Malta taxes residents on worldwide income (Malta's system uses a distinctive full imputation system with a complex refund mechanism for shareholders on distributed profits, producing a low effective rate in many structures despite a 35% headline corporate rate) and non-residents on Malta-source income only. Malta operates a self-assessment system for corporate tax. Malta's headline corporate rate (35%) is among the highest in Europe, but a recent Tax Foundation comparison lists Malta alongside Hungary, Bulgaria, and Ireland as having among the lowest EFFECTIVE rates - the two are not the same thing, and the gap is driven entirely by the refund mechanism described above, not by a lower statutory rate.
The Maltese tax year is the calendar year. The individual filing deadline is generally 30 June of the following year.
Malta's headline corporate income tax (CIT) rate is 35%.
The headline personal income tax (PIT) rate is 35%.
The standard VAT/GST (or equivalent consumption tax) rate is 18%.
Personal tax residence in Malta is generally determined by domicile and location of a permanent home rather than a fixed day count, though a stay of around 183 days is commonly cited as a practical trigger. Companies registered in Malta are considered both resident and domiciled there, and are subject to Maltese tax on worldwide income and capital gains. Foreign-source income of Malta-resident-but-non-domiciled individuals is generally taxed only when remitted to Malta (broadly defined, including transfers to a Maltese bank account).
A non-Maltese entity has a Malta permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Malta on the entity's behalf, following the OECD Model Treaty definition as applied under Maltese domestic law and any applicable tax treaty.
Malta introduced CFC rules effective January 1, 2019, implementing EU ATAD. The regime applies where a Maltese taxpayer, alone or with associated enterprises, holds more than 50% of voting rights, capital, or profit entitlement in an entity (the control test) that also fails a low-taxation test. Malta's participation exemption separately shelters qualifying dividends and capital gains from a "participating holding" - broadly, at least 10% direct equity ownership in a non-Malta company, or a smaller stake held continuously for at least 183 days with sufficient investment.
Malta has no thin capitalization rules and no fixed debt-to-equity ratio - historically this made debt push-down structures (via assignment, transfer, or contribution) relatively straightforward. Since ATAD implementation, an interest limitation rule caps deductible exceeding borrowing costs at 30% of tax-EBITDA; the rule does not apply where borrowing costs do not exceed EUR 3 million, and financial undertakings are excluded. Unused interest capacity can be carried forward up to five years.
Malta does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Malta has implemented ATAD2-aligned anti-hybrid rules denying deductions for payments producing a hybrid mismatch outcome.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Malta provides a genuine participation exemption for qualifying dividends and capital gains from a "participating holding" - broadly, at least 10% direct equity ownership in a non-Malta company, or a smaller stake held continuously for at least 183 days with sufficient investment .
Malta has a real foreign tax credit regime available to both individuals and companies for foreign tax paid on foreign-source income also taxed in Malta, capped at the Maltese tax otherwise due on that income - operating alongside Malta's distinctive full-imputation refund system as an additional relief mechanism.
Malta maintains an extensive treaty network of 77 double tax treaties in force (per KPMG Malta), spanning most of Europe, major Asian and Gulf economies, and a growing set of African and Latin American partners. Malta signed and ratified the OECD's Multilateral Instrument (MLI), which modifies its covered treaties.