Malta Legal Research
Malta Tax Law
Research Maltese tax law, the Income Tax Act (Cap. 123), corporate taxation, and VAT with AI-powered search across the full statute book and 80,000+ court judgments.
What LexMT covers
- Income Tax Act (Cap. 123) and Income Tax Management Act (Cap. 372)
- Value Added Tax Act (Cap. 406) and Duty on Documents Act (Cap. 364)
- 80,000+ Malta court judgments including Administrative Review Tribunal tax decisions
- Subsidiary legislation, Commissioner guidelines, and tax ruling practice
Key concepts in Malta tax law
Income Tax Act (Cap. 123)
The Income Tax Act governs taxation of income and capital gains. Malta taxes residents on worldwide income; non-residents on Malta-source income. The full imputation system provides tax credits on distributions to eliminate double taxation.
Corporate Tax Refunds
Shareholders of Malta companies may claim refunds on tax paid by the company: 6/7ths on trading income (5% effective), 5/7ths on passive income (10% effective), or 2/3rds on certain royalties. Refunds typically process within 14 weeks.
VAT (Cap. 406)
The Value Added Tax Act implements EU VAT directives. The standard rate is 18% with reduced rates of 7%, 5%, and 0% for specific supplies. Malta operates the VAT margin scheme for second-hand goods and special schemes for travel agents.
Stamp Duty
The Duty on Documents and Transfers Act (Cap. 364) imposes stamp duty on property transfers (5%), share transfers (2%), and insurance premiums. Exemptions apply for reorganisations and intra-group transfers meeting conditions.
Special Tax Regimes
Malta offers special regimes including the Highly Qualified Persons Rules (15% flat rate), Qualifying Employment in Innovation and Creativity (15%), Global Residence Programme, and Malta Retirement Programme for non-EU nationals.
Transfer Pricing
Malta applies the arm's length principle to related-party transactions. Companies must document transfer pricing policies. The Income Tax Act empowers the Commissioner to adjust non-arm's length transactions. Malta has over 70 double tax treaties.
Frequently asked questions
What is the corporate tax rate in Malta?
Malta's corporate tax rate is 35%. However, shareholders may be entitled to tax refunds of 6/7ths, 5/7ths, or 2/3rds on distribution, resulting in an effective rate as low as 5% for certain income. The full imputation system ensures no double taxation.
How does Malta's tax refund system work?
Malta operates a full imputation system. When a company pays 35% tax and distributes dividends, shareholders receive tax credits. Non-resident shareholders may claim refunds: 6/7ths refund (reducing effective tax to 5%) for trading income, 5/7ths for passive income, or 2/3rds for certain passive royalties.
What is the VAT rate in Malta?
Malta's standard VAT rate is 18%. Reduced rates apply to certain supplies: 7% for accommodation, 5% for electricity, confectionery, and printed matter, and 0% for food, pharmaceuticals, and exports. Registration is mandatory above EUR 35,000 annual turnover.
What personal income tax rates apply in Malta?
Malta's personal income tax is progressive: 0% up to EUR 9,100, then 15%, 25%, and 35% at higher thresholds. Non-domiciled individuals pay tax only on Malta-source income and remittances, with a minimum tax of EUR 5,000 under the remittance basis.
What is the Highly Qualified Persons tax regime?
The Highly Qualified Persons Rules provide a flat 15% tax rate for eligible professionals in financial services, gaming, aviation, and other sectors. The regime requires a minimum EUR 96,468 annual salary and Malta tax residence. Benefits last up to 5 years.