Malta Budget 2027: What the Speech Actually Announced for Expats, Retirees and Company Owners

Malta's Finance Minister Clyde Caruana delivered the 2027 budget to Parliament on Monday 26 October 2026. The Ministry for Finance has since published the full set of documents on its Budget 2027 page: the budget speech, the draft Financial Estimates 2027 and the Economic Survey. The speech itself, Diskors tal-Budget 2027, runs to 84 pages and is published in Maltese. Every figure below comes from that text; where a phrase is quoted, the translation is ours.

Our preview of 21 October listed what to watch. Now the measures are on the record, and several of them land squarely on people who moved to Malta from abroad: higher fees for non-EU workers, free public services restricted to certain residents, a new lower tax rate for small companies, and the next round of pension increases. One thing has not changed: a budget speech is an announcement, not a law. Most of what follows still needs a Finance Act, a budget measures implementation act or a legal notice before anyone can rely on it.

The frame: no higher income tax, VAT or social security rates

The minister set the boundaries early in the speech. The government will not raise income tax rates, will not raise the VAT rate and will not raise social security contributions. Electricity, gas and fuel prices stay fixed. The speech puts the cost of energy and fuel subsidies at about €392 million in 2026 and says that around €400 million will be spent again in 2027.

The fiscal numbers that frame everything else:

• Deficit: expected at 2.6% of GDP in 2026 and planned at 2.6% again in 2027. The speech says half of the deficit, 1.4% of GDP, is due to the energy subsidies.
• Debt: estimated at 46.7% of GDP in 2026 and 46.8% in 2027.
• Growth: real GDP growth forecast at 4.1% for 2026 and 3.8% for 2027, unemployment at 3.3% and 3.2%.
• Inflation: forecast at 2.5% for 2026 and 2.7% for 2027, after 2.4% in September, as covered in our September inflation note.

The cost-of-living adjustment (COLA) for 2027 is €6.41 a week. The national minimum wage rises by €10.41 a week in 2027, a figure that includes the COLA.

The speech's own framing for the new revenue measures matters for anyone who lives in Malta on a foreign passport. The minister said that Maltese people should remain comfortable in their own country, and that the foreigner who visits or comes to live in Malta should be welcomed as always, but should also contribute to the country for what they receive in return (our translation). Several measures follow that line directly.

For working expats: the family tax bands and the Super Bonus

The 2027 tax bands for parents are confirmed

The second step of the three-year tax reform for families with children goes ahead as tabled in the Pre-Budget Document. The speech publishes the 2027 and 2028 tables for the "married" and "parent" computations:

For 2028 the tax-free band rises again, to €22,500, €18,000, €37,000 and €30,000 respectively. The speech gives the maximum saving for a married couple with two or more children as €4,050 in 2027 and about €6,000 in 2028. These bands apply to anyone taxed in Malta on the standard computations, foreign nationals included. The speech announces nothing for taxpayers on the "single" computation.

The Super Bonus

In the first quarter of 2027, the government will pay the Super Bonus, calculated on 2025 as the base year. Anyone whose income from employment in 2025 was €12,000 or more receives a non-taxable payment of €1,000. Lower earners receive a pro-rata amount on a sliding scale, from €925 (income of €11,000 to €11,999) down to €500 (income of €2,000 to €5,999). The speech says self-employed people, older people who keep working and part-time workers also receive it. Foreign residents who worked in Malta in 2025 fall within the same rule as described; the speech sets no nationality condition.

Separate tax returns for married couples

The government will start a project to reform income tax returns for married couples, so that, as a general rule, each spouse files an individual return. Couples who want a joint return would keep that option where the law allows it. This is announced as a project, with no date.

For non-EU nationals: higher fees and fewer free benefits

This is the part of the budget with the most direct effect on third-country nationals living in Malta.

Work permit fees

The fee for a new work permit application for a non-EU worker rises by €200, from €600 to €800 per person. On top of that, the speech introduces an additional fee of €400 as a contribution to infrastructure, payable by new applicants and on every renewal, every year. It does not apply to minors under 18. The speech adds that many other permits issued by Identità will see their fees revised upwards, without listing them. The government expects about €80 million from the higher work permit fees.

Free public services limited to certain residents

Under the heading of changes in eligibility for certain benefits, the speech announces four measures:

• Free public transport: from January 2027, free travel stays only for Maltese and Gozitans, resident EU citizens and Long-Term Residents.
• The atypical work cheque: from 1 January 2027, paid only to the same groups.
• Free childcare: families already using the service keep their eligibility until their children age out. From 2027, new eligibility is limited to Maltese and Gozitans, resident EU citizens and those who meet the criteria for Long-Term Residents.
• Driving licences issued outside the EU: visitors may drive on such a licence for up to twelve months from entry. A person granted a residence permit may also drive on it for twelve months from entry, and that period does not restart on leaving and re-entering. For those who already hold a permit, the time counts from their last entry before 1 January 2027. After that, a Maltese or EU licence is required. Drivers whose residence permit is for specific driving work are exempt.

The speech also announces an administrative charge of €83 a month on holders of category B and B1 licences issued or renewed from that date, 1 January 2027. Exempt are citizens of the EU and EEA, long-term residents and their spouses, nationals of the United Kingdom, Australia and the United Arab Emirates, and holders of a residence permit for specific driving work. The licence expires with the residence permit and is not renewed if a payment is outstanding.

The government puts the combined effect of these four measures at €46 million a year in savings or new revenue.

What this means in practice: a residence card is not the same as long-term resident status. Non-EU nationals in Malta on a work permit, a nomad permit or one of the residence and tax programmes should check which status their own card shows before assuming they keep free buses or childcare. The exact definitions will be in the implementing rules, which have not been published.

