Malta Income Tax -- Self-Employed Skill v2.0

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Section 1 -- Quick Reference

Field	Value
Country	Malta (Republic of Malta)
Tax	Income Tax (Einkommensteuer equivalent)
Currency	EUR only
Tax year	Calendar year (1 January -- 31 December)
Primary legislation	Income Tax Act, Chapter 123
Supporting legislation	Income Tax Management Act (Chapter 372); ITA Article 4C (TA22); ITA Article 14 (deductions); ITA Article 16 + 6th Schedule (capital allowances); ITMA Articles 44, 51, 52, 52A (penalties)
Tax authority	Commissioner for Revenue (CFR) / MTCA, Malta
Filing portal	MTCA e-Services
Filing deadline	30 June of the following year (TA24 and TA22)
Validated by	Pending — requires sign-off by a Maltese warranted accountant
Validation date	Pending
Skill version	2.0

Tax Rate Brackets (2025/2026)

Single Rates

Taxable Income (EUR)	Rate	Cumulative Tax at Top
0 -- 9,100	0%	EUR 0
9,101 -- 14,500	15%	EUR 810
14,501 -- 19,500	25%	EUR 2,060
19,501 -- 60,000	25%	EUR 12,185
60,001+	35%	--

Married Rates (joint computation)

Taxable Income (EUR)	Rate	Cumulative Tax at Top
0 -- 12,700	0%	EUR 0
12,701 -- 21,200	15%	EUR 1,275
21,201 -- 28,700	25%	EUR 3,150
28,701 -- 60,000	25%	EUR 10,975
60,001+	35%	--

Parent Rates (single parent maintaining a child)

Taxable Income (EUR)	Rate	Cumulative Tax at Top
0 -- 10,500	0%	EUR 0
10,501 -- 15,800	15%	EUR 795
15,801 -- 21,200	25%	EUR 2,145
21,201 -- 60,000	25%	EUR 11,845
60,001+	35%	--

Note (2026): The first 0% band was increased by EUR 500 for all categories as part of the 2026 budget measures.

Malta does not have a separate personal allowance -- the 0% band IS the personal allowance.

TA24 Key Boxes

Box	Description
Box 1	Gross income from self-employment
Box 2	Less: Allowable deductions
Box 3	Net profit/loss (Box 1 - Box 2)
Box 4	Other income (employment, rental, dividends, interest)
Box 5	Total income (Box 3 + Box 4)
Box 15	Capital allowances (depreciation per 6th Schedule)
Box 20	SSC Class 2 (amount actually paid in the tax year)
Box 25	Total deductions (sum of all deduction boxes including Box 15 and Box 20)
Box 30	Chargeable income (Box 5 - Box 25)
Box 35	Tax liability (applied from rate table to Box 30)
Box 36	Less: Provisional tax paid
Box 37	Less: Tax credits
Box 40	Tax due / refund (Box 35 - Box 36 - Box 37)

Conservative Defaults

Ambiguity	Default
Unknown marital status	STOP -- do not apply a rate table without marital status
Unknown filing status (TA24 vs TA22)	TA24 (full 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 6th Schedule rates
Unknown whether expense is entertainment	Treat as entertainment (blocked)

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Section 2 -- Required Inputs and Refusal Catalogue

Required Inputs

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 TA24 or part-time TA22).

Recommended -- all sales invoices, purchase invoices/receipts, SSC Class 2 payment records, prior year TA24 or tax assessment, 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 TA24 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."

Refusal Catalogue

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 single 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."

R-MT-5 -- Arrears / enforcement. "Client has outstanding tax arrears or is subject to MTCA enforcement action. The 1.6%/month combined late payment charges are severe and uncapped. Do not advise. Escalate to a warranted accountant immediately."

R-MT-6 -- VAT return requested. "This skill covers income tax (TA24/TA22) only. For Malta VAT, use the malta-vat-return skill."

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Section 3 -- Transaction Pattern Library

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.

3.1 Income Patterns (Credits on Bank Statement)

Pattern	TA24 Line	Treatment	Notes
Client name + TRANSFER, DEPOSIT, PAYMENT RECEIVED	Box 1 (gross revenue)	Business income	If Article 10 VAT-registered, extract net (excl. 18% VAT)
HONORARJU, FEES, PROFESSIONAL FEES, CONSULTANCY	Box 1	Business income	Professional fees -- typical for self-employed
STRIPE PAYOUT, STRIPE TRANSFER	Box 1	Business income	Platform payout -- match to underlying invoices
PAYPAL PAYOUT, PAYPAL TRANSFER	Box 1	Business income	Platform payout -- verify against invoices
WISE PAYOUT, WISE TRANSFER	Box 1	Business income	International platform payout
REVOLUT PAYOUT	Box 1	Business income	Check if business or personal Revolut
UPWORK, FIVERR, TOPTAL	Box 1	Business income	Freelance platform -- net of platform commission
PAGA, SALARY, STIPENDJU, EMPLOYER [name]	Box 4 (other income)	Employment income	NOT self-employment -- goes to Box 4
KIRI, RENT RECEIVED	Box 4	Rental income	Not self-employment income
INTERESSI, INTEREST RECEIVED	Box 4	Investment income	Interest income
DIVIDENDI, DIVIDEND	Box 4	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 = Box 1

