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Year of assessment 2014 (basis year 2013)

Company rate of tax – 35%

Company tax is fully credited to shareholders on distribution of profits and, depending upon the business activity from which the profit has been generated, recipients of dividend income may become entitled to refunds of company tax paid. In certain circumstances, these refunds reduce the effective tax burden on distributed profits to between 0% and 10%. It is not the purpose of this publication to provide a full and detailed description of the corporate tax system in Malta. Further details are available upon request.

Resident married couples opting for joint computation

Taxable income Tax
Rate Deduct
0 – 11,900 0% €0
11,901 – 21,200 15% €1,785
21,201 – 28,700 25% €3,905
28,701 – 60,000 32% €5,914
Over 60,001 35% €7,714

Resident parents not qualifying/opting for joint computation

Taxable income Tax
Rate Deduct
0 – 9,300 0% €0
9,301 – 15,800 15% €1,395
15,801 – 21,200 25% €2,975
21,201 – 60,000 32% €4,459
Over 60,001 35% €6,259

Resident single individuals and married couples opting for separate computation

Taxable income Tax
Rate Deduct
0 – 8,500 0% €0
8,501 – 14,500 15% €1,275
14,501 – 19,500 25% €2,725
19,501 – 60,000 32% €4,090
Over 60,001 35% €5,890

Non-resident individuals (married or single)

Taxable income Tax
Rate Deduct
0 – 700 0% €0
701 – 3,100 20% €140
3,101 – 7,800 30% €450
Over 7,801 35% €850

Employment outside Malta – 15%

Excluding any service on board a ship, aircraft or road vehicle owned, chartered or leased by a Maltese company and any service for the Government of Malta

Employment income earned by expatriates in respect of activites carried out in Malta – 15%

Subject to certain conditions

Returned Migrants

Married Single
First €5,900 – 0% First €4,200 – 0%
Excess – 15% Excess – 15%

Subject to a minimum annual tax liability of €2,325 after double taxation relief Local earned income is taxed at resident rates without the tax free bracket

Residence permit holders (1988 scheme) – 15%

Subject to a minimum annual tax liability of €4,192 after double taxation relief

High Net Worth Individuals – 15%

Subject to a minimum annual tax liability of €20,000 after double taxation relief and an additional €2,500 for each dependent (applicable to EU/EEA, Swiss Nationals)

Global Residence Programme Rules – 15%

Subject to a minimum annual tax liability of €15,000 (applicable only to Non-EU/Non-EEA, Non-Swiss Nationals)

Malta Retirement Programme Rules – 15%

Subject to a minimum annual tax liability of €7,500 after double taxation relief and an additional €500 for every dependent and carer (applicable to EU/EEA, Swiss Nationals)

Capital Allowances

Asset type Maximum – %
Computers and electronic equipment, computer software Aircraft interiors and other parts 25
Motor vehicles, other machinery 20
Air-conditioners
Communication and broadcasting equipment Catering equipment
Equipment used for construction of buildings and excavation
Equipment mainly designed or used for the production of water or electricity
Medical equipment
Aircraft airframe, engines and/or airframe overhaul
16.67
Furniture, fixtures, fittings and soft furnishings, ships and vessels, lifts and escalators, and other plant 10
Electrical & plumbing installations and sanitary fittings 6.67
Cable and pipeline infrastructure 5
Industrial buildings and structures 2

Personal Tax Deductions

Alimony payments to estranged spouse Maximum – €
(actual amount paid)
School fees
– Secondary school
– Primary school
– Kindergarten
– Facilitator services
€2,300
€1,600
€1,300
€9,320
Child care fees €1,300
Homes for the elderly and the disabled fees €2,500
Sports fees €100
Cultural activities €100
Tertiary education institution fees As may be
prescribed subject
to certain conditions

Social Security Contributions

Rate Minimum Maximum
Employed persons (born up to 31 December 1961)
– deductible from emoluments
– payable by employer
10%
10%
€16.221
€16.22
€33.90
€33.90
Employed persons (born from 1 January 1962 onwards)
– deductible from emoluments
– payable by employer
10%
10%
€16.221
€16.22
€40.32
€40.32
Self-occupied and self-employed persons
– born up to 31 December 1961
– born from 1 January 1962 onwards
15%
15%
€23.65
€23.65
€50.85
€60.47
Full time Farmers
– born up to 31 December 1961
– born from 1 January 1962 onwards
10%
10%
€18.57
€18.57
€33.90
€40.32
No. of contributions due in 2013 April 17th August 17th December 18th

