Tax Guide
Financial Year – 1 January to 31 December
Currency – Euro
Corporate Tax Summary
Residence – Companies that are incorporated in Malta are considered to be both domiciled and resident in Malta.
Overseas companies that are not incorporated in Malta are considered to be resident in Malta when the control and management of their activities are exercised in Malta. The creation of a permanent establishment in Malta by an overseas company must be registered as a branch with the Malta Business Registry and taxed on any income generated in Malta.
Basis of Taxation – Companies that are resident and domiciled in Malta are taxed on their worldwide income and capital gains. Companies that are resident but not domiciled in Malta are taxed on income and capital gains arising in Malta and on foreign income remitted to Malta. Companies that are incorporated outside of Malta, carrying on business activities in Malta are subject to tax in Malta on income arising in Malta.
Malta operates the full-imputation system of taxation, i.e. no further tax is imposed upon distribution of a dividend by a Malta registered company to its shareholder. A refund of Maltese tax may result if the tax rate of a shareholder is lower than that incurred at company level. This does not apply for certain income thresholds. Due to the application of Malta’s full imputation system and tax payment and refund system, there may be a reduced overall net effective tax rate of 5% subject to satisfying certain conditions.
| Reference | ||
| Corporate Income Tax Rate (%) | 35% | The flat rate of 35% tax is subject to any allowable deductions or exemptions. |
| Branch Tax Rate (%) | 35% | |
| Tax Accounting | Taxable Income is allocated in 5 tax accounts: FTA; IPA; FIA; MTA and Untaxed account. | |
| Withholding Tax Rate: | ||
| Dividends | 0% | 15% WHT applies on distribution of dividends out of untaxed income where the shareholder is a person directly or indirectly acting on behalf of a Maltese domiciled and ordinarily-resident individual, or an EU/ EEA individual who has declared that at least 90% of worldwide income is derived from Malta. |
| Dividends – Conduit Foreign Income | 0% | |
| Interest | 15% | May elect to be charged at the corporate rate of 35% after allowable deductions. |
| Royalties from Intellectual Property | 0% | |
| Fund Payments from Managed Investment Trusts | 0% | Trusts may also opt to be treated as companies, in which case the 35% corporate rate applies. |
| Branch Remittance Tax | 0% | |
| Net Operating Losses (Years) | ||
| Carry back | 0 | |
| Carry forward | Indefinite against income from the same activities |
Individual Tax Summary
Residence – In general, individuals are considered to be Maltese residents for tax purposes if they spend more than 183 days in Malta in one calendar year.
To determine tax residency in Malta, a facts-based test may be applied, which includes:
- Place of abode
- Physical presence, i.e. > 183 days rule
- Regularity and frequency of visits
- Intention to reside in Malta
- Ties of birth
- Ties of family
- Business ties
- Permanent residence in Malta
Basis of Taxation – Malta taxes individuals who are both domiciled and ordinarily resident in Malta on their worldwide income and capital gains.
Individuals who are ordinary resident in Malta but not domiciled are taxable only on income and chargeable gain arising in Malta and worldwide income that is remitted to Malta. No tax is charged on capital gains arising outside Malta, even if this gain is received in Malta.
Individuals who are married to an individual domiciled and ordinarily resident in Malta are taxable on a worldwide basis.
Other individuals not resident in Malta are taxed only income and capital gains arising in Malta.
Filing Status – Tax assessments are done each year based on income arising in the previous calendar year.
Two partners living together under a civil union are jointly responsible for filing tax returns, with one spouse electing to be the responsible spouse for the filing of the tax return. Tax computation may be either on a joint basis or separately. In case of separate computation, passive income is chargeable to the spouse earning the highest income. Nonetheless, spouses may opt to file separate tax returns and be taxed accordingly.
Tax returns together with a self-assessment are to be filed by the end of June of the following year, on the basis of income earned in the previous year. No filing is required if the income of an individual is derived only from employment income or income which has already been taxed at source.
A self-assessment is deemed to represent the correct tax liability of the individual unless the Commissioner of revenue has reason to disagree with such self-assessment.
