Consumption taxes

Nature of the tax

Value Added Tax

Tax rate

18%

Reduced tax rate

A reduced tax rate of 7% is applicable to hotels and electricity. Medicines, food products, banking and insurance products are not subject to VAT.

Other consumption taxes

Excise duty is applicable on the import of certain products like fuel, vehicles, cigarettes and alcohol. The exhaustive list of products subject to excise duty can be seen on the website of the Customs office.
More detailed information on excise duties is available concerning alcoholic beverages, tobacco products, energy products on the European Commission website.

Corporate taxes

Tax rate

Capital gains taxation

Companies are taxed on the transfer of securities, business goodwill, copyrights, patents, trademarks and trade names and on the assignment of ownership rights over such properties.

Main allowable deductions and tax credit

The legislation provides incentives to qualifying companies that undertake certain target sector activities specified in the law (some manufacturing activities, R&D, production of films etc.). The principal tax incentives provide reduced taxation rates and investment tax credits. Expenses are deductible for depletion and depreciation, net operating losses, payment to foreign associates, some taxes...

Other corporate taxes

Stamp duties and social security contributions exist.

Individual taxes

Tax rate

Allowable deductions and tax credit

The Business Promotion Act allows for certain deductions or exemptions for income tax purposes to eligible individuals, mainly individual members of a partnership. Malta has enacted Incentives for expat financial services professionals. For more information, consult the Highly Qualified Persons Rules, 2011.

Special expatriate tax regime

The term 'expatriate' is not defined by the Income Tax Acts. Temporary residents and persons who are neither ordinarily resident nor domiciled in Malta pay income tax on income arising in Malta. A guide to taxation for expatriates can be found at the following website: The Malta Institute of Accountants

Double taxation treaties

Countries with whom a double taxation treaty have been signed

See the list of double Taxation Treaties

Withholding taxes

There is no tax on dividends, interest and royalties.

Bilateral agreement

Malta and Tunisia are bound by a double taxation treaty: yes

Sources of fiscal information

Tax Authorities

IRD

Other domestic resources

Malta Taxation Center
Consult Taxation trends in the European Union.