Malta Corporate Tax - Guide for International Expansion

Malta is a small island nation in the Mediterranean Sea, strategically positioned between Europe and North Africa. Understanding the corporate tax landscape is crucial for businesses considering expansion to this EU member state.

Whether you're exploring Malta as a base for European operations or evaluating its attractive business environment, grasping the corporate tax requirements will help you make informed decisions. Wise Business can support your expansion with local EUR accounts and seamless international payment solutions to manage your Malta operations efficiently.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Malta Corporate tax rate in 2025

Malta has a corporate income tax rate of 35% for resident companies.¹ However, Malta operates a unique full imputation system that can significantly reduce the effective tax rate for shareholders through refunds of up to 6/7ths of the tax paid, bringing the effective rate down to as low as 5% in certain circumstances. ²

Non-resident companies are subject to tax only on Malta-sourced income at the standard 35% rate.³ Malta also offers various incentives and special regimes for specific types of businesses, including holding companies and trading companies, which can benefit from reduced effective tax rates through the refund system.³

Companies resident in Malta are taxed on their worldwide income, while non-resident companies are only taxed on income arising in Malta or received in Malta.⁴

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How to pay corporate tax in Malta

Corporate tax in Malta must be paid in Euros (EUR), as Malta is part of the Eurozone. Companies are required to file annual tax returns and make payments to the Malta Tax Authority (previously Inland Revenue Department).⁵

The corporate tax year in Malta is based on a company's financial year-end. Companies must file their tax returns within nine months of their financial year-end, with an electronic filing extension until July 31 for those with a year-end between January 1 and June 30. Provisional tax payments are typically required on April 30, August 31, and December 21, and are based on the previous year's tax liability.^{6 7}

Malta operates a self-assessment system where companies calculate their own tax liability. Late filing penalties apply, and interest is charged on overdue tax payments at rates set by the Commissioner for Revenue.⁸

Let's calculate the annual tax due for a company with a turnover of €1.5 million. Assuming a profit margin of 10%, the taxable profit would be €150,000.

At Malta's standard corporate tax rate of 35%, the initial tax owed would be:

€150,000 × 35% = €52,500

However, under Malta's refund system, shareholders may be entitled to refunds of 6/7ths of the tax paid (approximately 85.7%), which would result in a refund of approximately €45,000, making the effective tax rate around 5%.

When expanding your business to Malta, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to expand internationally with local EUR account details. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Malta

Some essential steps to keep your company fully compliant with Maltese tax regulations are:

• File annual returns on time: All companies must prepare an annual return each year, to be submitted within 9 months from the end of the company's financial year. made up on the anniversary of their registration. Depending on authorised share capital, a filing fee between EUR 100 and EUR 1,400 must be paid along with the return.⁶
• Submit annual accounts: Annual accounts must be approved within 10 months from the end of the financial year. Companies can file corporate tax returns online for added convenience. Small companies may need to submit additional forms, such as Form DD4 with their first accounts and Form DD3 for subsequent filings.⁹
• Comply with corporate tax rules: Companies are subject to Malta’s standard corporate tax rate of 35%, although the effective corporate tax rate can be significantly lower due to Malta’s tax refund system.⁴ This makes Malta more competitive than other jurisdictions, including countries with zero corporate tax, while complying with EU standards.
• Appoint directors and a company secretary: Every public company in Malta must have at least two directors, while private companies require at least one director. All companies must also appoint a company secretary with the knowledge and experience to handle compliance. However, the secretary does not need to be a Malta resident.

International Expansion to Malta

Are you thinking about expanding your business to the Mediterranean? Malta brings an attractive mix of strategic location, robust economic growth, and business-friendly policies.

The country’s GDP stands at $25.75 billion.¹⁰ Its economy is also on a steady growth path, expected to expand by 4.1% in 2025 and 4.0% in 2026. Its labour market is stabilising, inflation is slowing, and the government deficit is projected to decline below 3% of GDP.¹¹ All of these factors make the environment suitable for sustainable business operations.

On top of it, Malta ranks tenth in the European Union in GDP per capita at €39,500, above the EU average of €37,600.¹² Being part of the EU provides businesses in Malta with easy access to a single market of over 440 million consumers.¹³ A stable currency, the Euro, combined with renewed geopolitical relevance in the Mediterranean, adds to Malta’s appeal for international companies. The country also benefits from a strong domestic consumption rate, with key sectors like accommodation, financial services, and information and communication seeing significant growth.

Tourism further strengthens Malta’s economy, with 3.56 million visitors in 2024 generating €3.3 billion in total expenditure.¹⁴ This thriving tourist market opens opportunities for services, hospitality, and related industries. The process to establish a business in Malta is as follows:

1. Conduct Market Research: Understand demand, competition, and customer preferences in Malta.
2. Develop a Business Plan: Outline forecasts, pricing, and operations for the Maltese market.
3. Choose a Business Name: Pick a unique, compliant name.
4. Secure a Business Location: Establish a physical presence in Malta.
5. Register with the Registrar of Companies: Submit documentation to incorporate legally.
6. Register for Tax: Obtain a VAT number and register for corporate tax compliance.
7. Open a Local Bank Account: Manage financial operations locally.
8. Leverage the Corporate Tax Refund System: Take advantage of Malta’s tax refund system and attractive corporate tax rates.

