How to compute Malta Income Tax for Malta, tax year 2025: rates, thresholds, and step-by-step rules with primary-source citations.
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Quick Reference
| Field | Value | |---|---| | Country | Malta (Republic of Malta) | | Tax | Income Tax (Taxxa fuq id-Dħul) | | Currency | EUR only | | Tax year | Calendar year (1 January -- 31 December); "basis year" precedes the "year of assessment" | | Primary legislation | Income Tax Act, Chapter 123 (ITA) | | Supporting legislation | Income Tax Management Act, Chapter 372 (ITMA); ITA Art. 90A + Part-Time Work Rules (TA22 regime); ITA Arts. 14 and 26 (allowed / disallowed deductions); ITA Art. 14(1)(f) and (j), Art. 24 and S.L. 123.01 (capital allowances); ITA Art. 31D (15% rental final tax, form TA24); ITMA Art. 44 and the Schedule to ITA Art. 56(12)(c) (interest, additional tax); S.L. 372.18 (Provisional Tax Rules) | | Tax authority | Malta Tax and Customs Administration (MTCA), formerly Commissioner for Revenue (CFR) | | Filing portal | MTCA online services (myTax) | | Filing deadlines | Personal Income Tax Return: **30 June** of the following year (online filing routinely extended by MTCA notice — e.g. 31 July 2026 for basis 2025). TA22 (part-time self-employed): **30 April**. TA24 (rental 15%): **30 April** | | Validated by | Pending — requires sign-off by a Maltese warranted accountant | | Validation date | Pending |ITA Cap. 123; ITMA Cap. 372
Filing form by situation
| Situation | Filing | |---|---| | Fully self-employed (trade, business, profession, vocation) | **Personal Income Tax Return with self-assessment** (electronic via myTax), including the self-employment profit-and-loss section. There is no form called "TA24" for this. | | Part-time self-employed alongside full-time employment / pension / full-time studies | Optional **TA22** (10% final-style computation on first EUR 12,000 of net profit) by 30 April — see Section 5.8 | | Rental income, optional 15% final tax on gross rents | **TA24** (ITA Art. 31D) by 30 April — out of this skill's computation scope, see Section 5.11 |ITA Art. 31D
Single Rates
| Taxable Income (EUR) | Rate | Subtract (EUR) | Cumulative Tax at Top | |---|---|---|---| | 0 -- 12,000 | 0% | 0 | EUR 0 | | 12,001 -- 16,000 | 15% | 1,800 | EUR 600 | | 16,001 -- 60,000 | 25% | 3,400 | EUR 11,600 | | 60,001+ | 35% | 9,400 | -- |
Depends on: income-tax-workflow-base.
Content revision: 2.1-draft (correction pass — unverified; frontmatter version is the platform revision counter).
Quick Reference (ITA Cap. 123; ITMA Cap. 372)
| Field | Value |
|---|---|
| Country | Malta (Republic of Malta) |
| Tax | Income Tax (Taxxa fuq id-Dħul) |
| Currency | EUR only |
| Tax year | Calendar year (1 January -- 31 December); "basis year" precedes the "year of assessment" |
| Primary legislation | Income Tax Act, Chapter 123 (ITA) |
| Supporting legislation | Income Tax Management Act, Chapter 372 (ITMA); ITA Art. 90A + Part-Time Work Rules (TA22 regime); ITA Arts. 14 and 26 (allowed / disallowed deductions); ITA Art. 14(1)(f) and (j), Art. 24 and S.L. 123.01 (capital allowances); ITA Art. 31D (15% rental final tax, form TA24); ITMA Art. 44 and the Schedule to ITA Art. 56(12)(c) (interest, additional tax); S.L. 372.18 (Provisional Tax Rules) |
| Tax authority | Malta Tax and Customs Administration (MTCA), formerly Commissioner for Revenue (CFR) |
| Filing portal | MTCA online services (myTax) |
| Filing deadlines | Personal Income Tax Return: 30 June of the following year (online filing routinely extended by MTCA notice — e.g. 31 July 2026 for basis 2025). TA22 (part-time self-employed): 30 April. TA24 (rental 15%): 30 April |
| Validated by | Pending — requires sign-off by a Maltese warranted accountant |
| Validation date | Pending |
Filing form by situation (ITA Art. 31D)
| Situation | Filing |
|---|---|
| Fully self-employed (trade, business, profession, vocation) | Personal Income Tax Return with self-assessment (electronic via myTax), including the self-employment profit-and-loss section. There is no form called "TA24" for this. |
| Part-time self-employed alongside full-time employment / pension / full-time studies | Optional TA22 (10% final-style computation on first EUR 12,000 of net profit) by 30 April — see Section 5.8 |
| Rental income, optional 15% final tax on gross rents | TA24 (ITA Art. 31D) by 30 April — out of this skill's computation scope, see Section 5.11 |
Tax = (chargeable income x rate) - subtract amount for the band containing the chargeable income.
Single Rates (Budget 2025, effective 1 January 2025)
| Taxable Income (EUR) | Rate | Subtract (EUR) | Cumulative Tax at Top |
|---|---|---|---|
| 0 -- 12,000 | 0% | 0 | EUR 0 |
| 12,001 -- 16,000 | 15% | 1,800 | EUR 600 |
| 16,001 -- 60,000 | 25% | 3,400 | EUR 11,600 |
| 60,001+ | 35% | 9,400 | -- |
Married Rates (joint computation) (Budget 2025, effective 1 January 2025)
| Taxable Income (EUR) | Rate | Subtract (EUR) | Cumulative Tax at Top |
|---|---|---|---|
| 0 -- 15,000 | 0% | 0 | EUR 0 |
| 15,001 -- 23,000 | 15% | 2,250 | EUR 1,200 |
| 23,001 -- 60,000 | 25% | 4,550 | EUR 10,450 |
| 60,001+ | 35% | 10,550 | -- |
Parent Rates (maintaining a child / paying maintenance) (Budget 2025, effective 1 January 2025)
| Taxable Income (EUR) | Rate | Subtract (EUR) | Cumulative Tax at Top |
|---|---|---|---|
| 0 -- 13,000 | 0% | 0 | EUR 0 |
| 13,001 -- 17,500 | 15% | 1,950 | EUR 675 |
| 17,501 -- 60,000 | 25% | 3,700 | EUR 11,300 |
| 60,001+ | 35% | 9,700 | -- |
Malta does not have a separate personal allowance -- the 0% band IS the personal allowance.
2026 note (Budget 2026, announced 27 October 2025, effective 1 January 2026). The base single/married/parent bands above are unchanged for basis year 2026, but four NEW categories were added for taxpayers with qualifying children (child under 18, or 18–23 in full-time education):
2026 new qualifying-children categories (Budget 2026, announced 27 October 2025, effective 1 January 2026)
| Category | 0% band | 15% band (subtract) | 25% band (subtract) | 35% (subtract) |
|---|---|---|---|---|
| Married, 1 qualifying child | 0 -- 17,500 | 17,501 -- 26,500 (2,625) | 26,501 -- 60,000 (5,275) | 60,001+ (11,275) |
| Married, 2+ qualifying children | 0 -- 22,500 | 22,501 -- 32,000 (3,375) | 32,001 -- 60,000 (6,575) | 60,001+ (12,575) |
| Parent, 1 qualifying child | 0 -- 14,500 | 14,501 -- 21,000 (2,175) | 21,001 -- 60,000 (4,275) | 60,001+ (10,275) |
| Parent, 2+ qualifying children | 0 -- 18,500 | 18,501 -- 25,500 (2,775) | 25,501 -- 60,000 (5,325) | 60,001+ (11,325) |
Further widenings were announced for 2027 and 2028. For basis year 2025 computations, use ONLY the three base tables.
