Asked about bookkeeping, chart of accounts, financial statements, P&L format, balance sheet layout, bank reconciliation, expense classification, asset capitalisation, or day-to-day accounting for a Maltese entity.
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General reference only
This Guide is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for your personal facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.
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Record retention period
6 years from end of the relevant financial year
Financial year (individuals/default)
Calendar year: 1 Jan – 31 Dec
Financial year (companies)
Any 12-month period (company's choice)
Companies Act
Cap. 386Companies Act (Cap. 386)
GAPSME Legal Notice
Legal Notice 289 of 2015Legal Notice 289 of 2015 (GAPSME)
Income Tax Act
Cap. 123Income Tax Act (Cap. 123)
Standard VAT rate (Article 10)
18%
VAT Capital Goods Scheme threshold
EUR 1,160 gross
Practical low-value expensing threshold (practitioner convention)
~EUR 700
Software subscriptions SaaS capitalisation threshold
EUR 1,160
Computers and electronic equipment – minimum years
4 yearsIncome Tax Act, 6th Schedule
Computers and electronic equipment – annual rate
25%Income Tax Act, 6th Schedule
Computer software – minimum years
4 yearsIncome Tax Act, 6th Schedule
Computer software – annual rate
25%Income Tax Act, 6th Schedule
Motor vehicles – minimum years
5 yearsIncome Tax Act, 6th Schedule
Motor vehicles – annual rate
20%Income Tax Act, 6th Schedule
Plant and machinery – minimum years
5 yearsIncome Tax Act, 6th Schedule
Plant and machinery – annual rate
20%Income Tax Act, 6th Schedule
Office equipment – minimum years
5 yearsIncome Tax Act, 6th Schedule
Office equipment – annual rate
20%Income Tax Act, 6th Schedule
Air conditioning – minimum years
6 yearsIncome Tax Act, 6th Schedule
Air conditioning – annual rate
~17%Income Tax Act, 6th Schedule
Furniture, fixtures, fittings – minimum years
10 yearsIncome Tax Act, 6th Schedule
Furniture, fixtures, fittings – annual rate
10%Income Tax Act, 6th Schedule
Electrical/plumbing installations – minimum years
15 yearsIncome Tax Act, 6th Schedule
Electrical/plumbing installations – annual rate
~7%Income Tax Act, 6th Schedule
Industrial buildings – minimum years
50 yearsIncome Tax Act, 6th Schedule
Industrial buildings – annual rate
2%Income Tax Act, 6th Schedule
Industrial buildings – initial allowance (acquisition year)
10% additional initial allowance in acquisition yearIncome Tax Act, 6th Schedule
Depreciation method
Straight-line on costIncome Tax Act, 6th Schedule
First-year depreciation start
Year the asset is first used in businessIncome Tax Act, 6th Schedule
Entertainment expenses – deductibility
NOT deductible – blocked under Article 14 ITAArticle 14 ITA
Net profit feeds to TA24 box
TA24 Box 3
Depreciation (6th Schedule) feeds to TA24 box
TA24 Box 15
SSC Class 2 feeds to TA24 box
TA24 Box 20
Provisional tax payments feed to TA24 box
TA24 Box 36
Small entity – Balance sheet total maximum
≤ EUR 4,000,000Legal Notice 289 of 2015 (GAPSME)
Small entity – Revenue maximum
≤ EUR 8,000,000Legal Notice 289 of 2015 (GAPSME)
Small entity – Average employees maximum
≤ 50Legal Notice 289 of 2015 (GAPSME)
Medium entity – Balance sheet total maximum
≤ EUR 20,000,000Legal Notice 289 of 2015 (GAPSME)
Medium entity – Revenue maximum
≤ EUR 40,000,000Legal Notice 289 of 2015 (GAPSME)
Medium entity – Average employees maximum
≤ 250Legal Notice 289 of 2015 (GAPSME)
Size classification – number of criteria to meet
Must meet 2 of 3 criteria for two consecutive yearsLegal Notice 289 of 2015 (GAPSME)
Audit exemption
Exempt if small private company
Directors' report – small private company
NOT required
Statement of changes in equity – small entity
NOT required
Cash flow statement – small entity
NOT required
Statement of changes in equity – medium entity
Required
Cash flow statement – medium entity
Required
Audit – medium entity
Required
Quick Reference (Companies Act (Cap. 386); Legal Notice 289 of 2015 (GAPSME); Income Tax Act (Cap. 123))
| Field | Value |
|---|---|
| Country | Malta (Republic of Malta) |
| Currency | EUR |
| Financial year | Typically calendar year (1 Jan -- 31 Dec); companies may choose any 12-month period |
| Accounting standards | GAPSME (default for SMEs); IFRS as adopted by the EU (by board resolution) |
| Governing body | Accountancy Board (Malta), Commissioner for Revenue (CFR) |
| Key legislation | Companies Act (Cap. 386); Legal Notice 289 of 2015 (GAPSME); Income Tax Act (Cap. 123) |
| Standard chart of accounts | None mandated — entities design their own CoA provided it supports GAPSME/IFRS financial statements |
| Record retention | 6 years from end of the relevant financial year |
Malta does not mandate a standard chart of accounts. The following is a recommended structure that maps cleanly to GAPSME financial statement presentation and Maltese tax return requirements.
