Table of Contents Malta tax system: An overview for beginners The most important tax forms in Malta in detail Step-by-step: How to file your tax return in Malta Deadlines: When everything is due The 7 most common mistakes with Malta tax returns Special tips for international entrepreneurs Useful tools and official resources You know what still makes me smile after two years in Malta? The fact that I submitted my first Maltese tax return with a pile of forms, half of which I didn’t even need. That’s so me—and so Malta, where nobody tells you in advance which of the twelve different forms you actually have to fill out. If you’ve moved to Malta as an international entrepreneur—or plan to start your business here—you probably know exactly what I mean. The good news? Malta has a relatively business-friendly tax system. The downside? The bureaucracy can drive you crazy if you don’t know where to start. Today, I’ll explain the most important Malta tax forms, when you need each one and how to file them without losing your mind. Promise: After reading this article, you’ll know exactly which paperwork you really need—and which you can safely ignore. Malta tax system: An overview for beginners Before we dive into the forms, let’s quickly clarify what we’re dealing with. Malta uses a so-called Full Imputation System—sounds complicated, but it’s actually quite fair. In a nutshell: Profits are taxed at the company level first, and when you pay them out as dividends, you get a credit for the tax already paid. The three tax accounts in Malta Every Maltese company maintains three imaginary accounts: Maltese Taxed Account (MTA): Profits from Maltese sources Foreign Income Account (FIA): Foreign income that has been taxed in Malta Final Tax Account (FTA): Income already taxed elsewhere What does this mean for you? Depending on which account you pay out dividends from, your effective tax rate varies from 0% to 35%. Pretty clever, right? Tax liability for international entrepreneurs As an entrepreneur in Malta, you’re generally taxable if: Your company is registered in Malta Management and control take place in Malta You’re resident in Malta as a sole trader Sounds logical, but there are pitfalls: Even if your holding company is in the Netherlands but you make decisions daily from your office in Valletta, Malta can demand taxes. Digital nomads have learned this the hard way. The most important tax forms in Malta in detail Now it gets concrete. I’ll walk you through the forms you really need as an international entrepreneur. Spoiler: There are fewer than you think. Form IT (Individual Tax Return) – Your personal tax return The Form IT is your bread-and-butter form as an individual. Here you enter all income—whether salary, dividends, rental income or other revenue. Section What to enter Important for Part I Personal details, residency status Everyone Part II Employment income Employees Part III Self-employment income Freelancers, consultants Part IV Dividends and interest Shareholders Part V Property income Landlords Insider tip: Most international entrepreneurs trip up over Part IV. If you’re receiving dividends from your own Maltese company, you have to report them here—even if you think the company already took care of it. Form CT (Company Tax Return) – The company’s tax return Every Maltese Limited (or PLC) must submit a Form CT. It’s much more extensive than the personal return and should ideally be completed by a local tax advisor. The most important sections: Schedule 1: Profit and loss statement Schedule 2: Balance sheet Schedule 3: Tax adjustments Schedule 4: Allocation to the three tax accounts Schedule 5: Distributions and tax credits What many don’t realize: Schedule 4 is the heart of the Maltese system. This determines how much tax you’ll eventually pay on dividends. A mistake here can cost you thousands of euros. Form VAT (VAT Return) Malta has a VAT threshold at 30,000 euros annual turnover. Sounds high, but it’s reached faster than you think—especially if you offer B2B services. You submit the VAT return quarterly or monthly, depending on your turnover: Annual turnover Submission period Deadline Up to €150,000 Quarterly By the 15th of the following month Over €150,000 Monthly By the 15th of the following month My tip from experience: Don’t underestimate the time you’ll need for the VAT return. Especially for cross-border services, things get complicated quickly. Form HR (Provisional Tax Return) – The advance payment Malta requires advance payments on expected tax liability. You submit the Form HR by April 30 and estimate your tax for the current year. The rule of thumb: If your tax liability will probably exceed €1,800, you must make advance payments. These are due in three instalments: 1st instalment: By April 30 (20% of estimated tax) 2nd instalment: By August 31 (30%) 3rd instalment: By December 21 (50%) What does this mean for you? Plan your cashflow accordingly. Nothing is more annoying than not having money available for the advance in September. Form CIT (Certificate of Income Tax) – Your tax certificate The Form CIT isn’t a form you fill out, but a certificate you apply for at the Inland Revenue Department. You’ll need it for: Visa applications in other countries Opening bank accounts Double tax treaty proof Property purchases Processing normally takes 2-3 weeks. Order it in advance if you need it for important appointments. Step-by-step: How to file your tax return in Malta Finally—the practical part. I’ll walk you through the exact steps so you don’t have to queue for hours at a government office or resubmit your paperwork three times. Step 1: Gather and organize documents Before you even touch a form, you need all the relevant documents. My checklist: All payslips or FS3 forms Bank statements from all Maltese and foreign accounts Dividend certificates