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FAQs

FAQs

Company Formation

Q:

Who may incorporate a company?

A:

A limited liability company may be registered by the shareholders or their authorised agent.

Q:

How long does it take to incorporate a company?

A:

The length of time to incorporate a company depends on the type of company being incorporated and on whether all information and documentation is available and in order. Once all the documentation and information is in order and passed on to the Registrar of Companies, the process may take from as little as 24 hours. 

Q:

Is it possible to have the registered office outside of Malta?

A:

Every company registered in Malta must have a registered office in Malta. Any changes to the company's registered office must be notified to the Registrar of Companies.

Q:

What is the minimum number of shareholders allowed to incorporate a company?

A:

The minimum number of shareholders is normally two; however, a ‘single member company’ may also be registered. On the other hand the maximum number of shareholders for a private company is fifty. There is no maximum number of shareholders for a public company.

Q:

What is the minimum number of directors allowed to incorporate a company?

A:

Every private company must have at least one director whilst every public company must have at least two directors. It is worth mentioning that every company must have a company secretary. Furthermore, no company may have:

a) as company secretary its sole director (unless the company is a private exempt company)

b) as sole director of the company a body corporate, the sole director of which is company secretary to the company.

Q:

What is a company return?

A:

All companies must prepare an annual return upon each anniversary of its registration. The Company Return must be filed with the Registrar of Companies within 42 days after the date to which it is made up, against a payment which is determined upon the authorised capital of the company.

Q:

What is the deadline for submitting the company’s annual accounts?

A:

Companies are also required to file a copy of the annual accounts, which are generally accompanied by a copy of the auditors' report and the directors' report. The annual accounts must be filed within 10 months from the end of the financial year, with a grace period of 42 days.

Value Added Tax

Q:

Who is obliged to register for VAT purposes?

A:

Any taxable person established in Malta shall apply to the Commissioner for Revenue to be registered for Value Added Tax (VAT) purposes. Registration must take place not later than thirty days from the date on which any taxable supply or exempt with credit supply is made.

Q:

What is the VAT rate in Malta?

A:

Malta has different tiers of VAT, depending on the type of taxable supply. The VAT rates are as follows:

  • 18% on the taxable value of every taxable supply of goods, services or importation
  • 5% on the letting of or the provision of accommodation in premises licensed under the M.T.T.S. Act
  • 5% on the supply of electricity
  • 5% on specified confectionery items
  • 5% on specified medical accessories
  • 5% on specified printed matter
  • 5 % on specified items for the exclusive use of the disabled
  • 5% on the importation of works of arts, collectors’ items and antiques
  • 5 % on minor repairing of bicycles, shoes and leather goods, clothing and household linen (including mending and alteration)
  • 5% on domestic care services such as home help and care of the young, elderly, sick or disabled
  • 5% on admission to museums, art exhibitions, concerts and theatres

Certain products are exempt and on which no VAT is charged.

There are two types of exempt supplies:

  • Exempt with credit, where no VAT is charged on the value of the supply but the registered person is entitled to claim back input VAT incurred in the provision of that supply
  • Exempt without credit, where no VAT is charged on the value of the supply but the supplier is not entitled to claim back input VAT incurred in the provision of that supply. In this case the supplier is not required to register with the Department.

Q:

What is a recapitulative statement?

A:

A recapitulative statement is a periodical statement required to be made by suppliers in Malta who make intra-Community supplies of goods to customers identified with a valid VAT Registration number in another Member State. The new rules extend this requirement also to a supply of services made to a customer who is liable to pay the tax on that service in the Member State in which he is established, except when that service would be exempt in that Member State. The recapitulative statement must be submitted to the VAT Department.

Q:

What needs to be reported in the Recapitulative Statement?

A:

Your VAT Registration number and the VAT Registration number of the person acquiring the goods or receiving the services in the other Member State.


For each person who acquired goods or received services, the total value of the supplies of goods and the total value of the supplies of services carried out, would need to be entered.