The MTCA electronic return's own field numbering changes between years and is not reproduced here — map these working-paper lines to the live return at filing time (reviewer task).
Working-Paper Lines (S.L. 123.01)
| Line | Description |
|---|---|
| WP1 | Gross income from self-employment |
| WP2 | Less: Allowable deductions (revenue expenses) |
| WP3 | Net profit/loss (WP1 - WP2) |
| WP4 | Other income (employment, rental at progressive rates, dividends, interest) |
| WP5 | Total income (WP3 + WP4) |
| WP15 | Capital allowances (wear and tear per S.L. 123.01; initial allowance where due) |
| WP25 | Total statutory deductions (WP15 + any other statutory deductions) |
| WP30 | Chargeable income (WP5 - WP25) |
| WP35 | Tax liability (rate table applied to WP30 — deterministic engine only) |
| WP36 | Less: Provisional tax paid |
| WP37 | Less: Tax credits |
| WP40 | Tax due / refund (WP35 - WP36 - WP37) |
Note: SSC Class 2 has NO line in the tax computation — it is not deductible (Section 5.5). Record it memo-only for the reviewer.
Conservative Defaults
| Ambiguity | Default |
|---|---|
| Unknown marital status | STOP -- do not apply a rate table without marital status |
| Unknown filing status (full return vs TA22) | Full Income Tax Return (fully self-employed) |
| Unknown business-use % (vehicle, phone, home) | 0% deduction |
| Unknown expense category | Not deductible |
| Unknown VAT registration type | Article 10 (standard) |
| Unknown asset useful life | Use S.L. 123.01 minimum-years rates |
| Unknown whether expense is entertainment | Treat as entertainment (blocked -- conservative default, Section 5.6) |
Minimum viable -- bank statement for the full tax year in CSV, PDF, or pasted text, plus confirmation of marital status (single/married/parent) and employment status (fully self-employed full return, or part-time TA22).
Recommended -- all sales invoices, purchase invoices/receipts, SSC Class 2 payment records (memo only), prior year return or tax statement, VAT registration type (Article 10 or Article 11).
Ideal -- complete income and expenditure account, asset register with capital allowances schedule, provisional tax payment confirmations, employment income details (if TA22).
Refusal if minimum is missing -- SOFT WARN. No bank statement at all = hard stop. Bank statement without invoices = proceed with reviewer warning: "This return was produced from bank statement alone. The reviewer must verify that all deductions claimed are supported by valid documentation and that the wholly-and-exclusively test is met."
This is the deterministic pre-classifier. When a bank statement transaction matches a pattern below, apply the treatment directly. Do not second-guess. If none match, fall through to Tier 1 rules in Section 5.
How to read this table. Match by case-insensitive substring on the counterparty name or description as it appears in the bank statement. If multiple patterns match, use the most specific. If none match, fall through to Tier 1 rules.
Income Patterns
| Pattern | WP Line | Treatment | Notes |
|---|---|---|---|
| Client name + TRANSFER, DEPOSIT, PAYMENT RECEIVED | WP1 (gross revenue) | Business income | If Article 10 VAT-registered, extract net (excl. 18% VAT) |
| HONORARJU, FEES, PROFESSIONAL FEES, CONSULTANCY | WP1 | Business income | Professional fees -- typical for self-employed |
| STRIPE PAYOUT, STRIPE TRANSFER | WP1 | Business income | Platform payout -- match to underlying invoices |
| PAYPAL PAYOUT, PAYPAL TRANSFER | WP1 | Business income | Platform payout -- verify against invoices |
| WISE PAYOUT, WISE TRANSFER | WP1 | Business income | International platform payout |
| REVOLUT PAYOUT | WP1 | Business income | Check if business or personal Revolut |
| UPWORK, FIVERR, TOPTAL | WP1 | Business income | Freelance platform -- net of platform commission |
| PAGA, SALARY, STIPENDJU, EMPLOYER [name] | WP4 (other income) | Employment income | NOT self-employment -- goes to WP4 |
| KIRI, RENT RECEIVED | WP4 or TA24 | Rental income | Not self-employment income; if the client opts for the 15% Art. 31D final tax it goes on TA24 and stays OUT of this computation (Section 5.11) |
| INTERESSI, INTEREST RECEIVED | WP4 | Investment income | Interest income (investment-income withholding rules may apply -- reviewer) |
| DIVIDENDI, DIVIDEND | WP4 | Investment income | Dividend income |
| CFR REFUND, TAX REFUND, RISTORN | EXCLUDE | Not income | Tax refund from prior year |
| BONUS GVERN, GOVERNMENT GRANT, MALTA ENTERPRISE | EXCLUDE unless revenue grant | Check nature | Capital grants EXCLUDE; revenue grants = WP1 |
Fully Deductible Expense Patterns (ITA Art. 14(1)(b))
| Pattern | Category | Treatment | Notes |
|---|---|---|---|
| KIRI UFFICCJU, OFFICE RENT, RENT [commercial address] | Office rent | WP2 -- fully deductible | Dedicated business premises (ITA Art. 14(1)(b)) |
| PROFESSIONAL INDEMNITY, PI INSURANCE | Professional insurance | WP2 -- fully deductible | |
| ACCOUNTANT, AUDITOR, BOOKKEEP, CPA, ACCA FEES | Accountancy fees | WP2 -- fully deductible | |
| AVUKAT, LAWYER, LEGAL, NOTARY (business) | Legal fees | WP2 -- fully deductible | Must be business-related |
| STATIONERY, OFFICE SUPPLIES, VIKING | Office supplies | WP2 -- fully deductible | |
| MARKETING, GOOGLE ADS, META ADS, FACEBOOK ADS | Marketing/advertising | WP2 -- fully deductible | |
| TRAINING, CPD, COURSE, SEMINAR, CONFERENCE | Training/CPD | WP2 -- fully deductible | Must relate to current business |
| MIA, ACCA SUBSCRIPTION, PROFESSIONAL BODY | Professional subscriptions | WP2 -- fully deductible | |
| BOV CHARGE, HSBC CHARGE, BANK FEE, MAINTENANCE FEE | Bank charges | WP2 -- fully deductible | Business account only |
| STRIPE FEE, PAYPAL FEE, TRANSACTION FEE | Payment processing fees | WP2 -- fully deductible | |
| POSTAGE, MALTAPOST (business) | Postage | WP2 -- fully deductible | Business correspondence |
| DOMAIN, HOSTING, CLOUDFLARE, AWS, DIGITALOCEAN | IT infrastructure (services) | WP2 -- fully deductible | Recurring services = revenue expense; purchased HARDWARE = capital (WP15), no de minimis |
SaaS and Software Patterns (S.L. 123.01)
| Pattern | Category | Treatment | Notes |
|---|---|---|---|
| GOOGLE WORKSPACE, MICROSOFT 365, OFFICE 365 | Software subscription | WP2 -- fully deductible | Recurring subscription = operating expense |
| ADOBE, CANVA, FIGMA, NOTION, SLACK, ZOOM | Software subscription | WP2 -- fully deductible | |
| ANTHROPIC, OPENAI, GITHUB, ATLASSIAN, DROPBOX | Software subscription | WP2 -- fully deductible | |
| SOFTWARE LICENCE (perpetual) | Capital item | WP15 -- capitalise at 25%/year (4-year minimum, S.L. 123.01) | Capital by nature regardless of amount -- no de minimis |
Utilities Patterns
| Pattern | Category | Tier | Notes |
|---|---|---|---|
| ARMS, ARMS LTD, ENEMALTA | Electricity/water | T2 if home office | 100% if dedicated office; proportional if home |
| MELITA, GO PLC, EPIC | Telecoms/broadband | T2 | Business use portion only; default 0% if mixed |
| VODAFONE, MOBILE, GO MOBILE | Phone | T2 | Business use portion only |
Travel Patterns
| Pattern | Category | Treatment | Notes |
|---|---|---|---|
| AIR MALTA, RYANAIR, WIZZ AIR, EASYJET | Flights | WP2 if business travel | Must be wholly business purpose |
| HOTEL, BOOKING.COM, AIRBNB | Accommodation | WP2 if business travel | |
| BOLT, UBER, ECABS, TAXI | Local transport | WP2 if business purpose | |
| FUEL, ENEMED, PETROL | Vehicle fuel | T2 -- business % only | Requires mileage log |
| PARKING, CVA, MCP PARKING | Parking | T2 -- business % only |
NOT Deductible Patterns (ITA Art. 14(1) / Art. 26(a)-(b))
| Pattern | Category | Treatment | Notes |
|---|---|---|---|
| RESTAURANT, DINNER, LUNCH, ENTERTAINMENT, CLIENT MEAL | Entertainment | NOT deductible (conservative default) | Fails wholly-and-exclusively, ITA Art. 14(1) / Art. 26(a)-(b); no statutory partial deduction. Reviewer may allow substantiated genuine business entertainment -- flag, never auto-allow |
| PERSONAL, GROCERIES, SUPERMARKET, LIDL, PAVI | Personal expenses | NOT deductible | Domestic/private (ITA Art. 26(a)) |
| FINE, PENALTY, MULTA, PARKING FINE | Fines/penalties | NOT deductible | Public policy |
| CFR PAYMENT, MTCA PAYMENT, INCOME TAX, TAX PAYMENT | Tax payments | NOT deductible | Income tax cannot reduce income |
| SSC, CLASS 2, SOCIAL SECURITY | SSC Class 2 | NOT deductible -- memo only | No deduction in Cap. 123 for SSC (Section 5.5). Record the annual total for the reviewer |
| DRAWINGS, PERSONAL WITHDRAWAL, ATM (personal) | Drawings | NOT deductible | Not an expense |
Rates are the straight-line maximum implied by the S.L. 123.01 minimum-years schedule.