Lease agreements and utility statements (if you’re renting out property) Receipts for deductible expenses Proof of foreign taxes paid Pro tip: Keep an Excel spreadsheet during the year with all tax-relevant income and expenses. This will save you hours of searching later. Step 2: Set up an online account with the Inland Revenue Department Malta finally launched an online portal in 2019—welcome to the 21st century! You can find it at servizz.gov.mt. Registration is a bit awkward, but once it’s done, you’ll avoid many future trips to government offices. You’ll need to register: Your Maltese ID number A valid email address A Maltese mobile number If you don’t have a Maltese number yet: GO and Vodafone have offices in almost every shopping mall. A prepaid SIM is enough. Step 3: Complete forms—in the right order This can be easy or complicated, depending on the order. My proven approach: First: company tax return (Form CT)—if you have a company Then: personal tax return (Form IT) Last: provisional tax (Form HR) Why this order? The company return determines which dividends you need to declare in your personal return. The other way around gets messy. Step 4: Submit—digitally or on paper You have two options: Method Advantages Disadvantages Online portal 24/7 accessible, immediate confirmation Sometimes unstable, PDF upload only In person/by mail Personal advice possible Waiting times, limited opening hours From experience: The online portal now works pretty reliably. I only go in person for complex cases. Step 5: Archive receipts Malta requires you to keep all tax documents for at least 6 years. Digital is fine, but make sure you have backups. I use a combination of cloud storage and an external hard drive. What does this mean for you? Develop a system you’ll understand in five years. Folder structures like Tax2024Malta are your friend. Deadlines: When everything is due Nothing is more annoying than missing a deadline and paying a fine. Malta is not exactly generous with delays—I speak from experience. The Malta tax calendar for international entrepreneurs Due by What’s due For whom Late penalty 15 January VAT return Q4 VAT-registered companies €50 + 0.33% per month 30 April Form IT (personal tax return) All taxpayers €10 + 1% per month 30 April Form HR (provisional tax) For tax due >€1,800 €10 + 1% per month 31 December Form CT (company tax return) All Maltese companies €25 + 1% per month 31 August 2nd advance payment For tax due >€1,800 Interest from September 1 21 December 3rd advance payment For tax due >€1,800 Interest from December 22 Special deadlines for new companies If you set up your company during the year, different deadlines apply: Incorporated Jan–Sep: Standard deadlines Incorporated Oct–Dec: Extension until June 30 of the following year for the first tax return But you need to apply for this extension—it’s not automatic. Special VAT periods for seasonal businesses If your business is seasonal (typical for tourism-related services), you can request an adjusted VAT period. This makes sense if, for example, you’re only active from May to October. What does this mean for you? Plan your calendar in advance and set yourself reminders. Missing a deadline can be expensive. The 7 most common mistakes with Malta tax returns In two years, I’ve made every beginner mistake you can imagine. So you don’t make the same mistakes, here are the biggest pitfalls: Mistake 1: Failing to declare foreign income Many think that income from Germany or other EU countries doesn’t have to be declared in Malta. Wrong! As a Maltese tax resident, you must declare all worldwide income. The reality: Malta often doesn’t fully tax foreign income, but you still have to declare it. Otherwise, you risk a tax audit. Mistake 2: Incorrect calculation of dividend credits The Maltese credit imputation system is complex. Many miscalculate tax credits on dividends and either lose money—or worse, end up unintentionally dodging tax. My tip: Have a local tax advisor handle things for the first year or two. The cost (usually €500–1,500) is easily offset by the mistakes you’ll avoid. Mistake 3: Overlooking the VAT reverse charge mechanism For B2B services to the EU, the reverse charge mechanism often applies. That means: You don’t add Maltese VAT to your invoice, but you still have to declare the service in your VAT return. Typical scenario: You consult for a German company online. No VAT on the invoice, but you still need to report it in Malta. Mistake 4: Incomplete collection of receipts Malta accepts many expenses as business expenses—but only with proper documentation. WhatsApp screenshots of your Uber ride don’t count. What counts as valid documentation: Official invoices with VAT number Receipts with clear date and amount Bank statements for online payments Contracts for regular expenses Mistake 5: Applying double tax treaties incorrectly Malta has double tax treaties with over 70 countries. Many apply them incorrectly and end up paying double tax or missing out on benefits. Important: A DTA doesn’t automatically exempt you from tax. It just determines which country has the right to tax. Mistake 6: Ignoring timing of dividend payments When you pay out dividends can have a big tax impact. A payout on December 31 is taxed differently than the same payout on January 2. Rule of thumb: Plan the timing of dividends strategically, especially for larger sums. Mistake 7: Not taking correspondence in Maltese seriously Malta is bilingual, and sometimes you’ll get letters from the authorities in Maltese. Ignoring them because you don’t understand can be expensive. Solution: Arrange for a reliable translator or ask a Maltese friend for help. What does this mean for you? Be systematic, keep proper records and don’t hesitate to seek professional help if you’re unsure. Special tips for international