Corporate Income Tax
35% on taxable profits
Income Tax Rate
- 8,500: 0
- 8,501 – 14,500: 15
- 14,501 – 60,000: 25
- 60,001 and over: 35%
Income Tax rates depend on income level and family situation. Take into account any tax allowances and deductions that employees are entitled to for certain types of expenditure.
The employer deducts income tax and social-security contributions from employees’ wages, daily allowances or other remuneration.
The following individuals do not have to file a tax return: Maltese residents whose total annual income consists solely of income from which tax was deducted at source and individuals who are not taxable.
These two categories of people will receive a tax statement, which can be challenged within 30 days of receipt. All other people must file a return by <strong>30 June</strong>.
Royalties and other payments 35%
Capital Gain Tax: 7% (provisional tax) or 12% (final tax), calculated on sales price
Time to prepare and Pay Taxes
Employers Social Security and statutory contributions
10% calculated on gross salary
Employees Social Security and statutory contributions
10% calculated on gross salary (withheld)
In 2015, Malta made starting a business easier by creating an electronic link between the Registrar of Companies and the Inland Revenue Department to facilitate issuance of a tax identification number.
A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Malta. Under Maltese Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country.
Local Payroll Administration
In some cases, a company will register their business in Malta under one of the forms available: Limited liability company, Partnership en nom collectif; and Partnership en commandite; but prefer to have another company administering its payroll. This can be accomplished through a payroll provider.
It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Larger companies with a commitment to Malta may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Maltese payroll, and can fulfil all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Maltese employment laws.