Malta Corporate Tax Guide 2026

Overview — Corporate Taxation in Malta

Malta taxes resident companies on their worldwide income at a flat rate of 35%. The tax year is the calendar year. Corporate tax returns must be filed by 30 June following the end of the tax year, with a possible 9-month extension. The Commissioner for Revenue (CFR) administers the system. Companies are required to make quarterly advance payments of tax based on the prior year's liability. The distinctive feature of the Maltese system is its full imputation and shareholder refund mechanism, which makes the jurisdiction highly attractive for international business structures.

Standard CIT Rate — 35% (Full Imputation)

The standard corporate income tax rate is 35% on chargeable income for all resident companies. Chargeable income is calculated as gross income less allowable deductions (operating expenses, depreciation, interest, and other business costs). Under the full imputation system, the 35% corporate tax paid is fully attributed to shareholders upon dividend distribution. When a company pays a dividend, the shareholder receives a tax credit (known as the Malta Tax Credit) for the corporate tax paid on the profits distributed. This avoids double taxation at the shareholder level.

Shareholder Refund System

The most distinctive feature of Malta's corporate tax system is the refund system available to shareholders after dividend distribution. After the company pays 35% CIT, non-resident shareholders (and in some cases resident shareholders) are entitled to claim a refund of a portion of the tax paid. The refund depends on the category of income from which the dividend was paid:

• Trading companies (5/7 refund): For dividends paid from trading income, the shareholder receives a refund of 5/7 of the corporate tax paid. This means the effective CIT rate on distributed profits is approximately 11.7% (35% × 2/7).
• Passive/holding companies (6/7 refund): For dividends paid from passive income (interest, royalties, rents) or holding company income, the refund is 6/7 of the tax paid. The effective rate is approximately 1.5% (35% × 1/7).
• Investment companies (2/3 refund): For dividends paid by investment companies, the refund is 2/3 of the tax paid. The effective rate is approximately 7.5% (35% × 1/3).

The refund is typically processed within 14 days of the refund claim being submitted to the CFR.

Participation Exemption

Malta offers a participation exemption on dividends and capital gains from qualifying shareholdings. A qualifying participation is generally a holding of at least 5% or an investment of at least EUR 1.16 million held for at least 183 days (continuous), where the subsidiary is resident for tax purposes (not domiciled in a blacklisted jurisdiction) and either engages in substantive economic activity, is subject to tax at a rate of at least 15%, or derives no more than 50% of its income from passive sources. The participation exemption effectively eliminates Maltese tax on such income.

Loss Carryforward

Tax losses can be carried forward indefinitely and offset against future profits. There is no carryback provision. However, if there is a change in ownership of more than 50% within a 3-year period, loss utilisation may be restricted unless the company continues to carry on substantially the same business. Losses from passive income sources may have limited offset against trading income.

FAQs

What is the effective tax rate for a trading company in Malta?

The effective tax rate for a trading company distributing dividends is approximately 11.7%, calculated as the 35% CIT paid less the 5/7 refund (35% × 2/7 = 10%, so the net tax retained is 10% of the profit, which equates to an effective rate of 11.7% when expressed as a percentage of pre-tax profit).

Does Malta have controlled foreign company (CFC) rules?

Malta has implemented CFC rules in line with EU Anti-Tax Avoidance Directive (ATAD) requirements. The rules target artificial arrangements designed to divert profits from related group companies located in low-tax jurisdictions.

Are dividends paid by a Maltese company subject to withholding tax?

No, Malta does not impose withholding tax on dividends paid to shareholders (resident or non-resident). This is a key advantage of the Maltese system, particularly when combined with the imputation refund mechanism.

Disclaimer

This guide provides general information about Maltese corporate tax (CIT) for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Maltese tax advisor or the CFR directly for advice specific to your business. InvestmentKit does not provide tax advice.