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—that’s almost 45% of my hard-earned money going straight to the tax office. I thought: “There must be a better way.”

Malta was the answer. Not because of the sunshine (though that’s certainly a bonus), but thanks to one of the smartest tax systems in Europe. With the Malta Tax Calculator you can figure out in just minutes how much you would really save as an international entrepreneur.

But be careful: Malta is not a quick-fix tax haven for snap decisions. The system is complex, legal, and requires real 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 around 32% tax in Germany (30% corporate tax + trade tax + solidarity surcharge). In Malta? Effectively between 5% and 35%—depending on the structure and dividend strategy.

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

Who Benefits from the Malta Tax Calculator?

• International entrepreneurs with at least €200,000 annual profit
• Holding companies for shareholdings and license income
• Digital nomads with substantial online businesses
• Investors with capital income outside Malta
• Consultants and freelancers with international clients

If you earn less than €100,000 a year, save yourself the trouble. Legal and tax advisor fees in Malta will eat up your savings.

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

Now it gets interesting—and complicated. Malta’s tax system is based on three pillars, which together determine your final tax burden. Without understanding them, any tax calculator just spits 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—so Malta takes 35%. So far, so expensive.

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

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

Example: For €100,000 trading income you pay €35,000 corporate tax, but get €30,000 back. Remaining: €5,000—so a 5% effective tax rate.

Malta Non-Dom Status: Your Tax Advantage Turbo

As a Non-Dom (non-Maltese citizen with Maltese tax residence), you only pay tax on income earned or received in Malta. Foreign income that stays abroad? Tax-free in Malta.

That means: Your German property, your Swiss stock account, or your US Amazon FBA profits don’t count—as long as you don’t transfer the money to Malta.

But beware: Germany, Austria, or Switzerland may still tax you if you are still liable for tax there. The Malta strategy only works once you have definitely moved out of your previous tax jurisdiction.

Malta Tax Calculator: How to Calculate Your Actual Tax Burden

Let’s get practical. A proper Malta Tax Calculator doesnt just use the 35% headline rate, but calculates with all refunds, allowances, and your personal Non-Dom status.

What Inputs Do You Need for a Realistic Calculation?

1. Business Type and Profit Categories
   • Trading Income (active business)
   • Passive Income (license fees, interest)
   • Foreign Source Income (foreign income)
2. Planned Dividend Strategy
   • Immediate dividend vs. retention
   • Timing of profit distribution
3. Personal Status
   • Eligibility for Malta Non-Dom
   • Other tax obligations (Germany, etc.)
4. Holding Structure
   • Direct participation vs. holding company
   • EU parent or third country

The Critical Calculation Steps in Detail

A good Malta Tax Calculator works through this formula:

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

Sounds simple, but it’s tricky. The refund depends on the profit type, income tax on your Non-Dom status, and withholding tax on double tax agreements.

Why Most Online Calculators Are Garbage

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

• Show only the 35% corporate tax (without refund)
• Ignore Non-Dom status
• Don’t consider holding structures
• Work with outdated tax rates
• Don’t include double tax treaties

My tip: Use the calculator only for a rough orientation. For a final decision you need a Maltese tax advisor who calculates your specific situation.

Malta Minimum Tax: The Cost Trap for Small Companies

Many calculators overlook an important point: Malta levies a Minimum Tax of €5,000 per year for companies with foreign shareholders.

With an annual profit of €50,000 this means an effective minimum tax burden of 10%—regardless of refunds. Only from about €100,000 profit does the full imputation system really become attractive.

Concrete Examples: What Do You Really Save in Malta?

Enough theory. Let me show you real-life scenarios to see how Malta’s tax really affects you. These examples are based on my experience with clients—names changed, numbers real.

Example 1: Sarah, E-Commerce Entrepreneur from Berlin

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

Sarah’s Conclusion: “€81,000 savings per year easily justify the €15,000 setup costs and moving to Malta. After two years I’ve got half a million more in my account.”

Example 2: Marco, Software Developer with SaaS Business

Starting Point: Marco runs a B2B software company from Vienna and generates €150,000 in license fees. Austria charges 25% corporate tax.

Marco’s Reality: “The savings are lower than I’d hoped, but Malta gives me strategic advantages as an EU hub for international clients. And: better weather than Vienna.”

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

Starting Point: Dr. Weber consults DAX corporations on digitalization projects. In Germany he would pay nearly 45% tax.

Notably, as a consultant Dr. Weber has both trading income (active consulting) and passive income (book sales, online courses).

Dr. Weber’s Assessment: “€287,500 annual savings. Even after all setup and maintenance costs, I’ve still got over €250,000 more. Malta was the best business decision of my life.”

