Malta Tax Calculator: Calculate Your Individual Savings as an International Entrepreneur

Why I Discovered Malta as a Tax Haven

Three years ago I was sitting in my Hamburg office, staring at my tax return. 42% income tax plus solidarity surcharge—making it almost 45% of my hard-earned money going straight to the tax office. I thought to myself, “There has to be a better way.”

Malta was the answer. Not for the sun (although that’s definitely a bonus), but for having one of the smartest tax systems in Europe. With the Malta Tax Calculator you can work out in just a few minutes how much tax you could actually save as an international entrepreneur.

But beware: Malta isn’t a quick-fix tax avoidance paradise. The system is complex, legal, and requires genuine substance. Let me show you how to interpret the numbers correctly.

Malta vs. Germany: The First Reality Check

A German entrepreneur with €500,000 annual profit pays roughly 32% tax in Germany (30% corporate tax + trade tax + solidarity surcharge). In Malta? Effectively between 5% and 35%—depending on structure and payout strategy.

The difference is the Full Imputation System, which makes Malta unique in the EU. Simply put: You pay the full 35% corporate tax upfront, but when distributing to non-Maltese shareholders, you get up to 6/7 of that back.

Who Should Use the Malta Tax Calculator?

• International entrepreneurs with at least €200,000 annual profit
• Holding companies for subsidiaries and license revenues
• Digital nomads with substantial online businesses
• Investors with capital gains outside Malta
• Consultants and freelancers with an international client base

If your annual profit is below €100,000, don’t bother. Legal and tax advisory costs in Malta will eat up your savings.

The Maltese Tax System: More Than Just 35% Corporate Tax

This is where it gets interesting—and complicated. Malta’s tax system is built on three pillars that together determine your final tax burden. Without understanding these, any tax calculator will spit out useless numbers.

The Three Pillars of the Malta Tax System

The Full Imputation System Explained

Imagine your Maltese company makes €100,000 profit. First, you pay €35,000 corporate tax—Malta pockets 35%. Sounds expensive so far.

Here’s the catch: If you, as a non-Maltese shareholder, distribute a dividend, you get back part of the tax already paid depending on the profit category:

• Trading Income (active business): 6/7 refund = 5% effective tax
• Passive Income (interest, royalties): 5/7 refund = 10% effective tax
• Capital Gains (disposal gains): 6/7 refund = 5% effective tax

Want a quick calculation? On €100,000 trading income, you pay €35,000 corporate tax but get €30,000 back. You’re left with €5,000—that’s a 5% effective tax burden.

Malta Non-Dom Status: Your Tax Advantage Booster

As a Non-Dom (non-Maltese national with Maltese tax residency) you only pay tax on income earned in Malta or remitted to Malta. Foreign income kept abroad? Tax-free in Malta.

What does that mean in practice? Your German property, your Swiss stock portfolio, or your US Amazon FBA profits are ignored—so long as you don’t transfer the money to Malta.

Caution though: Germany, Austria or Switzerland could still tax you if you’re still liable there. Malta tax optimisation only works with a clean exit from your former tax jurisdiction.

Malta Tax Calculator: How to Work Out Your Real Tax Burden

Now it gets practical. A solid Malta Tax Calculator doesn’t just use the 35% headline rate; it considers all refunds, allowances, and your specific Non-Dom status.

What Inputs Do You Need for a Realistic Calculation?

1. Type of business and profit categories
   • Trading Income (active business)
   • Passive Income (license fees, interest)
   • Foreign Source Income (foreign income)
2. Planned payout strategy
   • Immediate dividend vs. retention
   • Timing of profit distribution
3. Personal status
   • Malta Non-Dom eligibility
   • Other tax obligations (Germany, etc.)
4. Holding structure
   • Direct shareholding vs. holding company
   • EU parent company or non-EU

The Critical Calculation Steps in Detail

A good Malta Tax Calculator follows this formula:

Effective Tax Burden = (Corporate Tax – Refund + Income Tax on Dividends) / Gross Profit × 100

Sounds simple but can be tricky. The refund depends on the type of profit, income tax depends on your Non-Dom status, and withholding tax depends on double taxation agreements.