For retirees: pension increases and a higher tax-free limit

The speech confirms that neither the retirement age nor social security contribution rates will rise. For pensioners it announces:

• From January 2027, retirement, invalidity and widows' pensions and the age pension rise by €10 a week, an increase that includes the COLA.
• The income limit on pensions below which no tax is paid rises by €520 a year to €37,624.
• Every pensioner receives the same flat cost-of-living bonus of €21.53 a week in 2027, regardless of the year of retirement.
• The maximum pensionable income for pensioners born before 1962 rises to €28,000.
• From 2027, contributions may be transferred between spouses, so that a spouse without a pension can qualify for one. The parameters are to be announced separately.
• The additional COLA mechanism returns, with payments of €200 to €1,500 a year for low- and middle-income households depending on disposable income and household size.

For retirees who moved to Malta, the important distinction is between the ordinary tax system and the special programmes. The higher tax-free pension limit is an ordinary income tax measure. The speech does not mention the Malta Retirement Programme or the retired pensioner status that starts in 2027, so nothing in the budget changes their flat rate, minimum tax or property thresholds on its face.

For residence programme holders and applicants

The speech announces no change to the Global Residence Programme, the Residence Programme, the Malta Permanent Residence Programme, the nomad permit or the Individual Tax Programme. In the chapter on the economy, it says work continues between the regulator and the Malta Financial Services Advisory Council (MFSAC) to improve the regulatory and administrative framework, and names family offices, crypto companies, fintech and aircraft leasing as areas where presence is growing.

One line in the revenue annex of the speech shows the programmes' weight. For 2026, a revenue line approved at €88.96 million is revised to €113.22 million, and the remark says the main contributor to the increase is fees of office from the Residency Malta Agency, compared with what was expected when the budget was prepared.

Programme holders are still affected indirectly. A holder who is not an EU citizen and not a long-term resident falls on the wrong side of the new eligibility rules for free transport and childcare, and of the driving licence rules, unless one of the exemptions applies.

For company owners

A 25% rate for small companies, on retained profits only

The headline business measure is a new framework under which companies with a turnover of no more than €1 million can pay tax at 25% instead of 35%. The minister stated that the reduction applies to profits that are retained or reinvested; when profits are paid out as dividends, the 35% rate still applies. The measure will run under conditions and limitations to be set in the relevant rules, so that it works coherently with the existing corporate tax system.

The speech does not say how the 25% rate interacts with the shareholder refund system or with the 15% election introduced in 2025, both explained in our corporate tax guide. Until the rules are published, it is not possible to say which companies benefit in practice, or from which year of assessment.

VAT and property measures

• Reverse charge in construction: for covered transactions, the VAT obligation moves from the supplier to the business buying the service, which accounts for the VAT and deducts it where eligible.
• Penalties for missing VAT invoices and fiscal receipts: an administrative system of €100 for the first failure, €200 for the second, €400 for the third and €500 for the fourth and each later failure within 24 months. If the penalty is paid within 30 days, criminal liability for the failure it covers is extinguished. Failures also raise the business's risk score for audits.
• VAT exemption on food: guidelines to clarify how the exemption applies to ready-to-eat food sold by supermarkets, minimarkets and convenience shops.
• Sale of air space: targeted measures to ensure that transfers involving the sale of air space are taxed on their full economic value, including structures with intermediaries or developers who do not appear on the deed. The new framework is to apply prospectively, after consultation.

The minister also said that all incentive schemes in place this year will be renewed for 2027. The family business transfer rate of 1.5%, discussed in our piece on family business transfers, is not repeated in the speech.

For visitors, boat owners and Gozo trips

Several measures hit people who visit Malta, or who own boats there:

• Eco-contribution: from 1 January 2027, €8 a night up to €64 per person in collective accommodation such as hotels, and €10 a night up to €80 per person in short-let apartments. It is paid by those aged over 18. English language schools stop paying it.
• Cruise passengers: a new €10 eco-contribution for passengers who disembark and re-embark on the same ship in Malta; not for cruises that start in Malta.
• Comino: a €5 eco-contribution in the existing booking system for the Blue Lagoon.
• Fast ferries: fares for tourists rise by €3 a trip.
• Gozo ferry for non-residents: €11 for an adult (from €4.65), €7 for a child (from €1.15), €22 for a vehicle and driver (from €15.70).
• Recreational boats from 10 to under 24 metres: an additional annual registration charge by length band, from €300 for 10 to under 12 metres up to €2,600 for 21 to under 24 metres. It does not apply to professional fishermen or to vessels under 10 metres.

Announced versus enacted

As of 1 November 2026, none of these measures is law yet. The most recent Legal Notices on legislation.mt, up to L.N. 305 of 2026 in the Government Gazette of 30 October, deal with other matters; no notice implementing Budget 2027 had appeared.

The measures fall into three groups:

1. Measures with a start date in the speech: the eco-contribution (1 January 2027), the eligibility limits on free transport and the atypical work cheque (January 2027), the licence rule counted from 1 January 2027, and the pension increases (January 2027). These need legal notices or amendments to take effect on those dates.
2. Measures whose detail depends on rules still to be written: the 25% rate for small companies, the spouse contribution transfer and the work permit and Identità fees.
3. Projects: separate tax returns for married couples and the air-space transfer rules, which the speech itself describes as reforms to be worked out.

Tax measures typically end up in a budget measures implementation act. For Budget 2026, the Budget Measures Implementation Act, 2026 became Act III of 2026 in March 2026, months after the speech. Fee changes and eligibility rules can move faster, through legal notices. The practical rule: plan around the direction, but act on the legal text, especially for anything involving company tax or permits.

Work with Sebastian

If you live in Malta on a non-EU passport, are retiring there or own a Maltese company and want to know what Budget 2027 means for your own position, book a consultation.