VAT on e-books has been reduced to 5% and five schemes allowing for a reduced duty rate on transfers of property have been extended to 2019.
In addition, five stamp duty incentives allowing for a reduced duty rate on the acquisition of property have been extended until the end of 2019. Such incentives are (a) the duty reduction available for first time buyers of residential property, (b) the duty reduction available on the acquisition of replacement property, (c) the duty reduction on the purchase of scheduled property or property in Urban Conservation Areas (UCAs), (d) the duty reduction on the purchase of property in Gozo, and (e) the duty reduction on the acquisition of shares and commercial tenements in family businesses.
All these measures have been announced by the Minister for Finance in his 2019 budget speech of October 2018. Hereunder is a summary of each measure.
As from 1st January 2019, the reduced rate of VAT of 5% that, for years, has been applicable in Malta to supplies of audio books, books and printed matter supplied on physical means like CDs and USBs, will be extended to books supplied electronically (i.e. e-books).
In all cases, the 5% VAT rate does not apply to publications wholly or predominantly devoted to advertising or wholly or predominantly consisting of video content or audible music. Legal Notice 434 has been published on 14th December 2018 to enact the said extension in Malta. This follows on an amendment to the EU VAT Directive, published in November 2018, which made it possible for Member States to align the VAT rates for physical and electronic publications.
The incentive is for first time buyers of residential property. If made until the end of 2019 (formerly 2018), such acquisitions are exempt from duty on the first €150,000, or on a pro-rata portion in case of co-acquisition, of the aggregate value of the consideration paid for the acquisition of such immovable property. The incentive applies provided that:
The incentive is for individuals who, during 2019 (formerly up to the end of 2018), replace their sole residential property with another within 12 months from vacating the first. Duty on the first €86,000, or the pro-rata portion in case of co-acquisition, of the value of the replacement property is refunded. Such incentive applies provided that:
The incentive is for individuals who acquire residential property situated within a UCA or of a property that is scheduled by the Planning Authority. The incentive, extended until the end of 2019, reduces the rate of duty from the standard 5% to 2% on the higher of the consideration or value of the property. The incentive shall be forfeited in case of illegal development of the property or if the property is not regenerated according to the characteristics of the area or restoration of the said property. Such incentive applies provided that:
The incentive is for individuals who acquire residential property situated in Gozo by the end of 2019 (formerly 2018), including a garage as defined, or land on which only one residential unit is to be built. This incentive reduces the rate of duty from the standard 5% to 2% on the higher of the consideration or value of the property. Such applies provided that:
The incentive is intended to benefit family businesses, whereby a reduced duty rate may apply on the donation of company shares and commercial tenements to other family members. The incentive reduces the rate of duty from the standard 2% or 5% to 1.5% on the real value of the shares or commercial tenement. The incentive hasbeen extended for the third time in 2018, until the end of 2019. Such applies provided that:
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