Why Most Online Calculators Are Useless

I’ve tested at least ten “Malta Tax Calculator” tools. Nine of them were rubbish because they:

• Only show the 35% corporate tax (ignoring refunds)
• Don’t factor in Non-Dom status
• Ignore holding structures
• Use out-of-date tax rates
• Disregard double taxation agreements

My tip: Only use calculators for rough orientation. For your final decision, you need a Maltese tax advisor who can run the numbers for your specific situation.

Malta Minimum Tax: The Hidden Cost for Small Companies

Many calculators miss a crucial point: Malta charges a Minimum Tax of €5,000 per year for companies with foreign shareholders.

With €50,000 annual profit, that means effectively a 10% minimum tax—regardless of any refunds. Only from around €100,000 profit does the Full Imputation System really start to pay off.

Concrete Examples: What Do You Really Save in Malta?

Enough theory. Let me show you real scenarios to illustrate the tax impact of Malta. These examples are based on my client experience—names changed, numbers are real.

Example 1: Sarah, E-Commerce Entrepreneur from Berlin

Starting point: Sarah sells yoga equipment via Amazon FBA and makes €300,000 in annual profit. In Germany, she pays about 32% tax = €96,000.

Sarah’s verdict: “An €81,000 saving per year easily justifies the €15,000 setup costs and a move to Malta. After two years, I’ll have half a million extra in the bank.”

Example 2: Marco, Software Developer with a SaaS Business

Starting point: Marco runs a B2B software company out of Vienna generating €150,000 in license fees. Austria charges 25% corporate tax.

Marco’s reality: “The savings are less than I’d hoped, but Malta offers me strategic advantages as an EU hub for international clients. Plus, the weather is better than Vienna.”

Example 3: Dr. Weber, Business Consultant with €750,000 Profit

Starting point: Dr. Weber consults for DAX-listed companies on digitalisation projects. In Germany, he’d pay almost 45% tax.

The twist: As a consultant, Dr. Weber has both trading income (active consulting) and passive income (book sales, online courses).

Dr. Weber’s assessment: “€287,500 saved per year. Even after all setup and maintenance costs, I’m €250,000 better off. Malta was the best business decision I ever made.”

When Malta DOESN’T Work: Anti-Example

Tom, freelance designer with €80,000 annual profit:

In Germany, Tom pays about €25,000 in tax. In Malta, he would pay €5,000 minimum tax plus around €4,000 in effective tax = €9,000. Saving: €16,000 gross.

But: Setup costs (lawyer, accountant, company formation): €12,000. Ongoing costs (bookkeeping, tax advice): €8,000 annually. Net saving: -€4,000 in the first year, +€8,000 from year two.

Tom’s conclusion: “Malta isn’t worth it for me. Too much hassle for too little saving.”

Malta Non-Dom Status and Holding Structures Explained

This is where the wheat is separated from the chaff. Malta has various tax structures—not all are right for everyone. Let me explain the most important options, with pros and cons.

Malta Non-Dom Status: Your Ticket to Tax Optimisation

The Non-Dom Status (Non-Domiciled Resident) is the foundation of every Malta tax plan. You’re taxable in Malta, but not on worldwide income—only on income generated in Malta or remitted there.

Requirements for Non-Dom Status:

• You are not a Maltese national
• You have residency in Malta (minimum 183 days/year)
• You are not Maltese “domicile” (in short: not permanently rooted in Malta)

The catch: Foreign income not brought into Malta is tax-free. Your German rental property? Tax-free in Malta. Your Swiss securities account? Also tax-free as long as earnings stay abroad.

