Refund claims increasingly turn on evidence that commercial decisions are genuinely taken in Malta. What documentation supports the claim, and what undermines it.
- Three distinct refund fractions
- Increased substance scrutiny
- What does Malta mean by "substance" for refund purposes?
This system has been legally and politically vetted for decades, but it has also drawn increased scrutiny in 2026: Maltese tax authorities have tightened requirements around "letterbox" companies, requiring genuine evidence that commercial decisions are made in Malta, alongside stricter Controlled Foreign Company and transfer pricing documentation rules. Companies relying on the refund system without demonstrable local substance face a real risk of refund denial and investigation.
What a company pays in Malta. Every figure below is published on the Malta country page.
| Malta | |
|---|---|
| Official language | Maltese, English |
| Legal forms | Private limited company · Public limited company |
| Employer social security | Fixed weekly amount, matched by employer — up to ~€50/week each (2026), not percentage-based |
| VAT rate | 18% standard — among the lowest in the EU |
| Minimum directors | 1 for private companies, 2 for public companies — non-resident company secretary permitted |
What makes it complex in Malta
- 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.
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.
Three distinct refund fractions 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.