When Malta Doesn’t Work: A Cautionary Example

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

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

But: Setup costs (lawyer, accountant, company formation): €12,000. Ongoing costs (accounting, tax advice): €8,000 per year. Net savings: -€4,000 in the first year, +€8,000 from the second year onward.

Tom’s Conclusion: “For me, Malta isnt worth it. Too much effort for the savings.”

Malta Non-Dom Status and Holding Structures Explained

This is where the wheat is separated from the chaff. Malta offers various tax structures—not all of which make sense for everyone. Let me explain the most important options with their pros and cons.

Malta Non-Dom Status: Your Ticket to Tax Optimization

The Non-Dom Status (Non-Domiciled Resident) is the foundation of any Malta tax planning. You’re taxed in Malta, but not on your worldwide income—only on income earned or received in Malta.

Requirements for Non-Dom Status:

• You are not a Maltese citizen
• You have your residence in Malta (at least 183 days/year)
• You are not Maltese “Domicile” (simply put: not permanently rooted in Malta)

The trick: Foreign income that doesn’t flow to Malta remains 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 shares in other companies (dividends from EU countries often tax-free)
• Collect license fees from intellectual property
• Hold real estate outside Malta via a company
• Run international business via 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. Concretely: Dividends from EU subsidiaries to your Malta holding are often completely tax-free.

Example: Your German GmbH pays €200,000 dividend to your Malta holding. In Germany there is a 5% withholding tax (= €10,000). In Malta? 0% tax on these dividends.

But beware: Germany can still apply CFC rules if your Malta holding is considered a “passive intermediary company.”

Substance Requirements: Malta Gets Tougher

Malta is tightening Substance Requirements. Your Malta company must conduct actual business activity, not just exist as a letterbox.

Minimum Substance Requirements:

• Office space in Malta (not just a virtual address)
• Local employees with suitable qualifications
• 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 income from intellectual property.

• The IP must be developed or substantially improved in Malta
• The IP must either be used itself or licensed to related parties

For software entrepreneurs with their own development teams, this can be gold. For pure IP holding structures without substance, it’s pointless.

Step by Step: How to Use the Malta Tax Calculator Correctly

Let’s get practical. I’ll guide you through the key steps for making smart use of a Malta Tax Calculator—without falling into the typical pitfalls.

Step 1: Categorize Your Income

Before you enter even one euro, you must properly allocate your income. Malta distinguishes very carefully between different profit types:

Trading Income (Active Business):

• Consulting services
• E-commerce and trade
• Custom software development
• All types of services
• 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
• Taxable in Malta only if remitted
• Non-Dom Advantage: Can remain tax-free

My tip: If you’re unsure, consult a Maltese tax advisor before calculating. Misclassifying your income can distort your calculation by tens of thousands of euros.

Step 2: Plan Your Dividend Strategy

This is where it’s decided whether Malta is right for you. The refund is only available when distributing to non-Maltese shareholders.

Option A: Immediate Distribution

You distribute the entire profit as a dividend and get the refund. Advantage: Maximum tax savings. Disadvantage: You must pay tax on the money personally (depending on your country of residence).

Option B: Partial Retention

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

Option C: Staged Distribution

You distribute profits over several years to optimize personal tax allowances. Advantage: Tax optimization at personal level. Disadvantage: More complex planning.

Step 3: Enter Personal Situation

Now it’s about your personal data. These details have a huge impact on your final tax burden:

Eligible for Non-Dom Status?

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

Previous Tax Residence

Germany, Austria, and Switzerland have different exit taxes. A German entrepreneur with 25% in a corporation must pay tax on hidden reserves when leaving Germany—which can be expensive.

Planned Duration of Stay in Malta

Less than 183 days: you are not a Maltese tax resident—the system will not 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: Include Setup and Running Costs

Most tax calculators ignore these costs—a fatal error. Here are the realistic cost items:

One-Time Setup Costs:

• Company formation: €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
• Moving costs: €5,000–20,000
• Total: €16,500–50,000

Annual Running Costs:

• Accounting: €3,000–8,000
• Tax advice: €2,000–6,000
• Company secretary: €1,500–3,000
• Office costs (if substance required): €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 less than €50,000, run your numbers three times to check if Malta is worth it.

Step 5: Interpret the Result and Make a 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 pays off from around €150,000 annual profit. Below that, the costs will eat up your savings.

The 7 Most Expensive Mistakes in Malta Tax Planning

After three years in Malta, I’ve seen more tax fails than I care to admit. Let me show you the most expensive mistakes—so you don’t pay the same price as others.