Capital Items Patterns (S.L. 123.01)
| Pattern | Category | Min years / Annual Rate | Notes |
|---|---|---|---|
| LAPTOP, COMPUTER, MACBOOK, IMAC, DESKTOP | Computers and electronic equipment | 4 years / 25% | WP15 |
| PRINTER, SCANNER, COPIER | Computers and electronic equipment | 4 years / 25% | WP15 (classification as electronic equipment -- reviewer confirm) |
| FURNITURE, DESK, CHAIR, FILING CABINET | Furniture, fixtures, fittings | 10 years / 10% | WP15 |
| VEHICLE, CAR (business) | Motor vehicle | 5 years / 20% | WP15, business % only; non-commercial cars: allowances computed on max cost EUR 14,000 |
| AIR CONDITIONING, AC UNIT | Air conditioners | 6 years / 16.67% | WP15 |
Exclusions
| Pattern | Treatment | Notes |
|---|---|---|
| INTERNAL TRANSFER, OWN ACCOUNT, BETWEEN ACCOUNTS | EXCLUDE | Own-account transfer |
| LOAN REPAYMENT, SELF-EMPLOYED LOAN, PERSONAL LOAN | EXCLUDE | Loan principal movement |
| SSC, CLASS 2, SOCIAL SECURITY | EXCLUDE from computation -- memo total for reviewer | NOT deductible against income tax (Section 5.5) |
| VAT PAYMENT, CFR VAT, MTCA VAT | EXCLUDE | VAT liability payment, not expense |
| PROVISIONAL TAX, PT INSTALMENT | WP36 (provisional tax paid) | Not an expense -- credit against liability |
Statement Format Reference
| Bank | Common Patterns | Notes |
|---|---|---|
| BOV (Bank of Valletta) | TRANSFER, DD, SO, CHQ, CHARGES | PDF/CSV; booking date format DD/MM/YYYY |
| HSBC Malta | PAYMENT, TRF, D/D, FEE | PDF/CSV; counterparty in description field |
| APS Bank | TRANSFER, DIRECT DEBIT, CHARGE | PDF; less common CSV export |
| Revolut Business | PAYMENT, TRANSFER, CARD PAYMENT | CSV; clean counterparty names |
| Wise Business | TRANSFER, CONVERSION, FEE | CSV; multi-currency -- use EUR amounts |
Input line:
15/03/2025 ; BOV TRANSFER IN ; BORG & VELLA ADVOCATES ; PAYMENT INV-2025-003 ; +1,180.00 ; EUR
Reasoning: Client payment for services to a Maltese business client. The taxpayer is Article 10 VAT-registered, so EUR 1,180 includes 18% Malta VAT. Net = 1,180 / 1.18 = EUR 1,000 (WP1). EUR 180 is VAT collected (excluded from income -- it is a liability to MTCA). NOTE: if the client were a foreign EU business, the supply would typically be reverse-charge (no Malta VAT in the price) -- do not blindly extract 18% from cross-border B2B receipts.
Classification: WP1 = EUR 1,000. VAT EUR 180 excluded.
Input line:
01/04/2025 ; HSBC DD ; ADOBE SYSTEMS IRELAND ; CREATIVE CLOUD APR ; -29.99 ; EUR
Reasoning: Monthly recurring SaaS subscription = operating expense by nature (not a capital acquisition). Fully deductible. For Article 10 clients, the net amount (excl. recoverable VAT) is the expense. If Article 11, gross amount is the cost.
Classification: WP2 = EUR 29.99 (or net if Article 10 with recoverable input VAT).
Input line:
22/04/2025 ; BOV CARD ; WATERBISCUIT RESTAURANT ; CLIENT DINNER ; -85.00 ; EUR
Reasoning: Client entertainment. Conservative default: blocked -- fails the wholly-and-exclusively test (ITA Art. 14(1)) and the negative test (Art. 26(a)/(b)). Malta has no statutory partial-deduction regime for entertainment. Flag for reviewer: a warranted accountant may allow genuinely business-purposed, substantiated entertainment -- never auto-allow.
Classification: NOT deductible. Remove from WP2 entirely. Reviewer flag.
Input line:
10/01/2025 ; BOV DD ; CFR SSC CLASS 2 ; Q4 2024 ; -1,090.50 ; EUR
Reasoning: SSC Class 2 payment. NOT deductible against income tax -- the ITA Art. 14 positive list contains no deduction for social security contributions and Art. 26(a) disallows private expenses not specifically allowed. Exclude from the tax computation; record the annual total as a memo item for the reviewer and for cash-flow planning.
Classification: EXCLUDE from computation. Memo: SSC paid EUR 1,090.50.
Input line:
03/06/2025 ; HSBC CARD ; APPLE STORE MALTA ; MACBOOK PRO ; -1,899.00 ; EUR
Reasoning: Capital asset. Computers and electronic equipment: minimum 4 years per S.L. 123.01, i.e. max 25% straight-line. EUR 1,899 x 25% = EUR 474.75 per year in WP15. Do NOT put in WP2.
Classification: WP15 = EUR 474.75/year. NOT WP2.
Input line:
15/05/2025 ; BOV TRANSFER ; OWN ACCOUNT - SAVINGS ; ; -2,000.00 ; EUR
Reasoning: Transfer between own accounts. Neither income nor expense. Exclude entirely.
Classification: EXCLUDE.
S.L. 123.01 prescribes MINIMUM depreciation periods; the rates below are the straight-line maxima they imply.
