Paying Taxes in Malta

1. What is the corporate tax in Malta?

Companies that are registered in Malta are subject to a corporate tax rate of 5%. This percentage applies to the worldwide income and may be credited or abolished for foreign investors by the incentives of the Double tax Treaties signed all over the years by Malta.  If companies are owned by non-residents or by residents without domicile in Malta, the effective corporate tax becomes only 5% because companies pay a profit tax of 35% and the recipient of dividends receive 30% or 6/7.

2. What is the VAT in Malta?

When it comes to the VAT rate, Malta is subject to 18%, with certain exceptions. There is a 7% VAT rate applied for accommodation and a 5% VAT rate for electricity, confectionery or medical devices. An exempt from VAT rate is only for exportation, food, gold, medicine and international services.

3. How can the VAT be refunded in Malta?

In order to obtain a refund of the VAT in Malta as a EU member, you have to electronically submit a claim through the Malta VAT Department’s electronically portal. The entire procedure is completed online. First of all, you have to register electronically for an e-ID, which is an electronic identity. You then have to submit a VAT refund application and fill in with the information requested.

The non EU applicants must deliver the application, the original invoices and the VAT certificate

to the “Commissioner of VAT”.

The answer regarding the claim is given in maximum four months if the refund is granted, the money are delivered in maximum 10 days from the decision.

4. What is the dividend tax in Malta?

No dividend withholding tax is charged in Malta for dividends paid to nonresidents, when the company is not performing business activities in Malta and it’s not resident here.

5. Are there any incentives for foreign investors in Malta?

Malta encourages foreign investments and provides several fiscal incentives in order to attract new investors. This way, the incentives are about investment aid, access to finance or employment and training. Malta has signed numerous treaties of avoidance of the double taxation so the profits are not taxed in Malta, this measure encouraging the foreign investors to open new businesses here. Also, no withholding taxes on interests, royalties or dividends are charged. Also the branch remittances are not taxed.

6. Why do I need a local accountant for my business in Malta?

It is requested by law that a Maltese company keeps record of transactions and any financial activity at a registered office in Malta therefore it would be much easier for a local accountant to keep track of all this paperwork and do the accounting work in a more efficient way due to his or her experience.

BridgeWest offers Company Formation in Malta.