entrepreneurs As an international entrepreneur in Malta, you face particular challenges—but also some advantages many don’t realize. Tax planning with the remittance-based system Malta applies a remittance-based system for residents without permanent domicile: Foreign income is only taxable if remitted to Malta. Foreign income that remains abroad is tax-free. Practical example: You own a German business that makes €100,000 profit. As long as the €100,000 stays in the German business account, you pay no tax on it in Malta. The detailed rules: Foreign income remitted to Malta is taxable Foreign capital gains remain tax-free even if transferred to Malta Optimal use of holding structures Malta is a popular location for holding companies, especially for entrepreneurs with several international investments. The benefits: Type of income Effective tax rate Requirements Dividends from EU investments 0% Qualifying participation under Maltese law Capital gains 0% With qualifying participation Royalties 0% With suitable structure Meeting substance requirements Malta has tightened its substance rules. Your business must demonstrably operate in Malta. Minimum criteria for real substance: Management regularly meets in Malta Important decisions are taken in Malta Adequate number of qualified staff in Malta Appropriate operating expenses in Malta Practical tip: Keep records of all board meetings and key business decisions. This can be crucial during an audit. Transfer pricing for international transactions If your Maltese company does business with related companies abroad, you must use arm’s length prices. What this means: If you invoice your German subsidiary €50,000 for consulting services, you must prove that a third party would have paid the same price. Tax deduction of home office costs Many international entrepreneurs work partly from home. Malta accepts partial home office expenses, if done correctly: Separation: Dedicated work area, used exclusively for business Documentation: Calculate and record the proportion used Reasonableness: Costs must be appropriate for the business purpose What does this mean for you? Malta offers international entrepreneurs lots of opportunities, but you have to know and apply the rules correctly. Useful tools and official resources Finally, I’ll share my tried-and-tested tools and resources. These have saved me a lot of time and stress in recent years. Official websites and portals servizz.gov.mt: The central citizen portal for all official processes ird.gov.mt: Inland Revenue Department site with all forms vat.gov.mt: For VAT matters mfsa.gov.mt: Malta Financial Services Authority (for financial companies) Recommended accounting software Software Price/month Suitable for Malta-specific features Sage Business Cloud €35-85 SMEs with complex setups Malta VAT, multi-currency QuickBooks €15-40 Small business, freelancers Basic Malta compliance Xero €13-47 International companies Excellent multi-currency support Apps for on the go I regularly use these apps for tax-related tasks: CamScanner: Digitize receipts—the free version is enough Mileage Tracker: Automatic trip logging for business travel Toshl Finance: Expense tracking with tax categories Recommended tax advisors in Malta If you need professional help, here are three firms I’ve had good experiences with: PKF Malta: Internationally oriented, experts in holding structures Ganado Advocates: Especially strong in complex international cases WH Partners: Good value for SMEs Networking and peer exchange Malta is small—use that to your advantage for networking: Malta Business Network: Monthly events for entrepreneurs Digital Nomads Malta (Facebook): Active community with lots of tax discussions Chamber of Commerce Malta: Official networking events What does this mean for you? You don’t have to reinvent the wheel. Use proven tools and tap into Malta’s international entrepreneur community. Frequently Asked Questions (FAQ) Do I need to apply for a residence permit as an EU citizen before becoming taxable? No, your tax liability arises from your actual stay (more than 183 days) or transfer of your main residence to Malta. A formal residence permit isn’t required for EU citizens, but registration with the police is. Can I keep my German tax number if I move to Malta? You become subject to limited tax liability in Germany when you move your residence to Malta. German income may still be subject to German tax, but your unlimited tax liability in Germany ends. How long does it take to process a Maltese tax return? Normally 4–8 weeks for electronic submission, up to 12 weeks for paper forms. If there are questions or for complex cases, it can take longer. What happens if I use the remittance system and then later transfer foreign money to Malta? Those funds become taxable for the year you transfer them. You must submit an amended tax return and pay the tax plus any possible interest. Do I need a Maltese tax advisor or can I do it myself? For simple cases (salary only, no company) you can do it yourself. For dividends, international structures or companies I strongly recommend a local tax advisor, at least for the first few years. How does social insurance work if I move to Malta? As an EU citizen, you become liable for Maltese social insurance as soon as you work or earn income there. Contributions are much lower than in Germany (about 10% vs. 20%), but benefits are also lower. Can I submit my Maltese tax return in German? No, Malta only accepts English and Maltese. All documents must be translated; notarized translations are usually not needed, but recommended for important documents. What are the biggest cost traps for Malta tax? Late fees (very high), wrongly calculated dividend credits, overlooked VAT obligations, and non-documented business expenses. Good prep can save you thousands of euros.