Mistake 1: Not Really Understanding Non-Dom Status

What Happened: Stefan from Munich thought Non-Dom meant “tax-free on anything 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 transferred to Malta. Once 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 staff. Germany classified the company as a “passive intermediary company” and applied CFC rules.

The Reality: Without real substance in Malta, your home country’s tax authority will react. German tax authorities are increasingly strict about Maltese structures.

Cost Factor: Maria had to pay back German taxes plus 20% interest—a total of €85,000.

Mistake 3: Underestimating the Minimum Tax

What Happened: Alex with his €120,000 online business calculated with 5% effective tax in Malta. In reality, the €5,000 minimum tax pushed him up to 9.2%—plus all setup and running costs.

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

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

Mistake 4: Not Considering Exit Taxes

What Happened: Thomas sold his German GmbH shares and moved to Malta. Germany took €180,000 exit tax on hidden reserves—not planned for.

The Reality: If you own more than 1% of a German company, you pay tax on hidden reserves when leaving Germany. This can wipe out the Malta advantage for years.

Cost Factor: Thomas needed four years of Malta savings to recoup the exit tax.

Mistake 5: Wrong Profit Categorization

What Happened: Sandra classified her affiliate marketing earnings as “trading income” and calculated with 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 unclear. Affiliate marketing, drop shipping, and similar business models often fall into the worse category.

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

Mistake 6: Ignoring Double Tax Treaties

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

The Reality: Even between EU countries, withholding taxes can apply. These reduce your Malta savings and must be included in your calculation.

Cost Factor: Frank lost €12,000 annually to unexpected withholding tax.

Mistake 7: Neglecting an Exit Strategy

What Happened: Robert built a successful business in Malta over five years, but then became Maltese “Domicile” and lost his Non-Dom status—now taxed on worldwide income.

The Reality: After 15 years in Malta (or buying Maltese property over €500,000), you automatically become Maltese Domicile and pay tax 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 day one—not when the audit hits
3. Include all costs—even the hidden ones
4. Understand the double tax treaties with your business countries
5. Document everything meticulously—Maltese AND German/Austrian compliance
6. Plan your exit—what happens after 5, 10, 15 years?
7. Keep yourself updated—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 give rough estimates. For a legally sound calculation you need a Maltese tax advisor—costs between €500–2,000 for a detailed analysis. My tip: use free calculators for initial orientation, then invest in professional advice.

At what profit level is Malta tax-efficient?

My rule of thumb: Malta gets interesting from €150,000 annual profit. Below that, setup costs (€15,000–50,000) and recurring costs (€25,000–60,000) will eat up your savings. At €100,000 profit you often lose, at €500,000 you easily save €80,000 per year.

Do I really have to spend 183 days in Malta?

Yes, that’s mandatory for tax residency. Malta checks via flight bookings, credit card transactions, and mobile data. Cheating is not an option—penalties are severe. Alternative: You can have a Maltese company without residency, but lose most tax advantages.

Can I use my German accountant for Malta?

No, that’s an expensive mistake. German accountants often only know the basics of the Maltese system. You need a Malta-licensed tax advisor familiar with local authorities and practices. Costs: €2,000–6,000 per year for solid service.

What happens during a tax audit in Malta?

Malta audits more strictly than before, especially for foreign entrepreneurs. You must prove: real business activity in Malta, proper accounts, substance on the ground. Without a Maltese tax advisor and solid documentation it gets expensive. Audits take 6–18 months and usually cost €10,000–30,000 in consultancy fees.

Does Malta work for E-Commerce and Amazon FBA?

Yes, but with caveats. E-commerce is usually “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 their EU hub for international expansion—which works well.

How safe are Maltese banks?

Maltese banks are EU regulated and protected by the EU Deposit Guarantee Scheme (€100,000 per customer). Pilatus Bank collapsed in 2018, but customer deposits were safe. Larger sums: spread across several banks. BOV and HSBC Malta are seen as the safest options.

How much does a company bank account in Malta cost?

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

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

Not automatically, but it gets complicated. After 15 years of Maltese residency you must actively prove Malta isn’t your “domicile of origin.” It’s possible, but you need good arguments and documentation. Many plan a move to another EU country after 10–12 years.

Can Germany still tax my Malta company?

Yes, via CFC rules for “passive intermediary companies.” If your Maltese company is just a letterbox without substance, Germany regards it as transparent. You’ll pay German tax as if you earned the income directly. Real substance in Malta is your shield.

Is Malta worth it for real estate investments?

Limited. Maltese property is expensive and the market is small. For international real estate portfolios a Malta holding can be interesting tax-wise—but only with proper structure and substance. Channeling EU rental income via Malta can be beneficial, but it’s complex.