Malta legal and accounting and tax considerations in 2024

• Tax rates

  

  1. The corporate tax rate in Malta is 35%. However, several refund routes on local and foreign sourced income are available, reducing the effective corporate tax rate to 10%;
  2. Capital Gains are also aggregated with corporate income and subjected to the corporate tax rate;
  3. There is no withholding tax levied on outbound dividends, interest payments and royalty payments;
  4. There is no additional remittance tax incurred on income earnt by a Maltese branch office;
  5. The standard VAT rate in Malta is 18%. However, reduced rates of 7%, 5% and 0% may apply to certain products.

• Tax filings

  1. A Maltese company must file tax returns and financial statements within 9 months from end of accounting year;
  2. Audit requirements are there for all companies in Malta. However, an exemption from audit applies if the balance sheet of a Maltese Private Company does not exceed the limits of 2 of the following 3 criteria: i) Total Assets €46,600 ii) Turnover €93,000. iii) Average number of employees during the accounting period are 2.
  3. Maltese companies may choose an accounting year, other than Jan- Dec, if they secure separate permission from the Inland Revenue Department;
  4. Consolidated financial statements are not permitted under Maltese law. All companies must file separate entity level returns;
  5. VAT filing and payment is done on a quarterly basis.

• Legal and compliance

  • Incorporation regulations

    1. A Maltese company can be incorporated with 1 director and 2 shareholders. There are no residency or nationality requirements for either directors or shareholders;
    2. All Maltese companies must have a local registered office and company secretary resident agent. If required, Healy Consultants will provide this service to our Clients;
    3. In October 2020, the Maltese authorities introduced a mandatory FDI approval requirement for all non-EU investors. The National Foreign Direct Investment Screening Office must be notified of all investments from non-EU companies/ individuals.
    4. All Maltese companies must open a capital account to deposit the minimum share capital amount before company incorporation can be approved;
    5. If our Clients wish to secure an EU VAT number, the management and control of the company must be in Malta.

  • Labour regulations

    1. All employers must pay 10% of their employees’ weekly salary to social security. Similarly, employers must also contribute 10% of weekly salary on employees’ behalf;
    2. Employers must withhold income tax from their employees’ salaries on a monthly basis;
    3. The maximum number of working days per week in Malta is 6 days. An employee working overtime is entitled to 1.5 times the regular wage;
    4. Annual paid leave of 24 days must be allowed to all employees with over 1 year of service;
    5. The minimum wage in Malta is €736 per month, which is higher than the federal minimum wage of US$7.25 per hour;
    6. A Maltese company can only propose fixed term contracts, including renewals for a maximum period of 2 years.