For a comprehensive guide on starting a business in Malta, check out the practical resources here. They explain the full process of incorporation, tax registration, and corporate compliance.

Read more about the corporate tax in United States

Incorporation of Business in Malta

To incorporate a business in Malta, you must register with the Malta Business Registry (MBR). Setting up a company requires several key pieces of information and compliance steps:

• Company Name: Search for a unique name at BAROS.
• Type of Company: Decide on the legal structure, as explained below.
• Company Constitution: A legal document outlining the rules for managing your company.
• Registered Office: A physical address in Malta where official communications can be sent.
• Directors: Individuals appointed to manage the company on behalf of the shareholders.
• Company Secretary: A person responsible for ensuring compliance with corporate filings and annual returns.
• Authorised and Issued Share Capital: The maximum share capital the company can issue to shareholders.
• Shareholders: The owners of the company.

Malta is set to introduce a new corporate tax regime by 2025, moving away from the current imputation system. This overhaul aims to modernise and align the tax framework with international standards. While specific details are yet to be finalised, businesses should stay informed about these changes to ensure compliance and optimise tax planning strategies.

Types of Business Entities

According to Malta’s Companies Act 1995, Chapter 386, Malta offers several types of business entities suitable for different purposes:¹⁵

• Private Limited Company (Ltd): The most common entity for private and commercial businesses. Shareholders have limited liability. Requires at least one director and a company secretary.
• Public Limited Company (PLC): Suitable for businesses aiming to list on a stock exchange. Requires at least two directors, and there’s no limit on shareholders.
• Single-Member Company: Allows a single individual to act as both shareholder and director while benefiting from limited liability.
• Partnerships: This category includes general partnerships and limited partnerships, which are typically used for smaller ventures or professional services. Liability rules vary depending on the type of partnership.
• Non-Profit Entities: These entities do not have shareholders or share capital, making them ideal for charities, social clubs, or associations.

Complying with corporate income tax rules in Malta and using its tax frameworks can help optimise operations and benefit from its favourable corporate tax regime.

International corporate tax best practices

Successful international tax management requires a strategic approach that balances compliance with efficiency. Companies operating across borders should prioritise staying current with local tax regulations while leveraging legitimate opportunities to optimise their tax position.

Maintaining comprehensive and transparent financial records is essential for accurate tax reporting and successful audits. This includes proper documentation of transfer pricing, intercompany transactions, and the substance of business operations in each jurisdiction.

Understanding and utilising double taxation treaties can prevent the same income from being taxed twice. Malta has an extensive network of double taxation agreements with over 70 countries, which can provide significant benefits for international businesses.

Companies should also consider the impact of international tax initiatives such as the OECD's Base Erosion and Profit Shifting (BEPS) framework and Pillar Two global minimum tax rules, which may affect their overall tax strategy and compliance requirements.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Malta efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Malta

Who is liable for corporate tax in Malta?

All companies incorporated in Malta are considered resident for tax purposes and are liable for corporate tax on their worldwide income at 35%. Non-resident companies are only taxed on Malta-sourced income. Partnerships and sole traders are subject to income tax rather than corporate tax.

Are there any tax incentives for businesses in Malta?

Yes, Malta offers several tax incentives, including the full imputation system that provides refunds to shareholders, reducing effective tax rates significantly. There are also specific regimes for holding companies, trading companies, and companies engaged in intellectual property activities. EU companies may benefit from participation exemptions on dividends and capital gains.

What is the tax treatment of dividends in Malta?

Dividends paid by Malta resident companies are generally not subject to withholding tax. Instead, Malta operates a full imputation tax system where the tax paid by the company is attributed to the shareholder. Under this system, shareholders can claim a refund on a portion of the tax, which can significantly reduce the effective tax rate on distributed profits to as low as 5%.

What is the process for registering for corporate tax in Malta?

Companies must register with the Malta Business Registry and obtain a tax identification number from the Commissioner for Revenue. Registration should be completed within 30 days of commencing business activities. Companies must also register for VAT if their turnover exceeds the threshold of €35,000 annually.

What are the common pitfalls to avoid regarding corporate tax in Malta?

Common mistakes include failing to understand the refund system mechanics, inadequate substance requirements for claiming treaty benefits, poor transfer pricing documentation, and missing filing deadlines. Companies should also ensure they maintain proper records to support their tax positions and comply with anti-avoidance rules.

Sources used in this article:

1. Tax Foundation: Corporate Tax Rates by Country 2024
2. KPMG: Malta Tax System
3. KPMG: Malta Tax System (PDF)
4. MTCA: Business Tax - Corporate Tax
5. MyTax.mtca.gov.mt
6. MTCA: Business Tax - Corporate Income Tax
7. NCMB.eu: Understanding the 2025 Financial Reporting Deadlines
8. PwC Tax Summaries: Malta Corporate Tax Administration
9. Malta Business Registry: Formation and Registration of Companies
10. IMF: Malta Country Profile
11. European Commission: Economic Forecast Malta
12. European Union: Facts about Malta
13. European Commission: About Malta and the EU
14. Malta Transport Authority: Legislation
15. WIPO: Legislation on Corporate Law

Sources last checked 08/09/2025