Capital Allowance Rates (S.L. 123.01 -- Deduction for Wear and Tear of Plant and Machinery Rules)
| Asset Type | Min Years | Max Annual Rate |
|---|---|---|
| Computers and electronic equipment | 4 | 25% |
| Computer software | 4 | 25% |
| Motor vehicles (non-commercial: cost capped at EUR 14,000) | 5 | 20% |
| Other machinery | 5 | 20% |
| Air conditioners | 6 | 16.67% |
| Catering equipment | 6 | 16.67% |
| Furniture, fixtures, fittings and soft furnishings | 10 | 10% |
| Other plant | 10 | 10% |
| Industrial buildings and structures (incl. hotels; prescribed car parks and offices per S.L. 123.173) | -- | 2% p.a. + 10% initial allowance in year of first use (ITA Art. 14(1)(j), new or first used in Malta) |
Depreciation is straight-line on cost, starting in the year the asset is first used in the business. Total allowances may never exceed cost. Unclaimed allowances may be carried forward. Legal basis: ITA Art. 14(1)(f) and (j); balancing statements on disposal under ITA Art. 24. Ordinary commercial buildings that do not meet the industrial-buildings/S.L. 123.173 definitions get NO buildings allowance -- reviewer decision.
Non-Deductible Expenses (ITA Art. 14(1); Art. 26)
| Expense | Reason |
|---|---|
| Entertainment (client meals, events) | Conservative block -- fails wholly-and-exclusively (Art. 14(1)); Art. 26(a)/(b); no statutory partial deduction. Reviewer may allow substantiated business cases |
| Personal living expenses | Domestic/private -- Art. 26(a) |
| Fines and penalties | Public policy |
| Income tax itself | Tax on income |
| SSC Class 2 | No deduction provision in Cap. 123 (Section 5.5) |
| Capital expenditure | Goes through WP15 -- Art. 26 |
| Drawings / personal withdrawals | Not an expense |
| Personal car insurance (unapportioned) | Personal |
VAT Interaction
| Scenario | Income Tax Treatment |
|---|---|
| VAT collected on sales (Article 10) | NOT income -- exclude from WP1 |
| Input VAT recovered (Article 10) | NOT an expense -- exclude from WP2 |
| Input VAT blocked/non-deductible (Article 10) | IS an expense -- include in WP2 |
| Article 11 client -- all VAT paid on purchases | IS an expense -- gross amount is cost |
| Foreign VAT (non-reclaimable) | IS an expense -- full gross is cost |
Legislation: ITA Art. 90A (tax on part-time work) and the prescribed Part-Time Work Rules; operative rate and cap per MTCA guidance for basis year 2025.
TA22 Regime conditions (ITA Art. 90A + Part-Time Work Rules; MTCA guidance basis year 2025)
| Condition | Requirement |
|---|---|
| Status | Full-time employed, OR pensioner, OR full-time student/apprentice |
| Registration | Part-time activity registered with Jobsplus; VAT-registered if obliged to register |
| Employees | Not more than 2 employees, and only on a part-time basis |
| Records | Proper books of account |
| Independence | Part-time work performed for someone other than the full-time employer |
| Net self-employment profit | Flat 10% on the first EUR 12,000 of net profit (revenue less directly incurred expenses) |
| Excess over EUR 12,000 | Declare the excess in the Income Tax Return at progressive rates |
| Form / deadline | TA22, filed and paid electronically by 30 April of the following year |
The TA22 election is optional -- the taxpayer may instead declare everything in the return at progressive rates (ITA Art. 90A(2)), with any part-time tax paid available as a credit/refund.
SSC: do NOT assert that "Class 1 covers all". Class 2 liability for a person who is simultaneously employed and self-occupied is governed by the Social Security Act (Cap. 318) and depends on the person's contribution status -- flag for the reviewer in every TA22 case.
Legislation: Provisional Tax (P.T.) Rules, S.L. 372.18 (under ITMA, Cap. 372)
Provisional Tax instalments (Provisional Tax (P.T.) Rules, S.L. 372.18)
| Instalment | % of PT benchmark | Deadline |
|---|---|---|
| 1st | 20% | 30 April |
| 2nd | 30% | 31 August |
| 3rd | 50% | 21 December |
The PT benchmark is based on the latest self-assessment (last filed return), as adjusted by any PT reduction claim accepted by MTCA -- never the current year's projected income. In practice a newly registered self-employed person receives no PT demand in the first year (no benchmark exists) and settles the first year's tax in full with the return -- reviewer to confirm against the client's PT statement.
Filing Deadlines and Penalties (ITMA Art. 44; Schedule to ITA Art. 56(12)(c))
| Item | Detail |
|---|---|
| Income Tax Return deadline | 30 June of the following year; online filing routinely extended by MTCA notice (basis 2024: electronic extended to 8 Aug 2025; basis 2025: manual AND electronic extended to 31 July 2026) |
| TA22 deadline | 30 April of the following year (tax paid with the form) |
| TA24 (rental 15%) deadline | 30 April of the following year |
| Late return -- additional tax (individuals) | Fixed banded scale, Table A, Schedule to ITA Art. 56(12)(c): EUR 10 (within 6 months) / 50 (6-12m) / 100 (12-18m) / 150 (18-24m) / 200 (24-36m) / 300 (36-48m) / 400 (48-60m) / 500 (over 60m). Remittable for reasonable excuse (insufficiency of funds and reliance on an agent do NOT count) |
| Late payment -- additional tax | 1% of the unpaid tax per month or part month (ITMA Art. 44(1)(a)); no cap stated in the statute; remittable at the Commissioner's discretion in limited cases |
| Late payment -- interest | 0.6% per month or part month for tax payable on/after 31 Aug 2022 (ITMA Art. 44(2A)); "the total interest shall not exceed the amount of the said tax" |
| Omission from a return | Additional tax of 1.5% per month of the endangered tax, max 60 months (items 5 and 7, Schedule to Art. 56(12)(c)); reduced to nil (rectified within 12 months, pre-enquiry), 0.1%/month (pre-enquiry, later), or 0.75%/month (post-enquiry-notice, pre-assessment) on voluntary rectification; no interest runs on this additional tax |
Legislation: ITA Art. 14(1)
Conservative default: 0% deduction until reviewer confirms room arrangement.
Flag for reviewer: Confirm room count, floor area basis, and that workspace is genuinely dedicated.
Conservative default: 0% business use until mileage log provided.
Flag for reviewer: Confirm business percentage is documented and reasonable.
Conservative default: 0% deduction until business percentage confirmed.
Legislation: ITA Art. 14(1)(d) and the Commissioner's Bad Debt Guidelines
Legislation: ITA Art. 24
MALTA INCOME TAX -- SELF-EMPLOYED WORKING PAPER (maps to the MTCA Income Tax Return)
Tax Year (basis): 2025
Client: ___________________________
Marital Status: Single / Married / Parent
A. WP1 -- GROSS SELF-EMPLOYMENT INCOME
A1. Client payments (net of VAT if Art.10) ___________
A2. Platform payouts (Stripe, PayPal, etc.) ___________
A3. Other business income ___________
A4. TOTAL WP1 ___________
B. WP2 -- ALLOWABLE DEDUCTIONS
B1. Office rent ___________
B2. Professional insurance ___________
B3. Accountancy / legal fees ___________
B4. Office supplies / stationery ___________
B5. Software subscriptions ___________
B6. Marketing / advertising ___________
B7. Bank charges / payment processing fees ___________
B8. Training / CPD / professional subs ___________
B9. Travel (flights, hotels, transport) ___________
B10. Telecoms (business % of phone/internet) ___________
B11. Home office (% of utilities/rent) ___________
B12. Vehicle expenses (business %) ___________
B13. Other allowable expenses ___________
B14. TOTAL WP2 ___________
C. WP3 -- NET PROFIT (A4 - B14) ___________
D. WP4 -- OTHER INCOME
D1. Employment income ___________
D2. Rental income (progressive option only --
15% Art.31D rents go on TA24, NOT here) ___________
D3. Investment income ___________
D4. TOTAL WP4 ___________
E. WP5 -- TOTAL INCOME (C + D4) ___________
F. STATUTORY DEDUCTIONS
F1. WP15 -- Capital allowances ___________
F2. WP25 -- Total deductions (F1) ___________
G. WP30 -- CHARGEABLE INCOME (E - F2) ___________
H. TAX COMPUTATION (pass to deterministic engine)
H1. WP35 -- Tax liability ___________
H2. WP36 -- Provisional tax paid ___________
H3. WP37 -- Tax credits ___________
H4. WP40 -- Tax due / refund ___________
MEMO (not in computation):
M1. SSC Class 2 paid in year (NOT deductible) ___________
REVIEWER FLAGS:
[ ] Marital status confirmed?
