Inclusion, Equality and Social Welfare

In Malta, personal taxation operates on a general principle: if you are domiciled and ordinarily resident in the country, you must declare all income, including that of your spouse and dependent children, from any source, including that from abroad. If you are not domiciled or ordinarily resident in Malta, you should declare income earned or derived from Malta, as well as any income remitted to the country. The taxation system is progressive, meaning higher income leads to higher tax rates. Personal tax is typically paid through the Provisional Tax system, the Final Settlement System (FSS), or Self-Assessment. Provisional Tax applies to those with income sources like trade, business, profession,or vocation.

FSS, on the other hand, is designed for employees and pensioners, ensuring accurate tax deductions from emoluments as they are received to prevent significant refunds or tax claims. Any outstanding tax not collected by these systems must be settled through Self-Assessment by the 30th of June of the following year.

With the FSS Prescribed Percentage Request, you can submit a request to pay taxes on Social Security contributory Pensions that include only the Retirement Pension and Invalidity Pension throughout the year, instead of paying a tax bill when due. As a Social Security contributory pension beneficiary, you have the option to request that a specific percentage be deducted from your pension entitlement as tax. This prescribed percentage, chosen by you, will be inserted into the social security benefits system, and the tax deduction will be made from your pension entitlement accordingly. It is important that the percentage tax rate chosen is discussed with officers from the Commissioner for Revenue department to come to a correct percentage rate as extra funds accumulated from tax deducted cannot be refunded.

As from 1st January 2024 any FSS prescibed percentage from the Widow/er’s Pension will no longer be automatically deducted by the Department of Social Security. This means that it is the responsibility of the widow/er in receipt of the Widow/er’s Pension to have tax deducted from any other income source.

The amount of FSS tax deduction from the pension received can be viewed online through mySocialSecurity using the Statement of Payments Issued service. Whereby the beneficiary can also use the service Statement of Earnings - FS3 which includes all taxable benefits and Pensions from the Department of Social Security. In turn, the Department of Social Security then captures this FSS data and forwards it to the Commissioner for Revenue (CfR) of the deductions made from the social security benefits of beneficiaries.

You also have the flexibility to decide whether to increase or decrease the FSS prescribed percentage to be deducted from your pension entitlement. For such requests, the beneficiary must be aware that tax deduction from the pension is spanned throughout the year. This means that as a recommendation, any requests for prescribed tax increase is preferably not to be demanded at the final months of the year to avoid a high amount of tax deducation in a limited number of months. 

To submit a FSS Prescribed Percentage Request, you need to be a Social Security contributory pension beneficiary in receipt of the Retirement Pension or Invalidity Pension.

Fill in and submit your request online.