The full imputation system refunds part of the tax paid when profits are distributed, and the fraction depends on the income type. The mechanism step by step, with the three refund fractions.
- FITWI as an alternative regime
- Nine-month filing deadline
- How does Malta's tax refund system actually work?
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.
What a company pays in Malta. Every figure below is published on the Malta country page.
| Malta | |
|---|---|
| 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% |
| VAT reduced rates | 7% and 5% |
| Accounting standard | IFRS, or General Accounting Principles for Smaller Entities (GAPSE) for qualifying smaller companies |
| Currency | EUR |
What makes it complex in Malta
- 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.
- Nine-month filing deadline — from financial year-end for the annual corporate tax return, extendable to a later date for electronic filers within a defined window.
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.
FITWI as an alternative regime is one of the points HTLC Network handles for clients operating in Malta, within a single engagement that covers every other country they operate in — executed locally, governed centrally.
In Malta the scope is: Statutory accounts (audited), corporate tax filings, and shareholder refund claim documentation aligned with Maltese standards, including substance and transfer pricing compliance.
See Accounting & Tax Compliance in Malta for the full scope, or the Malta country page for the statutory framework across every service.
Figures as published on the HTLC Network country pages, reviewed September 2026 and collected from public sources. They are not a substitute for advice on a specific case and should be verified before being relied on.