[ ] VAT registration type confirmed (Art.10/11)?
[ ] Home office arrangement confirmed?
[ ] Vehicle business % confirmed with mileage log?
[ ] Phone/internet business % confirmed?
[ ] All T2 items flagged for review?
[ ] Entertainment expenses excluded (or reviewer-approved)?
[ ] Capital items in WP15 (not WP2)?
[ ] SSC excluded from deductions (memo only)?
[ ] WP lines mapped to the current MTCA return fields?
Maltese Bank Statement Formats
| Bank | Format | Key Fields | Notes |
|---|---|---|---|
| BOV (Bank of Valletta) | PDF, CSV | Date, Description, Debit, Credit, Balance | Most common; description contains counterparty + reference |
| HSBC Malta | PDF, CSV | Value Date, Description, Amount, Balance | Card transactions show merchant name |
| APS Bank | Date, Particulars, Withdrawals, Deposits | Less common CSV; shorter descriptions | |
| Revolut Business | CSV | Date, Counterparty, Amount, Currency, Reference | Clean data; multi-currency possible |
| Wise Business | CSV | Date, Description, Amount, Currency, Running Balance | Multi-currency; conversion fees separate line |
Key Maltese Banking Terms
| Term | English | Classification Hint |
|---|---|---|
| TRASFERIMENT / TRF | Transfer | Check direction for income/expense |
| DEBIT DIRETT / DD | Direct debit | Regular expense (utility, subscription) |
| STANDING ORDER / SO | Standing order | Regular expense (rent, loan) |
| KARTA / CARD | Card payment | Expense -- check merchant |
| HLAS / DEPOSIT | Deposit | Potential income |
| SPEJJEZ / CHARGES | Bank charges | Deductible (WP2) |
| INTERESSI | Interest | Interest income (WP4) or bank charge |
| SELF-SERVICE / ATM | Cash withdrawal | Ask what cash was spent on |
If the client provides a bank statement but cannot answer onboarding questions immediately:
ONBOARDING QUESTIONS -- MALTA INCOME TAX
1. Marital status: single, married, or parent (maintaining a child)?
2. Employment status: fully self-employed (full return) or employed/pensioner/student
with side income (TA22 option)?
3. VAT registration: Article 10 or Article 11?
4. Home office: dedicated room or shared space? If dedicated, what % of floor area?
5. Vehicle: do you use a car for business? If yes, what % is business use? Do you keep a mileage log?
6. Phone/internet: what % is business use?
7. SSC Class 2: total amount paid in the tax year? (memo only -- not deductible)
8. Provisional tax: total amount paid in the tax year?
9. Any other income (employment, rental, dividends, interest)? If rental: 15% TA24 option or progressive?
10. Any capital assets purchased during the year?
Key Legislation References (ITA Cap. 123; ITMA Cap. 372)
| Topic | Reference |
|---|---|
| Income tax rates | ITA Cap. 123, Art. 56(1); annual rate amendments via Budget Measures Implementation Acts; MTCA published rate tables |
| Allowable deductions | ITA Art. 14 (positive test) |
| Disallowed deductions | ITA Art. 26 (negative test: domestic/private, capital, recoverable, voluntary) |
| Capital allowances | ITA Art. 14(1)(f) and (j); S.L. 123.01 (Wear and Tear Rules); S.L. 123.173 (Industrial Buildings -- offices definition); ITA Art. 24 (balancing statements) |
| Part-time regime (TA22) | ITA Art. 90A + Part-Time Work Rules; MTCA guidance (10% / EUR 12,000, basis 2025) |
| Rental 15% final tax (TA24) | ITA Art. 31D |
| Provisional tax | Provisional Tax (P.T.) Rules, S.L. 372.18 |
| Filing deadlines | ITMA Cap. 372; MTCA Tax Return Cycle and annual extension notices |
| Penalties / interest | ITMA Art. 44(1)(a) and (2A); Schedule to ITA Art. 56(12)(c) (Tables A/B, items 5-9) |
| Record keeping | ITA / ITMA (6-year retention) |
Capital Allowances vs VAT Capital Goods
| System | Threshold | Purpose |
|---|---|---|
| VAT Capital Goods Scheme | EUR 1,160 gross | VAT capital-goods reporting only |
| Income Tax Capital Allowances | No threshold | ALL business assets depreciated via WP15 |
A EUR 500 printer: depreciated for income tax (25% x EUR 500 = EUR 125/year in WP15, electronic equipment, 4-year minimum) but does NOT enter the VAT capital goods reporting (below EUR 1,160). These are entirely separate systems.
Expected tax figures are engine-derived reference outputs computed from the Section 1 tables (formula: chargeable x rate - subtract). Regenerate from the deterministic engine whenever the rate tables change; never hand-edit them.
Test 1 -- Standard single, mid-range income. Input: Single, gross revenue EUR 45,000, allowable expenses EUR 13,000, capital allowances EUR 375, SSC paid EUR 3,000, provisional tax EUR 3,500. Derivation:
Test 2 -- Married, higher income. Input: Married, gross EUR 80,000, expenses EUR 20,000, SSC paid EUR 4,362, no provisional tax (first year). Derivation:
Test 3 -- TA22 eligible. Input: Full-time employed, side net profit EUR 8,000, registered with Jobsplus. Expected: TA22 at 10% = 8,000 x 0.10 = EUR 800, paid by 30 April. SSC Class 2 position NOT asserted -- flag to reviewer (Cap. 318 question).
Test 4 -- Entertainment blocked. Input: EUR 2,000 client entertainment in WP2. Expected: Remove from WP2 (conservative default). Reviewer flag raised; no partial deduction applied.
Test 5 -- Capital item in wrong line. Input: Laptop EUR 1,500 in WP2. Expected: Remove from WP2. Add 1,500 x 25% = EUR 375 to WP15 (computers, 4-year minimum).
Test 6 -- Article 11 VAT as expense. Input: Article 11 client. Invoice EUR 236 gross (EUR 200 + EUR 36 VAT at 18%). Expected: WP2 = EUR 236 (full gross). Cannot reclaim VAT.
Test 7 -- SSC misclassified as deduction (regression for the 2025-10 correction). Input: SSC Class 2 EUR 3,000 placed in a deduction line. Expected: Remove from all deduction lines; memo only. Chargeable income unchanged by SSC.
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 (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.
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This skill is a tool, not an engagement. Every taxpayer's situation is different, and the rules in the skill may not match your specific facts.
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Other Malta computations in the OpenAccountants Tax Library.