Malta Holding Structures: When They Make Sense

A Maltese holding company can be worthwhile if you:

• Hold interests in other companies (dividends from EU countries usually tax-free)
• Earn license fees from intellectual property
• Hold property outside Malta via a company
• Conduct international business through an EU hub

Typical holding structure:

EU Parent-Subsidiary Directive: Your Dividend Turbo

As an EU member, Malta benefits from the EU Parent-Subsidiary Directive. That means: Dividends from EU subsidiaries to your Maltese holding are often completely tax-free.

Example: Your German GmbH distributes €200,000 in dividends to your Maltese holding. In Germany, 5% withholding tax is due (= €10,000). In Malta? 0% tax on these dividends.

But beware: Germany can still apply controlled foreign company rules if your Maltese holding is deemed a “passive intermediate company.”

Substance Requirements: Malta Is Getting Tougher

Malta is tightening its substance requirements. Your Maltese company must engage in real economic activities—not just be a mailbox.

Minimum substance requirements:

• Office space in Malta (not just a virtual address)
• Local employees with appropriate qualifications
• Key operational decisions must be made in Malta
• Board of directors with Maltese members
• Accounting and compliance in Malta

These requirements cost money. Expect at least €30,000–€50,000 annually for proper substance in Malta.

Intellectual Property (IP) Regime: Interesting for Tech Entrepreneurs

Malta offers a special IP regime for license fees from intellectual property.

• The IP must be developed or significantly improved in Malta
• The IP must be either self-used or licensed to related companies

For software entrepreneurs with their own development teams, this can be a goldmine. For pure IP-holding structures without substance, it’s useless.

Step-by-Step: How to Properly Use the Malta Tax Calculator

Right, time to get hands-on. Let me walk you through the key steps to use a Malta Tax Calculator effectively—while avoiding common traps.

Step 1: Categorise Your Income

Before you enter a single euro, you have to allocate your income correctly. Malta is very precise about the different types of profit:

Trading Income (Active Business):

• Consulting services
• E-commerce and trade
• Software development (custom projects)
• Services of all kinds
• Refund: 6/7 = 5% effective tax

Passive Income:

• License fees and royalties
• Interest income
• Dividends (from unrelated companies)
• Rental income
• Refund: 5/7 = 10% effective tax

Foreign Source Income:

• All income generated outside Malta
• Only taxable if remitted to Malta
• Non-Dom advantage: Can remain tax-free

My tip: If youre unsure, consult a Maltese tax advisor before running the calculation. A wrong categorisation can skew your numbers by tens of thousands of euros.

Step 2: Plan Your Distribution Strategy

This is where it’s decided whether Malta works for you or not. Refunds are only available on distributions to non-Maltese shareholders.

Option A: Immediate Distribution

You pay out the entire profit as a dividend and get the refund. Advantage: Maximum tax savings. Disadvantage: You may owe tax on the distribution privately (depending on your country of residence).

Option B: Partial Retention

You retain part of the profit in the company. Advantage: Flexibility for future distributions. Disadvantage: No refund on retained earnings.

Option C: Staggered Distributions

You distribute profits over multiple years to optimise your personal tax allowances. Advantage: Tax optimisation at the private level. Disadvantage: More complex planning.

Step 3: Enter Personal Information

Now it’s down to your personal info. These details greatly affect your final tax bill:

Eligible for Non-Dom status?

If yes, foreign income not remitted to Malta is taxed at 0%. For international entrepreneurs, that can make a massive difference.

Previous tax residency

Germany, Austria, and Switzerland have different exit tax rules. A German entrepreneur with 25% stake in a corporation must pay tax on undisclosed reserves upon leaving—that can be expensive.

Planned duration of stay in Malta

Less than 183 days: you are not a Malta tax resident—the whole system doesn’t work. More than 183 days but less than 5 years: you keep Non-Dom status. After 5 years, you become Maltese “domicile” and pay tax on worldwide income.

