Country Trading Profiles Malta - Taxes

Tax Rates

Nature of the tax: Value Added Tax
Tax rate: 18%
Reduced tax rate: A reduced tax rate of 7% is applicable to hotels and electricity. Medicines, food products, banking and insurance products are not subject to VAT.
Other consumption taxes: Excise duty is applicable on the import of certain products like fuel, vehicles, cigarettes and alcohol. The exhaustive list of products subject to excise duty can be seen on the website of the Customs office.
More detailed information on excise duties is available concerning alcoholic beverages, tobacco products, energy products on the European Commission website.

Corporate Tax for the ordinarily resident companies on their worldwide income and chargeable gains.

35%

Capital gains taxation: Companies are taxed on the transfer of securities, business goodwill, copyrights, patents, trademarks and trade names and on the assignment of ownership rights over such properties.
Main allowable deductions and tax credit: The legislation provides incentives to qualifying companies that undertake certain target sector activities specified in the law (some manufacturing activities, R&D, production of films etc.). The principal tax incentives provide reduced taxation rates and investment tax credits. Expenses are deductible for depletion and depreciation, net operating losses, payment to foreign associates, some taxes...
Other corporate taxes: Stamp duties and social security contributions exist.

Allowable deductions and tax credit: The Business Promotion Act allows for certain deductions or exemptions for income tax purposes to eligible individuals, mainly individual members of a partnership. Malta has enacted Incentives for expat financial services professionals. For more information, consult the Highly Qualified Persons Rules, 2011.
Special expatriate tax regime: The term 'expatriate' is not defined by the Income Tax Acts. Temporary residents and persons who are neither ordinarily resident nor domiciled in Malta pay income tax on income arising in Malta. A guide to taxation for expatriates can be found at the following website: The Malta Institute of Accountants

Countries with whom a double taxation treaty have been signed: See the list of double Taxation Treaties
Withholding taxes: There is no tax on dividends, interest and royalties.
Bilateral agreement

Tax Authorities: IRD
Other domestic resources: Malta Taxation Center
Consult Taxation trends in the European Union.

Tax year: The financial year starts on 1st January and ends on 31st December of the same year.
Accounting standards: The account reports need to conform to the norms decreed by the IAS (International Accounting Standards).
Accounting regulation bodies: Malta Institute of Accountants
Accounting reports: The annual accounts should give a clear view of the company's assets, liabilities, financial position and profits or losses. It must comprise: the balance sheet, the profit and loss account, and the notes to the accounts.
Publication requirements: According to the Companies Act of 1995, all Maltese companies are required to submit their account reports annually, showing correct and honest picture of the volume of the business done along with the justification of the various transactions performed.
Professional accountancy bodies: Accountancy Board
Certification and auditing: The Maltese companies need to appoint one or more than one external auditors for validating the annual account statements which are presented during their annual general meetings. An auditor has to be competent enough to conduct such audits and should confirm to the requirements as given in the Chapter IX of the companies act (Companies Act of 1995). You can contact an external auditor: KPMG, Ernst & Young, PricewaterhouseCoopers, Deloitte.
Accounting news: Business News Portal
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