Taxes in Malta

Malta's main tax laws include the Income Tax Act, Cap. 123, the Income Tax Management Act, the VAT Act, Cap. 406, and the Duty on Documents and Transfers Act, Cap. 364. The Malta Tax and Customs Administration, usually called MTCA, administers income tax, VAT, duties and related procedures. A private tax practitioner can prepare filings or provide advice, but the taxpayer remains responsible for accurate and timely information. Tax residence is based on facts rather than nationality or civil status. Spending more than 183 days in Malta during a calendar year generally makes a person tax resident. A person who arrives to establish residence can become resident from arrival, while a permanent or indefinite stay generally supports ordinary residence. Domicile is a separate concept, and a person can be resident in more than one country. A double-tax agreement may then determine the country allowed to tax particular income. An individual who is ordinarily resident and domiciled in Malta is generally taxed on worldwide income and capital gains. A person who is resident but not domiciled and is not ordinarily resident generally follows the remittance basis: Malta-source income is taxable, foreign income is taxable when received in Malta, and foreign capital gains are generally not taxed in Malta even when received there. Nonresidents are generally taxed on Malta-source or otherwise Malta-taxable income. A long-term resident or a person holding a permanent residence certificate or card may fall under a worldwide basis according to MTCA guidance, so residence documents and actual circumstances need review together. For 2026, individual chargeable income uses progressive rates of 0%, 15%, 25% and 35%. The applicable bands and tax-reduction amounts depend on whether the taxpayer uses the single, married, married-with-children or parent rates. Under the single rates, the bands are 0 to EUR 12,000, EUR 12,001 to EUR 16,000, EUR 16,001 to EUR 60,000 and over EUR 60,000, with reductions of EUR 0, EUR 1,800, EUR 3,400 and EUR 9,400. Married rates use bands of 0 to EUR 15,000, EUR 15,001 to EUR 23,000, EUR 23,001 to EUR 60,000 and over EUR 60,000, with reductions of EUR 0, EUR 2,250, EUR 4,550 and EUR 10,550. Married rates with one child use bands of 0 to EUR 17,500, EUR 17,501 to EUR 26,500, EUR 26,501 to EUR 60,000 and over EUR 60,000, with reductions of EUR 0, EUR 2,625, EUR 5,275 and EUR 11,275. Married rates with two or more children use bands of 0 to EUR 22,500, EUR 22,501 to EUR 32,000, EUR 32,001 to EUR 60,000 and over EUR 60,000, with reductions of EUR 0, EUR 3,375, EUR 6,575 and EUR 12,575. Parent rates and parent rates with children use separate bands and reductions. The child rates depend on conditions such as Maltese, EU or EEA nationality, long-term residence and a child resident and born in Malta; a couple with one nonresident spouse may also need at least 90% of worldwide income to arise in Malta. The applicable status should be checked rather than selected solely by household description. Employees and pensioners usually pay income tax through Final Settlement System deductions, known as FSS. People earning from a trade, business, profession or vocation generally make Provisional Tax payments, with the remaining amount handled through Self-Assessment. The income tax return, assessment and settlement are generally due on 30 June, while online filing is generally due on 31 July. Unpaid tax after 30 June attracts interest of 0.6% per month. A refund can generally be issued within six months after 30 June only when all income tax and VAT returns have been filed. Class 1 and Class 2 Social Security Contributions are separate statutory payments and are not income tax. A Maltese company whose management and control or activity is in Malta generally needs income-tax registration. Incorporation and registration with the Malta Business Registry generally produce an automatic nine-digit tax number. A Maltese company is generally taxed at 35% on net chargeable income, including worldwide income and capital gains. Under the imputation system, a dividend distribution can give the shareholder a refund of part or all of the corporate tax, but no universal effective rate applies to every company or distribution. Eligible entities may instead elect a Final Income Tax Without Imputation regime at 15% for years of assessment from 2025, subject to conditions, a minimum period of five consecutive years and the fact that the tax is non-refundable. Company records must support income and deductions. A company return is generally due nine months after the financial year ends; for financial years ending from January to June, the deadline is 31 March of the following year, and for financial years ending from July to December it is nine months after year-end. Online company filing must be made through a registered tax practitioner, and an electronic extension does not defer payment. VAT is generally charged at 18%, with reduced rates of 12%, 7%, 5% and 0% for specified supplies. Article 10 registration applies to taxable supplies, requires VAT to be charged and generally permits recovery of input VAT. Article 11 registration for a small enterprise means that the business does not charge output VAT and cannot recover input VAT. The entry threshold is generally EUR 35,000 for goods activities or EUR 30,000 for other activities; the exit threshold is generally EUR 28,000 for goods activities or EUR 24,000 for other activities. Article 12 applies in situations such as intra-community acquisitions of goods above EUR 10,000 per year or imported services for which a Maltese customer is liable. VAT returns and payment are generally due by the 15th day after the relevant period. A sole proprietor registered under Article 10 can generally file online within an additional seven days. The EU small-enterprise scheme under Articles 11A and 11B has applied since 2025. Registration is available through MTCA eServices or e-ID, with alternative access where available. Rental income can be taxed under a final 15% regime on gross rental income through form TA24. Residents, nonresidents and companies may qualify, and the choice is made annually. The final regime does not allow deductions or set-off. An alternative is to declare the rental income in the normal tax return, where progressive rates apply and permitted deductions may be available. Related-party exclusions can affect eligibility. Owning property alone does not create a general ownership tax. Rental income is taxable, while a property transfer can create capital-transfer tax for the seller and stamp duty for the buyer. A promise of sale must generally be reported to the Property Tax Directorate within 21 days. The notary normally submits the DDT1 form, the deed, supporting documents and payments. Rates, exemptions and incentives depend on the transaction. A share transfer is generally subject to duty of 2% of the higher market value or price, while a transfer involving a property company can be subject to 5%. These taxes are distinct from ordinary purchase and sale costs. A taxpayer may object to an assessment within 30 days of receiving the notice. The objection must state grounds, undisputed tax must be paid and a missing return must be filed. A refusal can generally be appealed within 30 days. Additional tax for a late individual return rises with the delay: EUR 10 for up to six months, EUR 50 for six to twelve months, EUR 100 for twelve to eighteen months, EUR 150 for eighteen to twenty-four months, EUR 200 for twenty-four to thirty-six months, EUR 300 for thirty-six to forty-eight months, EUR 400 for forty-eight to sixty months and EUR 500 after sixty months. Malta has an extensive network of double-tax agreements, mainly based on the OECD Model. Dividends, interest, royalties, employment income and double-tax relief depend on the exact treaty with the other country, so a rate from another agreement cannot be transferred automatically. Transfer pricing rules under S.L. 123.207 require arm's-length treatment. Arrangements made before 1 January 2024 may be grandfathered only if they have not been materially altered. Advance Pricing Agreements, Mutual Agreement Procedures, the EU Arbitration Convention and the EU Dispute Resolution Mechanism can address particular cross-border disputes. Remittance-basis taxation and treaty relief require a combined analysis of residence, domicile, income source and the relevant agreement. Cross-border VAT can also involve Articles 11A, 11B or 12.