Accounting & Tax Compliance in Malta

Statutory accounts (audited), corporate tax filings, and shareholder refund claim documentation aligned with Maltese standards, including substance and transfer pricing compliance.

Malta Reviewed September 2026

Currency

EUR

Corporate tax rate

35% nominal · ~5% effective for trading income via 6/7 shareholder refund · 15% flat under FITWI (no refund, since 2025)

VAT standard rate

18%

Legal forms

Private limited company · Public limited company

Bookkeeping standard

IFRS, or General Accounting Principles for Smaller Entities (GAPSE) for qualifying smaller companies

Annual filing

Annual accounts filed with the Malta Business Registry within 10 months of year-end (42 days for filing after approval)

Talk to a Malta accounting expert

How accounting and tax compliance work in Malta

Malta taxes resident companies at a flat 35% on worldwide profit — the highest nominal corporate rate in the EU. The mechanism that makes this headline figure misleading on its own is the full imputation and refund system: once a company distributes dividends after paying the 35% tax, shareholders can claim a refund of 6/7ths of that tax for trading income (5/7ths for passive interest and royalties, 2/3rds for certain other categories), bringing the effective combined rate down to approximately 5% for most operating businesses. Since 2025, companies may instead elect the Final Income Tax Without Imputation (FITWI) regime — a flat 15% rate with no refund mechanism — a simpler alternative for companies that prefer not to navigate the refund claim process.

Operating in Malta means navigating a tax system that looks complex on the surface — three different refund fractions, an alternative flat-rate regime, substance requirements — but produces predictable, well-established outcomes for companies that document the refund claim process correctly and maintain genuine local substance.

Discuss your Malta accounting setup

Rate structure and what it applies to

35% nominal · ~5% effective for trading income via 6/7 shareholder refund · 15% flat under FITWI (no refund, since 2025)

Three distinct refund fractions — — 6/7ths for trading income, 5/7ths for passive interest and royalties, 2/3rds for certain other income categories — applying the wrong fraction is a common and costly filing error
Increased substance scrutiny — for 2026 — Maltese authorities now require demonstrable evidence that commercial decisions are made in Malta, not just registered there, before processing refund claims
FITWI as an alternative regime — — companies can elect a flat 15% rate with no refund mechanism since 2025, trading a higher headline rate for filing simplicity
Tightened CFC and transfer pricing rules — , requiring more rigorous documentation of intercompany transactions at market value

Get a jurisdiction-specific tax estimate

Rates that apply in Malta

Rate	Applies to
18%	Standard rate — most goods and services
7% and 5%	Reduced rate(s) — defined categories of goods and services

Confirm your VAT registration obligation

IFRS, or General Accounting Principles for Smaller Entities (GAPSE) for qualifying smaller companies, and when an audit is required

Statutory bookkeeping in Malta follows IFRS, or General Accounting Principles for Smaller Entities (GAPSE) for qualifying smaller companies. Statutory audit mandatory above 2 of 3 thresholds: €5.5M balance sheet, €11M turnover, 50 employees — aligned with EU harmonized thresholds.

Confirm your audit obligation

Annual accounts and registration

Annual accounts filed with the Malta Business Registry within 10 months of year-end (42 days for filing after approval).

Entity registration runs through the Malta Business Registry (MBR), typically taking As little as 2–5 business days.

Plan your filing calendar

Frequently asked questions

How does Malta's tax refund system actually work?

A Maltese company pays the standard 35% corporate tax on its profits. Once dividends are distributed, shareholders can claim a refund — typically 6/7ths of the tax paid for trading income — bringing the combined effective rate down to roughly 5%. The system has operated for decades and is fully compliant with EU and OECD standards, but requires correct documentation of the dividend distribution and refund claim.

What is the FITWI regime and when should a company choose it?

Final Income Tax Without Imputation, available since 2025, lets a company pay a flat 15% rate with no refund mechanism at all. It suits companies that prefer filing simplicity over the lower effective rate, or whose shareholder structure makes the refund process more complex than the FITWI alternative.

What does Malta mean by "substance" for refund purposes?

Maltese tax authorities require evidence that genuine commercial decisions — board meetings, management activity, operational direction — actually take place in Malta, not merely that the company is registered there. Companies unable to demonstrate this risk having their refund claims denied, reverting effectively to the full 35% rate.

Are Maltese social security contributions percentage-based?

No. Unlike most EU markets, Malta calculates social security contributions as a fixed weekly amount — up to approximately €50 per week for 2026 — matched equally by employer and employee, rather than as a percentage of salary. This makes employer cost predictable regardless of an employee's actual compensation level.

Talk to a Malta accounting expert

Companies attracted to Malta's effective 5% rate without understanding the refund mechanism's documentation requirements, or without genuine local substance, risk having refund claims denied — turning an expected 5% effective rate into the full 35% nominal rate. The refund system rewards companies that treat substance and documentation as part of the tax strategy, not as an afterthought.

Talk to an expert Explore our Accounting & Tax service