incentives will include an income tax deduction for the employer, equivalent to the amount contributed by the employer into the pension scheme for the employee, as the contribution will be deemed to be an expense for the employer in question.

Moreover, the employer will also be entitled to a credit of €150 on its tax bill for every €1,000 contributed into occupational pension schemes for the benefit of its employees. The same incentives will also be available for self-employed individuals.

From an employee’s perspective, any pension contributions will not be deemed to be a fringe benefit for income tax purposes and any contribution made to the same occupational pension scheme will benefit from a deduction of up to €150, depending on the amount contributed.

Finally, as from 1st January 2017, an amount of pension income (starting from €10,500 and increasing to €13,000) will be exempt from income tax in Malta.

For more information on how to set up pension schemes, on the regulatory framework surrounding pensions and on the various pension options available to employers, please contact Dr Matthew Brincat,