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1.1 Government and Tax System

Malta is a unicameral parliamentary republic. The country has a two-party political system and is led by a majority governing party.

The official languages of Malta are Maltese and English. All official notices, forms and legislation can be found in the English language.

A member of the European Union (EU) since 2004, Malta has an obligation to follow EU legislation and transpose EU directives into its domestic law.

There is no separate corporate income tax system in Malta, and a company is subject to tax in much the same way as an individual. The income tax system takes its origins from common law based on the income tax law in England up until around 1965.

The key sources of tax law in Malta are the Income Tax Act, the Income Tax Management Act, the Value Added Tax Act, and the Duty on Documents and Transfers Act, together with regulations issued under such Acts. In cases of interpretation of words and expressions not defined in Maltese law, the Income Tax Act makes specific reference to English law, which to a large extent includes English case law. For a link to Maltese legislation, see Section 1.4.

The Commissioner for Revenue is responsible for the administration and collection of tax in Malta. The Commissioner is empowered by article 6(4) of the Commissioner for Revenue Act and article 96(2) of the Income Tax Act to issue guidelines, explanations or instructions relating to the revenue acts or regulations. Subject to certain conditions and restrictions such guidelines, explanations or instructions have the force of law. For a link to the tax guidelines, see Section 1.4.

For information about VAT in Malta, see the VAT Navigator.

1.2 Currency

The currency of Malta is the euro. Malta joined the Eurozone on January 1, 2008.

1.3 Membership of International Organizations

Malta is a member of the EU, EEA, Eurozone, United Nations, World Trade Organization (WTO), Council of Europe, and Commonwealth of Nations.

Malta is also a member of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL).

Although not a member of the Organization for Economic Cooperation and Development (OECD), Malta is committed to the Inclusive Framework on BEPS led by the OECD.

1.4 Official Websites

In Malta, the following tax or finance authority websites apply:

Government agencies

Legislation

Other government resources

1.5 Automatic Exchange of Information

For treaty information, including the number of agreements signed or in force, original treaty texts, translations, and consolidations, see the International Tax Treaties Collection.

Malta has ratified the Convention on Mutual Administrative Assistance in Tax Matters.

Malta is a signatory to the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information, and has enacted legislation to implement the Common Reporting Standard (CRS).

Malta has enacted legislation to implement the provisions of Directive 2014/107/EU (DAC2) (amending Directive 2011/16/EU (DAC)) on mandatory automatic exchange of tax information within the EU.

The EU, including Malta, has signed agreements to apply DAC (as amended by DAC2) with the following countries:

  • Andorra;
  • Switzerland;
  • Liechtenstein;
  • San Marino; and
  • Monaco.

Furthermore, Malta has enacted the following which allow for exchange of information:

  • legislation to implement a Foreign Account Tax Compliance Act (FATCA) Model 1 IGA with the United States;
  • the Multilateral Competent Authority Agreement on the Automatic Exchange of Country-by-Country (CbC) reports, facilitating implementation of the transfer pricing reporting standards developed under Action 13 of the OECD/G20 BEPS Project;
  • legislation to exchange tax rulings information with EU member states in line with Directive 2015/2376/EU (DAC3) (amending DAC) on the automatic exchange of advance cross-border tax rulings and advance pricing arrangements within the EU;
  • legislation to implement the provisions of Directive 2016/881/EU (DAC4) (amending DAC) on Country-by-Country (“CbC”) reporting and exchange of CbC reports within the EU;
  • legislation in line with Directive 2016/2258/EU (DAC5) granting access to beneficial ownership information to other EU member states; and
  • rules on the reporting of reportable cross-border arrangements in line with Directive 2018/822/EU (DAC6) (amending DAC). See Section 8.1.
  • Legislation on the reporting obligations for digital platform operators implementing the provisions of Directive 2021/514/EU (DAC7). See Section 8.1.

Malta is a signatory to the Multilateral Competent Authority Agreement on Automatic Exchange of Information on Income derived through Digital Platforms (“the DPI-MCAA”).

Malta is a member of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS), a group of countries that is developing standards on BEPS-related issues and is reviewing and monitoring implementation of the OECD/G20 BEPS Project.

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