Married Rates (joint computation)
| Taxable Income (EUR) | Rate | Subtract (EUR) | Cumulative Tax at Top | |---|---|---|---| | 0 -- 15,000 | 0% | 0 | EUR 0 | | 15,001 -- 23,000 | 15% | 2,250 | EUR 1,200 | | 23,001 -- 60,000 | 25% | 4,550 | EUR 10,450 | | 60,001+ | 35% | 10,550 | -- |Budget 2025, effective 1 January 2025
Parent Rates (maintaining a child / paying maintenance)
| Taxable Income (EUR) | Rate | Subtract (EUR) | Cumulative Tax at Top | |---|---|---|---| | 0 -- 13,000 | 0% | 0 | EUR 0 | | 13,001 -- 17,500 | 15% | 1,950 | EUR 675 | | 17,501 -- 60,000 | 25% | 3,700 | EUR 11,300 | | 60,001+ | 35% | 9,700 | -- |Budget 2025, effective 1 January 2025
2026 new qualifying-children categories
| Category | 0% band | 15% band (subtract) | 25% band (subtract) | 35% (subtract) | |---|---|---|---|---| | Married, 1 qualifying child | 0 -- 17,500 | 17,501 -- 26,500 (2,625) | 26,501 -- 60,000 (5,275) | 60,001+ (11,275) | | Married, 2+ qualifying children | 0 -- 22,500 | 22,501 -- 32,000 (3,375) | 32,001 -- 60,000 (6,575) | 60,001+ (12,575) | | Parent, 1 qualifying child | 0 -- 14,500 | 14,501 -- 21,000 (2,175) | 21,001 -- 60,000 (4,275) | 60,001+ (10,275) | | Parent, 2+ qualifying children | 0 -- 18,500 | 18,501 -- 25,500 (2,775) | 25,501 -- 60,000 (5,325) | 60,001+ (11,325) |Budget 2026, announced 27 October 2025, effective 1 January 2026
Working-Paper Lines
| Line | Description | |---|---| | WP1 | Gross income from self-employment | | WP2 | Less: Allowable deductions (revenue expenses) | | WP3 | Net profit/loss (WP1 - WP2) | | WP4 | Other income (employment, rental at progressive rates, dividends, interest) | | WP5 | Total income (WP3 + WP4) | | WP15 | Capital allowances (wear and tear per S.L. 123.01; initial allowance where due) | | WP25 | Total statutory deductions (WP15 + any other statutory deductions) | | WP30 | Chargeable income (WP5 - WP25) | | WP35 | Tax liability (rate table applied to WP30 — deterministic engine only) | | WP36 | Less: Provisional tax paid | | WP37 | Less: Tax credits | | WP40 | Tax due / refund (WP35 - WP36 - WP37) |S.L. 123.01
Conservative Defaults
| Ambiguity | Default | |---|---| | Unknown marital status | STOP -- do not apply a rate table without marital status | | Unknown filing status (full return vs TA22) | Full Income Tax Return (fully self-employed) | | Unknown business-use % (vehicle, phone, home) | 0% deduction | | Unknown expense category | Not deductible | | Unknown VAT registration type | Article 10 (standard) | | Unknown asset useful life | Use S.L. 123.01 minimum-years rates | | Unknown whether expense is entertainment | Treat as entertainment (blocked -- conservative default, Section 5.6) |
R-MT-1 -- Marital status unknown
"Marital status determines the applicable rate table. This skill cannot compute tax without knowing whether the client is single, married, or a parent. Please confirm before proceeding."
R-MT-2 -- Group structures or partnerships
"This skill covers sole proprietors and part-time self-employed individuals only. Group structures, partnerships, and companies file separate returns. Escalate to a warranted accountant."
R-MT-3 -- Non-resident income
"Non-resident and dual-resident taxation has different rules. Out of scope. Escalate to a warranted accountant."
R-MT-4 -- Capital gains / property disposals
"Capital gains computations under Article 5A or property transfers require specialised analysis. Escalate to a warranted accountant."Article 5A
R-MT-5 -- Arrears / enforcement
"Client has outstanding tax arrears or is subject to MTCA enforcement action. Late payment attracts additional tax of 1% per month (no statutory cap) plus interest of 0.6% per month (capped at the amount of the tax) under ITMA Art. 44. Do not advise. Escalate to a warranted accountant immediately."ITMA Art. 44
R-MT-6 -- VAT return requested
"This skill covers income tax only. For Malta VAT, use the malta-vat-return skill."
R-MT-7 -- Rental 15% final tax (TA24) computation requested
"TA24 is the optional 15% final tax on gross rental income under ITA Art. 31D, due 30 April. This skill flags it but does not compute it -- confirm whether the 15% option or progressive rates are better for the client with a warranted accountant."ITA Art. 31D
Income Patterns
| Pattern | WP Line | Treatment | Notes | |---|---|---|---| | Client name + TRANSFER, DEPOSIT, PAYMENT RECEIVED | WP1 (gross revenue) | Business income | If Article 10 VAT-registered, extract net (excl. 18% VAT) | | HONORARJU, FEES, PROFESSIONAL FEES, CONSULTANCY | WP1 | Business income | Professional fees -- typical for self-employed | | STRIPE PAYOUT, STRIPE TRANSFER | WP1 | Business income | Platform payout -- match to underlying invoices | | PAYPAL PAYOUT, PAYPAL TRANSFER | WP1 | Business income | Platform payout -- verify against invoices | | WISE PAYOUT, WISE TRANSFER | WP1 | Business income | International platform payout | | REVOLUT PAYOUT | WP1 | Business income | Check if business or personal Revolut | | UPWORK, FIVERR, TOPTAL | WP1 | Business income | Freelance platform -- net of platform commission | | PAGA, SALARY, STIPENDJU, EMPLOYER [name] | WP4 (other income) | Employment income | NOT self-employment -- goes to WP4 | | KIRI, RENT RECEIVED | WP4 or TA24 | Rental income | Not self-employment income; if the client opts for the 15% Art. 31D final tax it goes on TA24 and stays OUT of this computation (Section 5.11) | | INTERESSI, INTEREST RECEIVED | WP4 | Investment income | Interest income (investment-income withholding rules may apply -- reviewer) | | DIVIDENDI, DIVIDEND | WP4 | Investment income | Dividend income | | CFR REFUND, TAX REFUND, RISTORN | EXCLUDE | Not income | Tax refund from prior year | | BONUS GVERN, GOVERNMENT GRANT, MALTA ENTERPRISE | EXCLUDE unless revenue grant | Check nature | Capital grants EXCLUDE; revenue grants = WP1 |
Fully Deductible Expense Patterns