Personal Income Tax Rates (For Resident Individuals)
| Chargeable Income | Single Rates | Subtract |
| 0 – 9,100 | 0% | 0 |
| 9,101 – 14,500 | 15% | 1365 |
| 14,501 – 19,500 | 25% | 2815 |
| 19,501 – 60,000 | 25% | 2725 |
| 60,001 and Over | 35% | 8725 |
| Chargeable Income | Married Rates | Subtract |
| 0 – 12,700 | 0% | 0 |
| 12,701 – 21,200 | 15% | 1905 |
| 21,201 – 28,700 | 25% | 4025 |
| 28,701 – 60,000 | 25% | 3905 |
| 60,001 and Over | 35% | 9905 |
| Chargeable Income | Parental Rates | Subtract |
| 0 – 10,500 | 0% | 0 |
| 10,501 – 15,800 | 15% | 1575 |
| 15,801 – 21,200 | 25% | 3155 |
| 21,201 – 60,000 | 25% | 3050 |
| 60,001 and Over | 35% | 9050 |
Personal Income Tax Rates (For Non-Resident Individuals)
| Chargeable Income | Parental Rates | Subtract |
| 0 – 700 | 0% | 0 |
| 701 – 3,100 | 20% | 140 |
| 3,101 – 7,800 | 30% | 450 |
| 7,801 and Over | 35% | 840 |
Goods and Services Tax (GST)
| Rate | 18% – 12% – 7% – 5% – 0% |
| Taxable Transactions | 18% (standard rate of VAT) – Applicable on the taxable value of every supply of goods, services or imports, unless exempt or falling within the reduced rates categories. 12% (reduced rate of VAT) – Hiring of pleasure boats; Some health care services; Securities custody services; Some credit and credit guarantee management services. 7% (reduced rate of VAT) – On accommodation supplies of licensed premises. 5% (reduced Rate of VAT) – On various printed matter/supply of electricity/confectionery items/medical accessories/works of art/etc. 0% (zero rate of VAT) – On specified goods and services, such as food (except for catering), pharmaceuticals, transport, gold etc. Various exceptions apply. |
| Registration | Taxable persons whose economic activity consists principally of supplies of services and whose annual turnover is not higher than €30,000 are not required to charge VAT on their supplies, but they still have a registration requirement. Registration can be done either under Article 10 or Article 11 of the VAT Act, depending on the annual turnover and types of transaction. Persons not falling under the above but carrying out intra-community transactions exceeding EUR 10,000 in one calendar year must register for VAT and pay tax in Malta on each intra-community transaction as prescribed under Article 12 of the VAT Act. In Malta there is no exemption from registration. A taxable person established in Malta should apply to be registered for VAT purposes not later than thirty days from the date on which he makes a supply for consideration in Malta other than an exempt supply (without credit). |
| Filing and Payment | Upon registration for VAT purposes, the VAT department will assign VAT periods to the taxpayer, usually on a three-month basis, with the exception of Article 11 (small business) registrations, whereby the tax period shall be for a calendar year. VAT Returns must be submitted together with payment, if applicable, not later than 6 weeks after the end of the tax period. In the case of Article 12 registrations, monthly VAT returns would apply and must be submitted within 2 weeks or 6 weeks from the end of the period, depending on whether it is a declaration of goods received in Malta, or services whose place of supply is deemed to be Malta. |
Other Taxes Payable
| Tax | Reference |
| Payroll Tax | Under the rules of the Final Settlement System (FSS), an employer is required to withhold income tax and social security contributions at source from employees’ salaries (including taxable fringe benefits) which, in most cases, equals the individual’s total tax liability. An FS5 is compiled listing the deduction of tax/social security for each month and forwarded to the Commissioner for Revenue within the following month. Part-time workers can be taxed on a FWT basis of 10% up to €12,000 Social security contributions are shared between the employer and the employee, based on 20% of the weekly basic wage and capped at €96.10 weekly. A maternity contribution is also to be included in the FS5 and paid monthly. |
| Duty | Transfer of immovable property on the island of Malta 5%. Transfer of immovable property on the island of Gozo 2%. Transfer of marketable securities (shares) 2%. Transfer of marketable securities (shares) in property companies 5%. Currently a reduced rate of 1.5% applies to transfers of property made within family members. Transfers within a related of group companies are exempt. |
| Land Tax | There is no Land Tax in Malta |
Property Tax
Transfers of immovable property situated in Malta are generally subject to a final withholding tax (WHT) of 8% based on the transfer value of the property less certain deductible expenses. By way of an exception, the final WHT shall be 10% if the property was acquired before 1 January 2004. Certain other rates of final WHT may apply in specific circumstances.
Under specific conditions, the property tax on immovable property situated in urban conservation areas is set at 5% of the transfer value.
A sole residential property which is sold within three years of acquisition shall be subject to a final withholding tax rate of 2%. On the other hand, if a residential property has been owned and occupied for at least three consecutive years , the transfer shall be exempt from income tax.
These rates may also apply to transfers ‘causa mortis’ or donations.
Last updated: 20 February 2024