Assets (1xxx)
| Code | Account | Notes |
|---|---|---|
| 1000 | Non-current assets (control) | |
| 1010 | Intangible assets -- software | Capitalise if > EUR 1,160 (VAT CGS threshold) |
| 1020 | Intangible assets -- goodwill | Rare for sole traders |
| 1100 | Property, plant and equipment | |
| 1110 | Land and buildings | |
| 1120 | Motor vehicles | |
| 1130 | Computer hardware | |
| 1140 | Furniture and fittings | |
| 1150 | Office equipment | |
| 1160 | Leasehold improvements | |
| 1199 | Accumulated depreciation | Contra-asset |
| 1200 | Current assets (control) | |
| 1210 | Trade receivables | |
| 1220 | Other receivables | |
| 1230 | Prepayments | |
| 1240 | VAT input (recoverable) | Article 10 entities only |
| 1300 | Bank -- current account | |
| 1310 | Bank -- savings account | |
| 1320 | Cash in hand | |
| 1330 | Petty cash |
Liabilities (2xxx)
| Code | Account | Notes |
|---|---|---|
| 2000 | Non-current liabilities (control) | |
| 2010 | Bank loans (long-term) | |
| 2020 | Hire purchase obligations (long-term) | |
| 2100 | Current liabilities (control) | |
| 2110 | Trade payables | |
| 2120 | Other payables | |
| 2130 | Accruals | |
| 2140 | VAT output (payable) | |
| 2150 | VAT control | Net position for CFR |
| 2160 | Income tax payable | |
| 2170 | SSC payable | |
| 2180 | Bank overdraft | |
| 2190 | Bank loans (current portion) | |
| 2200 | Directors' loan account |
Equity (3xxx)
| Code | Account | Notes |
|---|---|---|
| 3000 | Share capital / owner's capital | |
| 3010 | Share premium | |
| 3100 | Retained earnings | |
| 3200 | Current year profit/loss | Clearing account |
| 3300 | Drawings (sole trader) |
Revenue (4xxx)
| Code | Account | Notes |
|---|---|---|
| 4000 | Sales -- services | Main revenue for service businesses |
| 4010 | Sales -- goods | |
| 4020 | Sales -- exports / intra-EU | Zero-rated or exempt |
| 4100 | Other operating income | |
| 4200 | Government grants (revenue) | Malta Enterprise grants |
Cost of Goods Sold (5xxx)
| Code | Account | Notes |
|---|---|---|
| 5000 | Purchases -- goods for resale | |
| 5010 | Direct materials | |
| 5020 | Direct labour (subcontractors) | |
| 5030 | Import duties | |
| 5100 | Opening stock | |
| 5110 | Closing stock |
Operating Expenses (6xxx)
| Code | Account | Notes |
|---|---|---|
| 6000 | Rent -- business premises | Fully deductible |
| 6010 | Rates and local council levies | |
| 6020 | Electricity and water (ARMS) | Apportion if home office |
| 6030 | Telecoms and internet | Apportion if mixed use |
| 6040 | Insurance -- business | |
| 6050 | Repairs and maintenance | |
| 6100 | Salaries and wages | |
| 6110 | Employer SSC (Class 1) | |
| 6120 | SSC Class 2 (self-employed) | Maps to TA24 Box 20 |
| 6200 | Accountancy fees | |
| 6210 | Legal and professional fees | |
| 6220 | Bank charges | |
| 6230 | Payment processing fees | Stripe, PayPal etc. |
| 6300 | Marketing and advertising | |
| 6310 | Travel -- flights and accommodation | Business travel only |
| 6320 | Travel -- local transport | |
| 6330 | Motor vehicle expenses | Business % only |
| 6340 | Motor vehicle fuel | Business % only |
| 6400 | Office supplies and stationery | |
| 6410 | Software subscriptions (SaaS) | Recurring < EUR 1,160 |
| 6420 | Training and CPD | |
| 6430 | Professional subscriptions | MIA, ACCA etc. |
| 6440 | Postage and courier | |
| 6500 | Depreciation -- computer hardware | 25% straight-line |
| 6510 | Depreciation -- motor vehicles | 20% straight-line |
| 6520 | Depreciation -- furniture/fittings | 10% straight-line |
| 6530 | Depreciation -- office equipment | 20% straight-line |
| 6600 | Bad debts written off | |
| 6700 | Entertainment | NOT deductible for tax |
| 6800 | Sundry expenses |
Other Income / Expenses (7xxx)
| Code | Account | Notes |
|---|---|---|
| 7000 | Interest received | |
