Private pension products available in Malta are governed by rules established by the Malta Financial Services Authority (MFSA).
We have prepared a summary of the current rules & tax measure incentives on private pension plans:
- Your contributions towards a private pension plan are eligible for a tax credit of 25%, up to a maximum set by the government. Under current legislation, contribution amount is capped at €3,000 (resulting in a maximum tax credit of €750 per person (€3,000 * 25% = €750);
- You can access your savings from your private pension plan from the age of 61 but no later than 70 years of age;
- You are eligible for a tax credit only if you are 18 years of age, when your pension scheme is set up and if you are a resident of Malta for tax purposes. Tax credit is refunded the year following your initial deposit. E.g. if you started the plan in 2020, tax credit will be refunded in 2021;
You can access your savings in your private pension retirement scheme as follows:
- You may choose to take up to 30% of your savings as a tax free lump sum. The rest (i.e the 70%) are taken as a pension. This can be in the form of an annuity or in the form of programmed withdrawals. This income might be subject to taxation;
- The pension scheme will pay your heirs 101% of the value in your account upon your death;
- The pension scheme may provide your heirs with a payment for funeral expenses (to a certain limit) as a partial pre-payment of the Death Benefit;