(i) Residents

Individuals are subject to tax on income arising in a calendar year. The income is assessed in the following year in which it arises and is subject to the progressive rates below.

With effect from 1 January 2009, the rates of married couples are:

With effect from 1 January 2009, the rates of other individuals resident in Malta including married couples who opt for a separate computation are:

(ii) Non- Residents

Non-residents are subject to tax in Malta on their income and capital gains arising in Malta at the below rates:

Pensions and fringe benefits payable to employees are taxed at the above normal rates (exemptions apply in certain cases).

Personal and Other Deductions

Various personal expenses are deductible against an individual personal income such as alimony payments, school fees and expenses for the provision of home services for the elderly, subject to a number of conditions.

Expenses that are wholly and exclusively incurred in the production of the income derived from a trade, business, profession or vocation are deductible against such income (with some exceptions). For example, interest incurred on the borrowing of money to be used in the business may be deducted against the income generated from such business in order to arrive at the taxable income.

A trading loss may be set off against any other income of the same year and can be carried forward indefinitely, whereas capital losses may be set off only against capital gains.