Maximum two-thirds social security pension (pensions commencing in 2013) – €226.43 per week

Provisional Tax

Provisional tax on transfers of immovable property and securities
– Not applicable to transfers of immovable property subject to final tax
– A lower or nil rate may be authorised
7% of consideration
Provisional tax on profits of companies, self-employed/self-occupied persons
– 1st instalment:
– 2nd instalment:
– 3rd instalment:
20% of benchmark
30% of benchmark
50% of benchmark
Provisional tax on part-time self-employment 15% of profits
Provisional stamp duty on transfers of immovable property(payable on the preliminary deed) 1% of transfer value

Withholding Tax2’3

Income arising in Malta
Payments to residents Payments to non-residents
Investment income (as defined) 15%4 Dividends, interest, royalties, discounts and premiums NIL
Part time work (as defined) 15% Capital gains on transfers of certain securities NIL
Dividends out of the untaxed account 15% Other income paid to a non-resident company 35%5
Dividends out of the untaxed account 15% Other income paid to a non-resident company 35%5
Dividends out of profits that had been taxed at 32.5% 2.5% Other income paid to other non-resident persons 25%6

1 Or if the employee chooses, 10% of the weekly wage.

2 Foreign withholding tax on income derived by a resident of Malta and arising in a treaty country is regulated by the respective treaty provisions.

3 Some withholding taxes are final in nature; others are provisional tax deductions with final tax due being determined at end of year

4 Options exist to receive investment income without withholding tax and subject to normal rates of tax instead

5 A lower or nil rate may be authorised

6 Chargeable on consideration but may be charged on the gain in certain areas. Transferor may, in certain circumstances, opt to be taxed at standard rates on the gain made on the transfer

Transfers of immovable property (final tax)
Property that had been acquired through inheritance or partition prior to 1992 7%
Restored property (subject to certain conditions) 10%
Other property 12%

Double Taxation Treaties in Force

as at 31st December 2012
Albania Croatia Germany Jersey Malaysia Romania Switzerland
Australia Cyprus Greece Jordan Montenegro San Marino Syria
Austria Czech Rep. Hong Kong Korea (Rep.of) Morocco Serbia Tunisia
Bahrain Denmark Hungary Kuwait Netherlands Singapore U.A.E.
Barbados Egypt Iceland Latvia (Rep.of) Norway Slovakia U.K.
Belgium Estonia India Lebanon Pakistan Slovenia U.S.A.
Bulgaria Finland Ireland Libya Poland South Africa
Canada France Isle of Man Lithuania Portugal Spain
China Georgia Italy Luxembourg Qatar Sweden

Taxation of Fringe Benefits

Category 1 – Use of business car

Annual fringe benefit value = Car value X percentage established as follows
Car Value – € Motor vehicles less than 6 years old Motor vehicles more than 6 years old
With fuel No fuel With fuel No fuel
0 – 16,310 6.90% 6.00% 4.80% 3.90%
16,311 – 21,000 9.20% 8.00% 6.40% 5.20%
21,001 – 28,000 11.50% 10.00% 8.00%v 6.50%
28,001 – 32,620 13.50% 11.00% 10.00% 7.50%
32,621 – 46,600 14.85% 12.10% 11.00% 8.25%
Over 46,600 16.20% 13.20% 12.00% 9.00%

Category 2 – Allowance for use of employee-owned car

Allowance – € Fringe benefit
0 – 2,330 50% of the allowance
More than 2,330 The cash allowance less €1,170

Category 3 – Use of other business assets

Accommodation

– 5% of the higher of the market value and the original cost of the property

– Fringe benefit value is increased by the cost of making the property available for use (e.g. water & electricity, repairs etc)

Use of other assets

– 12% of the higher of the market value and the original cost

– The original cost is reduced by 40% in the case of assets that are more than 6 years old

Category 4 – Any other benefit or facility

Generally, the actual cost to the employer or the market value, saving special rules and exemptions