| Pattern | Category | Treatment | Notes | |---|---|---|---| | KIRI UFFICCJU, OFFICE RENT, RENT [commercial address] | Office rent | WP2 -- fully deductible | Dedicated business premises (ITA Art. 14(1)(b)) | | PROFESSIONAL INDEMNITY, PI INSURANCE | Professional insurance | WP2 -- fully deductible | | | ACCOUNTANT, AUDITOR, BOOKKEEP, CPA, ACCA FEES | Accountancy fees | WP2 -- fully deductible | | | AVUKAT, LAWYER, LEGAL, NOTARY (business) | Legal fees | WP2 -- fully deductible | Must be business-related | | STATIONERY, OFFICE SUPPLIES, VIKING | Office supplies | WP2 -- fully deductible | | | MARKETING, GOOGLE ADS, META ADS, FACEBOOK ADS | Marketing/advertising | WP2 -- fully deductible | | | TRAINING, CPD, COURSE, SEMINAR, CONFERENCE | Training/CPD | WP2 -- fully deductible | Must relate to current business | | MIA, ACCA SUBSCRIPTION, PROFESSIONAL BODY | Professional subscriptions | WP2 -- fully deductible | | | BOV CHARGE, HSBC CHARGE, BANK FEE, MAINTENANCE FEE | Bank charges | WP2 -- fully deductible | Business account only | | STRIPE FEE, PAYPAL FEE, TRANSACTION FEE | Payment processing fees | WP2 -- fully deductible | | | POSTAGE, MALTAPOST (business) | Postage | WP2 -- fully deductible | Business correspondence | | DOMAIN, HOSTING, CLOUDFLARE, AWS, DIGITALOCEAN | IT infrastructure (services) | WP2 -- fully deductible | Recurring services = revenue expense; purchased HARDWARE = capital (WP15), no de minimis |ITA Art. 14(1)(b)
SaaS and Software Patterns
| Pattern | Category | Treatment | Notes | |---|---|---|---| | GOOGLE WORKSPACE, MICROSOFT 365, OFFICE 365 | Software subscription | WP2 -- fully deductible | Recurring subscription = operating expense | | ADOBE, CANVA, FIGMA, NOTION, SLACK, ZOOM | Software subscription | WP2 -- fully deductible | | | ANTHROPIC, OPENAI, GITHUB, ATLASSIAN, DROPBOX | Software subscription | WP2 -- fully deductible | | | SOFTWARE LICENCE (perpetual) | Capital item | WP15 -- capitalise at 25%/year (4-year minimum, S.L. 123.01) | Capital by nature regardless of amount -- no de minimis |S.L. 123.01
Utilities Patterns
| Pattern | Category | Tier | Notes | |---|---|---|---| | ARMS, ARMS LTD, ENEMALTA | Electricity/water | T2 if home office | 100% if dedicated office; proportional if home | | MELITA, GO PLC, EPIC | Telecoms/broadband | T2 | Business use portion only; default 0% if mixed | | VODAFONE, MOBILE, GO MOBILE | Phone | T2 | Business use portion only |
Travel Patterns
| Pattern | Category | Treatment | Notes | |---|---|---|---| | AIR MALTA, RYANAIR, WIZZ AIR, EASYJET | Flights | WP2 if business travel | Must be wholly business purpose | | HOTEL, BOOKING.COM, AIRBNB | Accommodation | WP2 if business travel | | | BOLT, UBER, ECABS, TAXI | Local transport | WP2 if business purpose | | | FUEL, ENEMED, PETROL | Vehicle fuel | T2 -- business % only | Requires mileage log | | PARKING, CVA, MCP PARKING | Parking | T2 -- business % only | |
NOT Deductible Patterns
| Pattern | Category | Treatment | Notes | |---|---|---|---| | RESTAURANT, DINNER, LUNCH, ENTERTAINMENT, CLIENT MEAL | Entertainment | NOT deductible (conservative default) | Fails wholly-and-exclusively, ITA Art. 14(1) / Art. 26(a)-(b); no statutory partial deduction. Reviewer may allow substantiated genuine business entertainment -- flag, never auto-allow | | PERSONAL, GROCERIES, SUPERMARKET, LIDL, PAVI | Personal expenses | NOT deductible | Domestic/private (ITA Art. 26(a)) | | FINE, PENALTY, MULTA, PARKING FINE | Fines/penalties | NOT deductible | Public policy | | CFR PAYMENT, MTCA PAYMENT, INCOME TAX, TAX PAYMENT | Tax payments | NOT deductible | Income tax cannot reduce income | | SSC, CLASS 2, SOCIAL SECURITY | SSC Class 2 | NOT deductible -- memo only | No deduction in Cap. 123 for SSC (Section 5.5). Record the annual total for the reviewer | | DRAWINGS, PERSONAL WITHDRAWAL, ATM (personal) | Drawings | NOT deductible | Not an expense |ITA Art. 14(1) / Art. 26(a)-(b)
Capital Items Patterns
| Pattern | Category | Min years / Annual Rate | Notes | |---|---|---|---| | LAPTOP, COMPUTER, MACBOOK, IMAC, DESKTOP | Computers and electronic equipment | 4 years / 25% | WP15 | | PRINTER, SCANNER, COPIER | Computers and electronic equipment | 4 years / 25% | WP15 (classification as electronic equipment -- reviewer confirm) | | FURNITURE, DESK, CHAIR, FILING CABINET | Furniture, fixtures, fittings | 10 years / 10% | WP15 | | VEHICLE, CAR (business) | Motor vehicle | 5 years / 20% | WP15, business % only; non-commercial cars: allowances computed on max cost EUR 14,000 | | AIR CONDITIONING, AC UNIT | Air conditioners | 6 years / 16.67% | WP15 |S.L. 123.01
Exclusions
| Pattern | Treatment | Notes | |---|---|---| | INTERNAL TRANSFER, OWN ACCOUNT, BETWEEN ACCOUNTS | EXCLUDE | Own-account transfer | | LOAN REPAYMENT, SELF-EMPLOYED LOAN, PERSONAL LOAN | EXCLUDE | Loan principal movement | | SSC, CLASS 2, SOCIAL SECURITY | EXCLUDE from computation -- memo total for reviewer | NOT deductible against income tax (Section 5.5) | | VAT PAYMENT, CFR VAT, MTCA VAT | EXCLUDE | VAT liability payment, not expense | | PROVISIONAL TAX, PT INSTALMENT | WP36 (provisional tax paid) | Not an expense -- credit against liability |
Statement Format Reference
| Bank | Common Patterns | Notes | |---|---|---| | BOV (Bank of Valletta) | TRANSFER, DD, SO, CHQ, CHARGES | PDF/CSV; booking date format DD/MM/YYYY | | HSBC Malta | PAYMENT, TRF, D/D, FEE | PDF/CSV; counterparty in description field | | APS Bank | TRANSFER, DIRECT DEBIT, CHARGE | PDF; less common CSV export | | Revolut Business | PAYMENT, TRANSFER, CARD PAYMENT | CSV; clean counterparty names | | Wise Business | TRANSFER, CONVERSION, FEE | CSV; multi-currency -- use EUR amounts |
Wholly and Exclusively Test
An expense is deductible only if incurred wholly and exclusively in the production of the income (Art. 14(1)), and not disallowed by Art. 26 (domestic/private expenses, capital, recoverable amounts, voluntary payments, etc.). Mixed-use expenses must be apportioned. The apportionment method must be reasonable and documented.ITA Art. 14(1) (positive test) and Art. 26 (negative test)
Revenue Recognition
All business income goes to WP1. For Article 10 clients, report net of VAT. For Article 11 clients, report gross (no VAT charged). VAT collected on sales is NOT income.