Step 4: Account for Setup and Running Costs

Most calculators ignore these costs—a critical mistake. Here are the realistic cost items:

One-time setup costs:

• Company incorporation: €3,000–€5,000
• Legal fees: €5,000–€15,000 (depending on complexity)
• Tax advice setup: €3,000–€8,000
• Bank account opening: €500–€2,000
• Relocation costs: €5,000–€20,000
• Total: €16,500–€50,000

Annual running costs:

• Bookkeeping: €3,000–€8,000
• Tax advice: €2,000–€6,000
• Company Secretary: €1,500–€3,000
• Office costs (if substance needed): €10,000–€30,000
• Minimum tax: €5,000
• Total: €24,000–€57,000

These numbers are real—I’ve experienced them over three years in Malta. If your annual tax benefit is under €50,000, do the maths three times to check if Malta is worth it.

Step 5: Interpret Results and Make Your Decision

Congratulations—you’ve completed your Malta tax calculation. But what do the numbers actually mean for your decision?

Break-Even Analysis:

My rule of thumb: Malta is worth it from about €150,000 annual profit upwards. Below that, costs will eat your savings.

The 7 Most Expensive Mistakes in Malta Tax Planning

In three years in Malta, I’ve seen more tax fails than I’d like. Let me show you the most expensive mistakes—so you don’t pay the same price others have.

Mistake 1: Misunderstanding the Non-Dom Status

What Happened: Stefan from Munich thought Non-Dom meant “tax-free on everything outside Malta.” Wrong. He transferred his German rental income to Malta and suddenly paid 35% tax on it.

The Reality: Non-Dom only protects income NOT remitted to Malta. The moment money hits Maltese soil, it’s taxed under Maltese law.

Cost factor: Stefan paid €18,000 extra tax on €50,000 rental income.

Mistake 2: Ignoring Substance Requirements

What Happened: Maria set up her Maltese holding with a virtual address and no local employees. Germany classified the company as a “passive intermediate company” and applied controlled foreign company rules.

The Reality: Without real substance in Malta, you risk trouble back home. German tax authorities are getting increasingly aggressive with their scrutiny of Maltese structures.

Cost factor: Maria had to pay German tax afterward plus 20% interest—a total of €85,000.

Mistake 3: Underestimating the Minimum Tax

What Happened: Alex, running a €120,000 online business, anticipated a 5% effective tax in Malta. In practice, the €5,000 minimum tax meant he actually paid 9.2%—plus all setup and running costs.

The Reality: The minimum tax makes Malta unattractive for smaller companies. Many calculators ignore this item completely.

Cost factor: Alex’s saving shrank from an expected €33,000 to an actual €8,000.

Mistake 4: Overlooking Exit Taxes

What Happened: Thomas sold his German GmbH shares and moved to Malta. Germany slapped him with €180,000 exit tax on unrealised gains—he hadn’t factored that in.

The Reality: For shareholdings over 1% in German companies, tax on hidden reserves accrues when you leave. That can wipe out the Malta advantage for years.

Cost factor: Thomas needed four years of Malta savings to break even on the exit tax.

Mistake 5: Misclassifying Profits

What Happened: Sandra classified her affiliate marketing profits as “trading income” and calculated 5% tax. The Maltese tax office saw it as “passive income”—suddenly 10% instead of 5%.

The Reality: The line between trading and passive income is often blurred. Affiliate marketing, drop-shipping, and similar models often fall into the less favourable category.

Cost factor: Sandra paid €15,000 in tax instead of the expected €7,500.

Mistake 6: Disregarding Double Taxation Agreements

What Happened: Frank thought his German client payments to the Maltese company were automatically tax-free in Germany. Wrong—Germany withheld 5% withholding tax.

The Reality: Withholding taxes can apply even within the EU. These reduce your Malta savings and must be calculated.

Cost factor: Frank lost €12,000 annually to unplanned withholding taxes.