Euro Foreign Exchange Rates

as at 31st December 2012
US – $ 1.2848 Yen – ¥ 102.49
GB – £ 0.8109 CHF 1.2053

Index of Inflation

Year Index Year Index
1946 100.00 2006 703.88
2000 607.07 2007 712.68
2001 624.85 2008 743.05
2002 638.54 2009 758.58
2003 646.84 2010 770.07
2004 664.88 2011 791.02
2005 684.88 2012 810.16

Statutory dates for the year 2013

Income Tax

Filing of income tax return Individuals
– Tax return and self assessment
30 June 2013
Companies and other bodies of persons
– Accounting date 30 June or earlier
– Accounting date later than 30 June
1 April 2013
The last day of the 9th month after the accounting date (or next working day)
Payment of settlement tax On tax return date
Payment of provisional tax by self-employed / self-occupied persons 30 April 2013
31 August 2013 21 December 2013
Payment of provisional tax for part-time self-employment 30 May 2013
30 September 2013
30 June 2014
Monthly remittance of FSS and social security contributions deducted by employers The last working day of the following month
Payer’s Annual Reconciliation Statement (FS7)
Social Security Contributions
Social security contributions by self-employed/ self-occupied persons
15 February 2014
On the provisional tax payment dates
Company Statutory Filing
Private companies
Annual Return
42 days after the anniversary of Registration
Financial Statements
10 months + 42 days after the accounting reference date
Public companies 42 days after the anniversary of Registration 7 months + 42 days after the accounting reference date

Value Added Tax

Filing of the Value Added Tax Return

– persons registered under Article 10 (Form 003) the 15th day of the 2nd month following the month during which the tax period ends
– persons registered under Article 11 the 15th day of February of the following calendar year
– persons registered under Article 12 (Form 004)
(Form 005)
the 15th day of the month/second month following the date on which the transaction (goods/services) becomes chargeable to Maltese VAT
Annual


Recapitulative Statement

– Goods the 15th day of the month following the relative calendar month
– Services Quarterly
8th Directive Refund 30 September of the calendar year following the refund period
Standard rate 18%
Accommodation in hotels and licensed premises 7%
Supply of electricity, importation of works of art, collector’s items and antiques, certain confectionery, medical accessories, printed matter, items for exclusive use of the disabled, domestic care services, minor repairs of bicycles, shoes, leather goods, clothing and household linen, and admission to museums, art exhibitions, concerts and theatres. 5%
Exports, intra-community supplies and international transport, supplies of brokers and other intermediaries, supply and repair of commercial aircraft and sea vessels, duty free supplies, food, pharmaceuticals, transport, investment gold, goods under a customs duty suspension regime, andthe supply of goods on board cruise liners. 0%
Immovable property, non-commercial rent, services by non-profit-making organisations, insurance, banking and investment services, sports, religious and cultural activities, lotteries and public postal services, health, welfare, education, public broadcasting, the supply of waterby a public authority and letting of space for artistic and cultural
activities.
exempt

Registration threshold

Type of activity Entry threshold Exit threshold
– Supply of goods €35,000 €28,000
– Supply of services with a relatively low value added €24,000 €19,000
– Other €14,000 €12,000

Businesses whose turnover falls below the above registration thresholds are obliged to register as an exempt small undertaking unless they opt for a normal VAT registration or unless they have an annual turnover of less than €7,000.

Intra-Community Acquisitions threshold €10,000
Distance Sales threshold €35,000

Stamp Duty

Inter vivos transfers
Immovable property 5%
Shares in property companies 5%
Other securities 2%
Auction sales 2.6%

Transmissions causa mortis (succession)
Immovable property 5%
Shares in Maltese property companies 5%
Shares in other Maltese companies 2%
Other assets Nil

Emphyteutical grants (duty payable as a percentage of ground-rent)
– for not more than 10 years 12%
– 10 to 25 years 33%
– 25 to 50 years 65%
– 50 to 75 years 80%
– 75 to 100 years 95%
– 100 years & over 100%
(Different rates may apply where the ground-rent is subject to revision or increase.)

Insurance policies
Life 0.1% of the sum assured
Other (except aviation,marine cargo, hull or boat credit and suretyship and medical cover) 10% of the premium
(Minimum €11.65 or 10% if premium is less than €11.65)