You would also need to report any transfer of goods made by you to another Member State by including both your VAT Registration number by which you are identified in Malta as the supplier and also the VAT Registration number by which you are identified in the Member State of destination as the acquirer.

Q:

How frequently does the Recapitulative Statement need to be submitted?

A:

The Recapitulative Statements needs to be drawn up for each calendar month and are to be submitted not later than the fifteenth day of the month following the relative calendar month. However, it is also possible to submit a Recapitulative Statement for each calendar quarter by not later than the fifteenth day of the month following the end of the quarter, where the total quarterly amount, excluding VAT, of the supplies of goods does not exceed either in respect of the quarter concerned or in respect of any of the previous four quarters, the sum of €50,000.00 (fifty thousand Euro).


Notwithstanding the above, if you make only supplies of services for which the customer is liable for payment of the tax, you may submit a Recapitulative Statement for each calendar quarter by not later than the fifteenth day of the month following the end of the quarter irrespective of the total value of services supplied. However, if you make supplies of both goods and services, the rules for the goods shall prevail.

Q:

What happens if I fail to submit a Recapitulative Statement?

A:

As per the VAT Act, you would be liable to an administrative penalty. Failure to submit a Recapitulative Statement when required is also a criminal offence.

Taxation

Q:

What is the corporate tax rate in Malta?

A:

Corporate tax rate in Malta is 35%, however by means of the full imputation system shareholders are entitled to receive a refund of any tax paid by the company. This means that upon receipt of a dividend from the Malta company which operates trading income, shareholders will become entitled to a refund of 6/7ths of the total tax paid. On the other hand, upon receipt of a dividend from the Malta company out of profits derived from passive interest or royalties, the tax refund is minimized to 5/7ths of the total tax paid.

Q:

What are the corporate obligations with regard to income Tax in Malta?

A:

A Malta company is obliged by law to register for Income Tax. The Malta company is then required to submit the annual income tax return by the end of nine months and to pay the balance of tax due to the Inland Revenue by the end of 12 months following the end of the company’s financial year.

FAQs

Company Formation

Q:

Who may incorporate a company?

A:

A limited liability company may be registered by the shareholders or their authorised agent.

Q:

How long does it take to incorporate a company?

A:

The length of time to incorporate a company depends on the type of company being incorporated and on whether all information and documentation is available and in order. Once all the documentation and information is in order and passed on to the Registrar of Companies, the process may take from as little as 24 hours. 

Q:

Is it possible to have the registered office outside of Malta?

A:

Every company registered in Malta must have a registered office in Malta. Any changes to the company's registered office must be notified to the Registrar of Companies.

Q:

What is the minimum number of shareholders allowed to incorporate a company?

A:

The minimum number of shareholders is normally two; however, a ‘single member company’ may also be registered. On the other hand the maximum number of shareholders for a private company is fifty. There is no maximum number of shareholders for a public company.

Q:

What is the minimum number of directors allowed to incorporate a company?

A:

Every private company must have at least one director whilst every public company must have at least two directors. It is worth mentioning that every company must have a company secretary. Furthermore, no company may have:

a) as company secretary its sole director (unless the company is a private exempt company)

b) as sole director of the company a body corporate, the sole director of which is company secretary to the company.

Q:

What is a company return?

A:

All companies must prepare an annual return upon each anniversary of its registration. The Company Return must be filed with the Registrar of Companies within 42 days after the date to which it is made up, against a payment which is determined upon the authorised capital of the company.

Q:

What is the deadline for submitting the company’s annual accounts?

A:

Companies are also required to file a copy of the annual accounts, which are generally accompanied by a copy of the auditors' report and the directors' report. The annual accounts must be filed within 10 months from the end of the financial year, with a grace period of 42 days.

Value Added Tax

Q:

Who is obliged to register for VAT purposes?

A:

Any taxable person established in Malta shall apply to the Commissioner for Revenue to be registered for Value Added Tax (VAT) purposes. Registration must take place not later than thirty days from the date on which any taxable supply or exempt with credit supply is made.