| 7010 | Interest paid | |
| 7020 | Bank loan interest | |
| 7100 | Profit/loss on disposal of assets | |
| 7200 | Foreign exchange gains/losses |
Tax (8xxx)
| Code | Account | Notes |
|---|---|---|
| 8000 | Income tax expense | Current year charge |
| 8010 | Deferred tax | GAPSME medium entities |
| 8020 | Provisional tax paid | Credit against liability |
Revenue Recognition
| Scenario | Treatment |
|---|---|
| Default under GAPSME | Accruals basis — revenue recognised when earned, not when cash received |
| Sole traders (TA24) | Tax return uses accruals basis; however CFR accepts cash basis for very small operations if consistently applied |
| Article 10 VAT-registered | Record revenue net of 18% VAT; VAT goes to 2140 |
| Article 11 (exempt) | Record revenue gross — no VAT component |
| Advance payments received | Credit to 2130 (Accruals) until service delivered, then transfer to 4000 |
| Multi-period contracts | Recognise revenue proportionally over the service period |
| Bad debts | Write off to 6600 only when irrecoverable; reverse the original revenue if not yet reported |
Expense Classification
| Expense Type | Nominal Code | Tax Deductibility | Notes |
|---|---|---|---|
| Office rent | 6000 | Fully deductible | Dedicated business premises |
| Home office utilities | 6020 | Proportional (dedicated room %) | Default 0% until confirmed |
| Motor vehicle costs | 6330/6340 | Business % only | Mileage log required |
| Entertainment | 6700 | NOT deductible | Blocked under Article 14 ITA |
| Software subscriptions | 6410 | Fully deductible | Recurring SaaS under EUR 1,160 |
| Professional fees | 6200/6210 | Fully deductible | Accountant, lawyer (business) |
| Travel (business) | 6310/6320 | Fully deductible | Wholly business purpose |
| Training and CPD | 6420 | Fully deductible | Must relate to current business |
| SSC Class 2 | 6120 | Deductible (Box 20) | NOT in Box 2 of TA24 |
| Fines and penalties | — | NOT deductible | Do not record as business expense |
| Personal drawings | 3300 | NOT deductible | Equity movement, not expense |
Asset vs Expense Thresholds
| Rule | Threshold | Treatment |
|---|---|---|
| Tax depreciation (capital allowances) | No statutory minimum — all business assets must be depreciated per 6th Schedule | Straight-line over minimum years |
| VAT Capital Goods Scheme | EUR 1,160 gross | Separate system; affects VAT Box 30 only |
| Practical low-value expensing | Some practitioners expense items under ~EUR 700 immediately | Flag for reviewer; strictly all assets should be depreciated |
Depreciation Rates (Income Tax Act, 6th Schedule) (Income Tax Act, 6th Schedule)
| Asset Category | Minimum Years | Annual Rate |
|---|---|---|
| Computers and electronic equipment | 4 | 25% |
| Computer software | 4 | 25% |
| Motor vehicles | 5 | 20% |
| Plant and machinery | 5 | 20% |
| Office equipment | 5 | 20% |
| Air conditioning | 6 | ~17% |
| Furniture, fixtures, fittings | 10 | 10% |
| Electrical/plumbing installations | 15 | ~7% |
| Industrial buildings | 50 | 2% |
Depreciation is straight-line on cost. First-year depreciation starts in the year the asset is first used in business. Industrial buildings qualify for an additional 10% initial allowance in the acquisition year.
GAPSME requires an income statement with the following minimum structure:
INCOME STATEMENT
For the year ended [date]
Revenue xxx
Cost of sales (xxx)
-----
GROSS PROFIT xxx
Other operating income xxx
Administrative expenses (xxx)
Distribution costs (xxx)
Other operating expenses (xxx)
-----
OPERATING PROFIT xxx
Finance income xxx
Finance costs (xxx)
-----
PROFIT BEFORE TAX xxx
Income tax expense (xxx)
-----
PROFIT FOR THE YEAR xxx
Small entities under GAPSME may combine administrative and distribution costs into a single "operating expenses" line.
