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Generic Tax Name Corporate income tax
Tax name in the national language Income Tax
Tax name in English Income Tax
Member State MT-Malta
Tax in force since 1948/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

Income Tax Act (Cap 123)

Income Tax Management Act (Cap 372)

plus subsidiary legislation

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments

 
Geographical Scope Malta.
 
Taxpayers
Domestic-source income of non-resident entities is Taxed
Not Taxed
Comments

Certain exemptions on capital gains on securities, interests and royalties apply.

 
Tax object and basis of assessment
As general rule, taxable income under corporate income tax includes also








Comments

Income considered Domestic income
Worldwide income (subject to double-tax relief)
Comments

Comments
 
Deductions, Allowances, Credits, Exemptions
Valuation of inventory
System First-in first-out (FIFO)
Last-in first-out (LIFO)
Average cost
Specific identification (unit method)

Comments

Depreciation rules
 
Buildings
System Straight-line method
Declining balance
Production method
Combination of above
Other
Not-depreciable

Comments

The annual straight line rate for industrial buldings and structures, including hotels, is 2%. Commercial buldings may not be depreciated.

Average depreciation period 50  Years
Average depreciation rate 2.0 %
 
Movable (tangible) assets
System Straight-line method
Declining balance
Production method
Combination of above
Other
Not-depreciable

Comments

Average depreciation rate

6.67 – 25.00%

Average depreciation period 10  Years
Average depreciation rate
 
Movable fixed assets
System Straight-line method
Declining balance
Production method
Combination of above
Other
Not-depreciable

Comments

Average depreciation rate

6.67 – 25.00%

Average depreciation period 8  Years
Average depreciation rate
 
Intangible assets
System Straight-line method
Declining balance
Production method
Combination of above
Other
Not-depreciable

Comments
Average depreciation period 3  Years
Average depreciation rate
 
Land (if any)
System Straight-line method
Declining balance
Production method
Combination of above
Other
Not-depreciable

Comments
Average depreciation period
Average depreciation rate


Comments

Only industrial buildings and hotels qualify for depreciation.


Are there limits to interest deductions? Yes No
If yes:
Definition of deduction limit

Comments

Is there an Allowance for Corporate Equity? Yes No
If yes:
Notional rate applied for allowance

Comments

Losses
Loss carry-forward exists? Yes No
If yes:
Time limit: Indefinite
 
Size limit:
 
Loss carry-backward exists? Yes No
If yes:
Time limit: Indefinite
 
Size limit:
 

Comments


Comments
 
Rate(s) Structure
Nominal corporate income tax rate Rate: 35.00 %

Central government surcharge Rate: 0.00 %
Regional government surcharge Rate: 0.00 %
Local government surcharge Rate: 0.00 %
Combined rate (all-in rate) Rate: 35.00 %


Comments

Special tax rate for SMEs
Special tax rates apply to SMEs: Yes No
If yes:
Nominal corporate income tax rate Rate:
Central government surcharge Rate:
Regional government surcharge Rate:
Local government surcharge Rate:
Combined rate (all-in rate) Rate:


Comments
 
International aspects
Treaty countries Non-treaty countries
 
Repatriated profits are taxed according to the following system Exemption system Exemption system
Tax credit Tax credit
Deduction Deduction
 
Interest received is taxed Yes No Yes No
Tax rate on interest received 35.00 % 35.00 %
Outgoing dividends withholding tax 15.00 % 0.00 %
Outgoing interest payments withholding tax 15.00 % 0.00 %
 
Foreign losses can be set-off Yes No Yes No
If yes:
Minimum direct or indirect shareholding to qualify loss-offset (if applicable)
 
Loss carry-forward exists? Yes No Yes No
If yes:
Time limit: Indefinite
 
Indefinite
 
Size limit:
 
Loss carry-backward exists? Yes No Yes No
If yes:
Time limit: Indefinite
 
Indefinite
 
Size limit:
 
Controlled foreign company (CFC-)rules exist? Yes No Yes No
If yes:
Time limit: Indefinite
 
Indefinite
 
Size limit:
 
Threshold for capital or voting power held directly or indirectly by resident in non-resident company
CFC-rules apply if foreign tax rate is lower than
CFC-rules apply for passive income only? Yes No Yes No

Comments   Treaty countries

Outgoing dividends withholding tax

0.00 – 15.00 %

Outgoing interest payments withholding tax

0.00 – 15.00 %


Comments   Non-treaty countries
 
Measures against profit shifting
 
Do Thin Capitalization (TC) rules exist? Yes No
If yes:
Date of first introduction
Introduced as Explicit TC law
Part of CIT law
Test for TC Ratio
Arm's length
If ratio
Value of numerical ratio:
Definition numerator
Definition denominator
 
Debt considered for test Internal
Internal and external
TC depends on shareholding? Yes No
Substantial shareholding threshold
 
Type of shareholding Direct
Indirect
Automatic remedy Yes No
Remedy Non-deductibility of interest
Reclassification as dividend
 
Rules apply to All companies
Foreign companies
Non-EU companies
Transfer pricing rules exists? Yes No
If yes:
Arm’s length principle applied? Yes No
 
Remedy Fee
Tax base increase
 
Tax due date

Generally any outstanding balance has to be paid by the tax return date (this varies according to the company's accounting period).

 
Tax collector

Tax is collected as much as possible in the year in which it arises through a number of systems:

-Provisional tax: payable by companies every 4 months; also paid at source on any capital gain.

-Withholding Tax and Tax at source: withheld at source on payments of interest and dividends.

Any remaining balances of tax due are paid by the due date as mentioned above.

 
Special features
 
Economic function







Comments

 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d51oa (d51ba + d51c2a)

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 431.05 EUR 5.96
2011 388.29 EUR 5.64
2010 378.53 EUR 5.74
2009 365.18 EUR 5.95
2008 362.99 EUR 5.92
2007 346.78 EUR 6.02
2006 221.56 EUR 4.11
2005 190.50 EUR 3.71
2004 167.51 EUR 3.44
2003 193.55 EUR 4.04
2002 157.15 EUR 3.32
2001 140.29 EUR 3.09
2000 145.16 EUR 3.30

Comments