Mistake 7: Neglecting the Exit Strategy

What Happened: Robert built a successful Malta business over five years, then became Maltese “domicile” and lost his Non-Dom status. Suddenly, he was liable for tax on worldwide income.

The Reality: After 15 years in Malta (or buying Maltese property worth over €500,000), you automatically become Maltese domicile and are taxed on all worldwide income.

Cost factor: Robert suddenly paid €90,000 extra tax on his German real estate income.

How to Avoid These Mistakes:

1. Get professional advice—both in Malta and your home country
2. Plan your substance from the start—not when the audit arrives
3. Factor in all costs—including hidden ones
4. Understand the double taxation agreements with your business countries
5. Document everything meticulously—for both Maltese and German/Austrian compliance
6. Plan your exit—what happens after 5, 10, 15 years?
7. Keep up-to-date—tax laws change

Frequently Asked Questions About the Malta Tax Calculator

Is the Malta Tax Calculator free to use?

Most online calculators are free but only provide rough estimates. For a legally sound calculation, you need a Maltese tax advisor, who charges €500–€2,000 for a detailed analysis. My tip: Use free calculators for a first overview, then invest in professional advice.

From what profit level does Malta become attractive tax-wise?

My rule of thumb: From €150,000 in annual profit, Malta gets interesting. Below that, setup costs (€15,000–€50,000) and running costs (€25,000–€60,000) eat up your tax savings. With €100,000 profit, you often end up worse off; with €500,000 profit, you can easily save €80,000 per year.

Do I really have to spend 183 days a year in Malta?

Yes, this is mandatory for tax residency. Malta checks this using flight records, credit card transactions, and cell phone data. Cheating is not an option—the penalties are severe. Alternative: You can have a Maltese company without being resident, but lose out on most tax benefits.

Can I use my German tax advisor for Malta?

No, that’s an expensive mistake. German tax advisors usually only know the basics of the Maltese system. You need an advisor licensed in Malta who knows the local tax authorities and practices. Cost: €2,000–€6,000 per year for solid support.

What happens during a tax audit in Malta?

Malta audits more strictly now, especially with foreign entrepreneurs. You have to prove: real business activity in Malta, proper bookkeeping, substance on-site. Without a Maltese tax advisor and good documentation, it gets expensive. Audits take 6–18 months and can cost €10,000–€30,000 in advisory fees.

Does Malta work for e-commerce and Amazon FBA?

Yes, but with caveats. E-commerce is usually considered “trading income” (5% effective tax), but you need real substance in Malta. Amazon FBA without local warehousing or staff is risky. Many use Malta as an EU hub for international expansion—this works well.

How safe are Maltese banks?

Maltese banks are EU-regulated and covered by the EU deposit guarantee (€100,000 per customer). Pilatus Bank went bust in 2018, but customer funds were protected. Large sums should be spread across several banks. BOV and HSBC Malta are considered the safest options.

What does a corporate bank account in Malta cost?

Business accounts cost €500–€2,000 setup fee plus €50–€200 monthly management fees. You need: company documents, tax residency certificate, business plan, and often a local reference. Without a Maltese lawyer, you won’t get far—expect 2–6 months until the account is open.

Do I automatically lose Non-Dom status after 15 years?

Not automatically, but it gets tricky. After 15 years of Maltese residence, you have to actively prove that Malta isn’t your domicile of origin. This is doable, but you need strong arguments and documentation. Many people plan a move to another EU country after 10–12 years.

Can Germany still tax my Malta company?

Yes, via controlled foreign company rules for “passive intermediate companies.” If your Maltese firm is just a mailbox with no real substance, Germany treats it as transparent. You’ll pay tax in Germany as if you earned the income directly. Real substance in Malta is your protection.

Is Malta worthwhile for property investments?

It depends. Maltese real estate is expensive and the market is small. For international property portfolios, a Maltese holding can be attractive tax-wise—but only with proper structure and substance. Routing EU rental income through Malta can bring tax advantages, but it’s complex.