GAPSME prescribes a vertical (report) format:
BALANCE SHEET
As at [date]
NON-CURRENT ASSETS
Intangible assets xxx
Property, plant and equipment xxx
-----
xxx
CURRENT ASSETS
Inventories xxx
Trade and other receivables xxx
Cash and cash equivalents xxx
-----
xxx
-----
TOTAL ASSETS xxx
EQUITY
Share capital xxx
Retained earnings xxx
-----
xxx
NON-CURRENT LIABILITIES
Borrowings xxx
-----
xxx
CURRENT LIABILITIES
Trade and other payables xxx
Current tax liabilities xxx
Borrowings (current portion) xxx
-----
xxx
-----
TOTAL EQUITY AND LIABILITIES xxx
Small entities: balance sheet, income statement, and simplified notes only. Medium entities must add statement of changes in equity and cash flow statement.
Maltese Bank Statement Formats
| Bank | Format | Date Format | Key Fields |
|---|---|---|---|
| BOV (Bank of Valletta) | PDF, CSV | DD/MM/YYYY | Date, Description, Debit, Credit, Balance |
| HSBC Malta | PDF, CSV | DD/MM/YYYY | Value Date, Description, Amount, Balance |
| APS Bank | DD/MM/YYYY | Date, Particulars, Withdrawals, Deposits | |
| Revolut Business | CSV | YYYY-MM-DD | Date, Counterparty, Amount, Currency |
| Wise Business | CSV | YYYY-MM-DD | Date, Description, Amount, Currency, Balance |
Common Maltese Transaction Descriptions
| Pattern | Likely Classification |
|---|---|
| TRASFERIMENT / TRF IN | Incoming payment — check if revenue |
| DD / DEBIT DIRETT | Direct debit — utility, subscription, or insurance |
| SO / STANDING ORDER | Standing order — rent or loan repayment |
| KARTA / CARD | Card payment — expense, check merchant |
| SPEJJEZ / CHARGES | Bank charges (6220) |
| ARMS / ARMS LTD | Electricity/water utility (6020) |
| CFR / TAX / SSC | Tax or SSC payment — exclude from P&L expense |
| INTERNAL TRANSFER | Own-account transfer — exclude |
GAPSME Size Thresholds (must meet 2 of 3 for two consecutive years)
| Criterion | Small | Medium |
|---|---|---|
| Balance sheet total | ≤ EUR 4,000,000 | ≤ EUR 20,000,000 |
| Revenue | ≤ EUR 8,000,000 | ≤ EUR 40,000,000 |
| Average employees | ≤ 50 | ≤ 250 |
Simplifications by Entity Size
| Requirement | Small Entity | Medium Entity |
|---|---|---|
| Balance sheet | Required (abbreviated) | Required (full) |
| Income statement | Required | Required |
| Notes to accounts | Simplified (limited disclosures) | Full disclosures |
| Statement of changes in equity | NOT required | Required |
| Cash flow statement | NOT required | Required |
| Directors' report | NOT required (private company) | Required |
| Audit | Exempt if small private company | Required |
| Filing with Registry | Abbreviated balance sheet; income statement may be withheld | Full filing |
Sole traders filing TA24 are not required to prepare GAPSME financial statements, but must maintain adequate books and records for CFR inspection.
Interaction with Tax Skills
| Tax Skill | How Bookkeeping Connects |
|---|---|
| malta-income-tax | P&L profit feeds TA24 Box 3 (net profit). Depreciation per 6th Schedule goes to Box 15. SSC Class 2 goes to Box 20 (not operating expenses for tax). Entertainment in 6700 must be added back. |
| malta-vat-return | VAT accounts (1240, 2140, 2150) feed the VAT return. Article 10 entities: output VAT (Box 1) from 2140; input VAT (Box 6) from 1240. Reconcile VAT control (2150) quarterly. |
| malta-ssc | SSC Class 2 payments recorded in 6120 feed TA24 Box 20. Employer Class 1 contributions in 6110 are a deductible operating expense in Box 2. |
| mt-estimated-tax | Provisional tax payments recorded in 8020 feed TA24 Box 36 as credits against the final tax liability. |
This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional before filing or acting upon.
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Other Malta computations in the OpenAccountants Tax Library.
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