Malta Bookkeeping

Section 1 -- Quick Reference

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

Section 2 -- Recommended Chart of Accounts

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)

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)

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)

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)

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)

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)

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)

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)

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

Section 3 -- Revenue Recognition

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

Section 4 -- Expense Classification

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

Section 5 -- Asset vs Expense Thresholds

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)

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.

Section 6 -- Profit and Loss Format

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.

Section 7 -- Balance Sheet Format

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.

Section 8 -- Bank Reconciliation Patterns

Maltese Bank Statement Formats

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	PDF	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

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

Section 9 -- Micro-Entity / Small Business Simplifications

GAPSME Size Thresholds (must meet 2 of 3 for two consecutive years)

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

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.

Section 10 -- Interaction with Tax Skills

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.

Disclaimer

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.