PENSIONS (TAX EXEMPTION) RULES

PENSIONS (TAX EXEMPTION)

SUBSIDIARY LEGISLATION 123.204

PENSIONS (TAX EXEMPTION) RULES

4th March 2022

LEGAL NOTICE 98 of 2022, as amended by Legal Notices 220 of

2022, 48 of 2023, 5 and 356 of 2024 and 53 of 2026.

The title of these rules is the Pensions (Tax Exemption)

Rules.

In these rules, unless the context otherwise requires

"Act" means the Income Tax Act;

"pension income" means pension income derived by an

individual who is at least sixty-one (61) years old in the year in which

he receives the said income and which would be taxable, were it not

for these rules, according to the provisions of article 4(1)(d) of the Act.

Pension income derived by an individual on or after 1

January 2022 shall be partially or fully exempt from tax as follows

Applicability of the exemption

Amount exempt

Pension income derived in

Twenty per cent (20%),

the year immediately preceding the but

not

exceeding

two

year of assessment 2023

thousand, eight hundred and

sixty-four euro (€2,864)

Pension income derived in

Forty per cent (40%),

the year immediately preceding the but not exceeding five

year of assessment 2024

thousand, nine hundred and

eighty-seven euro (€5,987)

Pension income derived in

Sixty per cent (60%),

the year immediately preceding the but not exceeding nine

year of assessment 2025

thousand, seven hundred and

thirty-two euro (€9,732)

Pension income derived in

Eighty per cent (80%),

the year immediately preceding the but not exceeding thirteen

year of assessment 2026

thousand, three hundred and

nine euro (€13,309);

Pension income derived in

One hundred per cent

the year immediately preceding the (100%), but not exceeding

year of assessment 2027 and in thirty-seven thousand, one

subsequent years

hundred and four euro

(€37,104)

In the case of an individual who, in the year of

assessment 2027 or any subsequent year, benefits from the exemption

granted under rule 3 and who is chargeable to tax at the rates specified

in article 56(1)(a)(i) of the Act, a tax rebate shall be granted as a set-

off against the tax on the chargeable income, as follows

PENSIONS (TAX EXEMPTION)

Tax rebate = (chargeable income less 15,000) multiplied by 15%

Provided that such rebate shall not exceed €540

Provided further that any negative result shall not be taken

into account and any rebate granted under this rule may not give rise

to a refund or be available to be carried forward.