Capital vs Revenue
Capital items must go through WP15 (capital allowances), not WP2 (ITA Art. 26 disallows capital expenditure as a revenue deduction; Art. 14(1)(f) allows wear and tear instead). There is no de minimis threshold -- business assets are depreciated per S.L. 123.01 regardless of cost. The VAT Capital Goods Scheme threshold (EUR 1,160) is a separate VAT system and is never an income-tax capitalisation test.ITA Art. 26; Art. 14(1)(f); S.L. 123.01
Capital Allowance Rates
| Asset Type | Min Years | Max Annual Rate | |---|---|---| | Computers and electronic equipment | 4 | 25% | | Computer software | 4 | 25% | | Motor vehicles (non-commercial: cost capped at EUR 14,000) | 5 | 20% | | Other machinery | 5 | 20% | | Air conditioners | 6 | 16.67% | | Catering equipment | 6 | 16.67% | | Furniture, fixtures, fittings and soft furnishings | 10 | 10% | | Other plant | 10 | 10% | | Industrial buildings and structures (incl. hotels; prescribed car parks and offices per S.L. 123.173) | -- | 2% p.a. + 10% initial allowance in year of first use (ITA Art. 14(1)(j), new or first used in Malta) |S.L. 123.01 -- Deduction for Wear and Tear of Plant and Machinery Rules
SSC Class 2 not deductible
SSC Class 2 (self-occupied persons' contributions, 15% of prior-year net income, paid three times a year) is **not deductible** in computing chargeable income. The ITA Art. 14 list of allowable deductions contains no provision for social security contributions, and Art. 26(a) disallows private expenses not specifically allowed by the Act. Record the amounts paid as a memo item only. > Reviewer note: this is the single highest-impact rule in this skill. It was verified against the full text of Cap. 123 (no SSC deduction provision exists) but no explicit MTCA statement was located -- warranted-accountant confirmation required before Q1 promotion.ITA Art. 14; Art. 26(a); Cap. 123
Non-Deductible Expenses
| Expense | Reason | |---|---| | Entertainment (client meals, events) | Conservative block -- fails wholly-and-exclusively (Art. 14(1)); Art. 26(a)/(b); no statutory partial deduction. Reviewer may allow substantiated business cases | | Personal living expenses | Domestic/private -- Art. 26(a) | | Fines and penalties | Public policy | | Income tax itself | Tax on income | | SSC Class 2 | No deduction provision in Cap. 123 (Section 5.5) | | Capital expenditure | Goes through WP15 -- Art. 26 | | Drawings / personal withdrawals | Not an expense | | Personal car insurance (unapportioned) | Personal |ITA Art. 14(1); Art. 26
VAT Interaction
| Scenario | Income Tax Treatment | |---|---| | VAT collected on sales (Article 10) | NOT income -- exclude from WP1 | | Input VAT recovered (Article 10) | NOT an expense -- exclude from WP2 | | Input VAT blocked/non-deductible (Article 10) | IS an expense -- include in WP2 | | Article 11 client -- all VAT paid on purchases | IS an expense -- gross amount is cost | | Foreign VAT (non-reclaimable) | IS an expense -- full gross is cost |
TA22 Regime conditions
| Condition | Requirement | |---|---| | Status | Full-time employed, OR pensioner, OR full-time student/apprentice | | Registration | Part-time activity registered with Jobsplus; VAT-registered if obliged to register | | Employees | Not more than 2 employees, and only on a part-time basis | | Records | Proper books of account | | Independence | Part-time work performed for someone other than the full-time employer | | Net self-employment profit | Flat **10%** on the first **EUR 12,000** of net profit (revenue less directly incurred expenses) | | Excess over EUR 12,000 | Declare the excess in the Income Tax Return at progressive rates | | Form / deadline | TA22, filed and paid electronically by **30 April** of the following year |ITA Art. 90A + Part-Time Work Rules; MTCA guidance basis year 2025
Provisional Tax instalments
| Instalment | % of PT benchmark | Deadline | |---|---|---| | 1st | 20% | 30 April | | 2nd | 30% | 31 August | | 3rd | 50% | 21 December |Provisional Tax (P.T.) Rules, S.L. 372.18
Filing Deadlines and Penalties
| Item | Detail | |---|---| | Income Tax Return deadline | **30 June** of the following year; online filing routinely extended by MTCA notice (basis 2024: electronic extended to 8 Aug 2025; basis 2025: manual AND electronic extended to 31 July 2026) | | TA22 deadline | **30 April** of the following year (tax paid with the form) | | TA24 (rental 15%) deadline | **30 April** of the following year | | Late return -- additional tax (individuals) | Fixed banded scale, Table A, Schedule to ITA Art. 56(12)(c): EUR 10 (within 6 months) / 50 (6-12m) / 100 (12-18m) / 150 (18-24m) / 200 (24-36m) / 300 (36-48m) / 400 (48-60m) / 500 (over 60m). Remittable for reasonable excuse (insufficiency of funds and reliance on an agent do NOT count) | | Late payment -- additional tax | 1% of the unpaid tax per month or part month (ITMA Art. 44(1)(a)); no cap stated in the statute; remittable at the Commissioner's discretion in limited cases | | Late payment -- interest | 0.6% per month or part month for tax payable on/after 31 Aug 2022 (ITMA Art. 44(2A)); "the total interest shall not exceed the amount of the said tax" | | Omission from a return | Additional tax of 1.5% per month of the endangered tax, max 60 months (items 5 and 7, Schedule to Art. 56(12)(c)); reduced to nil (rectified within 12 months, pre-enquiry), 0.1%/month (pre-enquiry, later), or 0.75%/month (post-enquiry-notice, pre-assessment) on voluntary rectification; no interest runs on this additional tax |ITMA Art. 44; Schedule to ITA Art. 56(12)(c)
TA24 explanation
TA24 is the prescribed form for the OPTIONAL 15% final tax on **gross rental income** under ITA Art. 31D, payable by 30 April of the following year. No deductions are allowed against the gross rent; the tax is final (no set-off or refund); income taxed this way is excluded from the return. If the option is not exercised, rental income is declared in the return at progressive rates (with limited deductions). Choosing between the two is a reviewer decision -- raise R-MT-7.ITA Art. 31D
Maltese Bank Statement Formats
| Bank | Format | Key Fields | Notes | |---|---|---|---| | BOV (Bank of Valletta) | PDF, CSV | Date, Description, Debit, Credit, Balance | Most common; description contains counterparty + reference | | HSBC Malta | PDF, CSV | Value Date, Description, Amount, Balance | Card transactions show merchant name | | APS Bank | PDF | Date, Particulars, Withdrawals, Deposits | Less common CSV; shorter descriptions | | Revolut Business | CSV | Date, Counterparty, Amount, Currency, Reference | Clean data; multi-currency possible | | Wise Business | CSV | Date, Description, Amount, Currency, Running Balance | Multi-currency; conversion fees separate line |
Key Maltese Banking Terms
| Term | English | Classification Hint | |---|---|---| | TRASFERIMENT / TRF | Transfer | Check direction for income/expense | | DEBIT DIRETT / DD | Direct debit | Regular expense (utility, subscription) | | STANDING ORDER / SO | Standing order | Regular expense (rent, loan) | | KARTA / CARD | Card payment | Expense -- check merchant | | HLAS / DEPOSIT | Deposit | Potential income | | SPEJJEZ / CHARGES | Bank charges | Deductible (WP2) | | INTERESSI | Interest | Interest income (WP4) or bank charge | | SELF-SERVICE / ATM | Cash withdrawal | Ask what cash was spent on |
Key Legislation References
| Topic | Reference | |---|---| | Income tax rates | ITA Cap. 123, Art. 56(1); annual rate amendments via Budget Measures Implementation Acts; MTCA published rate tables | | Allowable deductions | ITA Art. 14 (positive test) | | Disallowed deductions | ITA Art. 26 (negative test: domestic/private, capital, recoverable, voluntary) | | Capital allowances | ITA Art. 14(1)(f) and (j); S.L. 123.01 (Wear and Tear Rules); S.L. 123.173 (Industrial Buildings -- offices definition); ITA Art. 24 (balancing statements) | | Part-time regime (TA22) | ITA Art. 90A + Part-Time Work Rules; MTCA guidance (10% / EUR 12,000, basis 2025) | | Rental 15% final tax (TA24) | ITA Art. 31D | | Provisional tax | Provisional Tax (P.T.) Rules, S.L. 372.18 | | Filing deadlines | ITMA Cap. 372; MTCA Tax Return Cycle and annual extension notices | | Penalties / interest | ITMA Art. 44(1)(a) and (2A); Schedule to ITA Art. 56(12)(c) (Tables A/B, items 5-9) | | Record keeping | ITA / ITMA (6-year retention) |ITA Cap. 123; ITMA Cap. 372
Capital Allowances vs VAT Capital Goods
| System | Threshold | Purpose | |---|---|---| | VAT Capital Goods Scheme | EUR 1,160 gross | VAT capital-goods reporting only | | Income Tax Capital Allowances | No threshold | ALL business assets depreciated via WP15 |
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