Q:

What is the VAT rate in Malta?

A:

Malta has different tiers of VAT, depending on the type of taxable supply. The VAT rates are as follows:

  • 18% on the taxable value of every taxable supply of goods, services or importation
  • 5% on the letting of or the provision of accommodation in premises licensed under the M.T.T.S. Act
  • 5% on the supply of electricity
  • 5% on specified confectionery items
  • 5% on specified medical accessories
  • 5% on specified printed matter
  • 5 % on specified items for the exclusive use of the disabled
  • 5% on the importation of works of arts, collectors’ items and antiques
  • 5 % on minor repairing of bicycles, shoes and leather goods, clothing and household linen (including mending and alteration)
  • 5% on domestic care services such as home help and care of the young, elderly, sick or disabled
  • 5% on admission to museums, art exhibitions, concerts and theatres

Certain products are exempt and on which no VAT is charged.

There are two types of exempt supplies:

  • Exempt with credit, where no VAT is charged on the value of the supply but the registered person is entitled to claim back input VAT incurred in the provision of that supply
  • Exempt without credit, where no VAT is charged on the value of the supply but the supplier is not entitled to claim back input VAT incurred in the provision of that supply. In this case the supplier is not required to register with the Department.

Q:

What is a recapitulative statement?

A:

A recapitulative statement is a periodical statement required to be made by suppliers in Malta who make intra-Community supplies of goods to customers identified with a valid VAT Registration number in another Member State. The new rules extend this requirement also to a supply of services made to a customer who is liable to pay the tax on that service in the Member State in which he is established, except when that service would be exempt in that Member State. The recapitulative statement must be submitted to the VAT Department.

Q:

What needs to be reported in the Recapitulative Statement?

A:

Your VAT Registration number and the VAT Registration number of the person acquiring the goods or receiving the services in the other Member State.


For each person who acquired goods or received services, the total value of the supplies of goods and the total value of the supplies of services carried out, would need to be entered.


You would also need to report any transfer of goods made by you to another Member State by including both your VAT Registration number by which you are identified in Malta as the supplier and also the VAT Registration number by which you are identified in the Member State of destination as the acquirer.

Q:

How frequently does the Recapitulative Statement need to be submitted?

A:

The Recapitulative Statements needs to be drawn up for each calendar month and are to be submitted not later than the fifteenth day of the month following the relative calendar month. However, it is also possible to submit a Recapitulative Statement for each calendar quarter by not later than the fifteenth day of the month following the end of the quarter, where the total quarterly amount, excluding VAT, of the supplies of goods does not exceed either in respect of the quarter concerned or in respect of any of the previous four quarters, the sum of €50,000.00 (fifty thousand Euro).


Notwithstanding the above, if you make only supplies of services for which the customer is liable for payment of the tax, you may submit a Recapitulative Statement for each calendar quarter by not later than the fifteenth day of the month following the end of the quarter irrespective of the total value of services supplied. However, if you make supplies of both goods and services, the rules for the goods shall prevail.

Q:

What happens if I fail to submit a Recapitulative Statement?

A:

As per the VAT Act, you would be liable to an administrative penalty. Failure to submit a Recapitulative Statement when required is also a criminal offence.

Taxation

Q:

What is the corporate tax rate in Malta?

A:

Corporate tax rate in Malta is 35%, however by means of the full imputation system shareholders are entitled to receive a refund of any tax paid by the company. This means that upon receipt of a dividend from the Malta company which operates trading income, shareholders will become entitled to a refund of 6/7ths of the total tax paid. On the other hand, upon receipt of a dividend from the Malta company out of profits derived from passive interest or royalties, the tax refund is minimized to 5/7ths of the total tax paid.

Q:

What are the corporate obligations with regard to income Tax in Malta?

A:

A Malta company is obliged by law to register for Income Tax. The Malta company is then required to submit the annual income tax return by the end of nine months and to pay the balance of tax due to the Inland Revenue by the end of 12 months following the end of the company’s financial year.