Taxation in Malta

Taxation in Malta is levied by the State and it is administered by the Commissioner for Tax and Customs (il-Kummissarju tat-Taxxa u d-Dwana).

Reduced rates of 7% and 5% also apply whereas the supply of some goods and services is exempt from value added tax.

The reduced rate of 7% applies to certain accommodation services whereas the reduced rate of 5% applies on the supply of electricity, certain confectionery and similar items, certain medical accessories, certain printed matter, certain items which are for the exclusive used of disabled persons, importation of certain works of art, collector's items and antiques, minor repairs of bicycles, shoes and leather goods and clothing and household linen, domestic care services, admission to museums, art exhibitions, concerts and theatres, and usage of sporting facilities.

These include certain alcoholic beverages, certain manufactured tobacco items, certain energy products, mobile telephony services, cement, pneumatic tyres and certain ammunition cartridges.

Duty is payable on policies of insurance and transfers of immovable properties situated in Malta and certain securities.

The duty payable is calculated on the dutiable value of the document or transfer in question and in practice it is paid by the transferee.

However, shareholders are entitled to claim a refund of the tax paid in Malta on some of the dividends they receive from Maltese companies.

An employed individual is liable to a social security contribution of 10%, but up to a maximum of €42.57, of his/her basic weekly wage.

Self-employed individuals are required to pay social security contributions in three installments at the rate of 15% of the annual net income derived in the preceding year.