3.2 Expense Patterns (Debits on Bank Statement) -- Fully Deductible (Box 2)

Pattern	Category	Treatment	Notes
KIRI UFFICCJU, OFFICE RENT, RENT [commercial address]	Office rent	Box 2 -- fully deductible	Dedicated business premises
PROFESSIONAL INDEMNITY, PI INSURANCE	Professional insurance	Box 2 -- fully deductible
ACCOUNTANT, AUDITOR, BOOKKEEP, CPA, ACCA FEES	Accountancy fees	Box 2 -- fully deductible
AVUKAT, LAWYER, LEGAL, NOTARY (business)	Legal fees	Box 2 -- fully deductible	Must be business-related
STATIONERY, OFFICE SUPPLIES, VIKING	Office supplies	Box 2 -- fully deductible
MARKETING, GOOGLE ADS, META ADS, FACEBOOK ADS	Marketing/advertising	Box 2 -- fully deductible
TRAINING, CPD, COURSE, SEMINAR, CONFERENCE	Training/CPD	Box 2 -- fully deductible	Must relate to current business
MIA, ACCA SUBSCRIPTION, PROFESSIONAL BODY	Professional subscriptions	Box 2 -- fully deductible
BOV CHARGE, HSBC CHARGE, BANK FEE, MAINTENANCE FEE	Bank charges	Box 2 -- fully deductible	Business account only
STRIPE FEE, PAYPAL FEE, TRANSACTION FEE	Payment processing fees	Box 2 -- fully deductible
POSTAGE, MALTAPOST (business)	Postage	Box 2 -- fully deductible	Business correspondence
DOMAIN, HOSTING, CLOUDFLARE, AWS, DIGITALOCEAN	IT infrastructure	Box 2 -- fully deductible	Under EUR 1,160 = expense; over = capital

3.3 Expense Patterns (Debits) -- SaaS and Software (Box 2 if under EUR 1,160)

Pattern	Category	Treatment	Notes
GOOGLE WORKSPACE, MICROSOFT 365, OFFICE 365	Software subscription	Box 2 -- fully deductible	Recurring subscription = operating expense
ADOBE, CANVA, FIGMA, NOTION, SLACK, ZOOM	Software subscription	Box 2 -- fully deductible
ANTHROPIC, OPENAI, GITHUB, ATLASSIAN, DROPBOX	Software subscription	Box 2 -- fully deductible
SOFTWARE LICENCE (perpetual, over EUR 1,160)	Capital item	Box 15 -- capitalise at 25%/year	Perpetual licence above threshold

3.4 Expense Patterns (Debits) -- Utilities (Box 2, may need apportionment)

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

3.5 Expense Patterns (Debits) -- Travel

Pattern	Category	Treatment	Notes
AIR MALTA, RYANAIR, WIZZ AIR, EASYJET	Flights	Box 2 if business travel	Must be wholly business purpose
HOTEL, BOOKING.COM, AIRBNB	Accommodation	Box 2 if business travel
BOLT, UBER, ECABS, TAXI	Local transport	Box 2 if business purpose
FUEL, ENEMED, PETROL	Vehicle fuel	T2 -- business % only	Requires mileage log
PARKING, CVA, MCP PARKING	Parking	T2 -- business % only

3.6 Expense Patterns (Debits) -- NOT Deductible

Pattern	Category	Treatment	Notes
RESTAURANT, DINNER, LUNCH, ENTERTAINMENT, CLIENT MEAL	Entertainment	NOT deductible	Blocked under Article 14 -- no partial deduction
PERSONAL, GROCERIES, SUPERMARKET, LIDL, PAVI	Personal expenses	NOT deductible	Private living costs
FINE, PENALTY, MULTA, PARKING FINE	Fines/penalties	NOT deductible	Public policy
CFR PAYMENT, INCOME TAX, TAX PAYMENT	Tax payments	NOT deductible	Income tax cannot reduce income
DRAWINGS, PERSONAL WITHDRAWAL, ATM (personal)	Drawings	NOT deductible	Not an expense

3.7 Expense Patterns (Debits) -- Capital Items (Box 15)

Pattern	Category	Annual Rate	Notes
LAPTOP, COMPUTER, MACBOOK, IMAC, DESKTOP	Computer hardware	25%	Box 15
PRINTER, SCANNER, COPIER	Office equipment	20%	Box 15
FURNITURE, DESK, CHAIR, FILING CABINET	Furniture/fittings	10%	Box 15
VEHICLE, CAR (business)	Motor vehicle	20%	Box 15, business % only
AIR CONDITIONING, AC UNIT	A/C equipment	20%	Box 15

3.8 Exclusions (Neither Income nor Expense)

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	Box 20 (SSC deduction)	Deductible in Box 20, NOT Box 2
VAT PAYMENT, CFR VAT	EXCLUDE	VAT liability payment, not expense
PROVISIONAL TAX, PT INSTALMENT	Box 36 (provisional tax paid)	Not an expense -- credit against liability

3.9 Maltese Banks -- Statement Format Reference

Bank	Common Patterns	Notes
BOV (Bank of Valletta)	TRANSFER, DD, SO, CHQ, CHARGES	PDF/CSV; Buchungstag 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

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Section 4 -- Worked Examples

Example 1 -- Client Payment (Article 10, VAT-registered)

Input line: 15/03/2025 ; BOV TRANSFER IN ; STUDIO KREBS GMBH ; PAYMENT INV-2025-003 ; +1,180.00 ; EUR

Reasoning: Client payment for services. Client is Article 10 VAT-registered, so EUR 1,180 includes 18% VAT. Net = EUR 1,000 (Box 1). EUR 180 is VAT collected (excluded from income -- it is a liability to CFR).

Classification: Box 1 = EUR 1,000. VAT EUR 180 excluded.

Example 2 -- SaaS Subscription (Fully Deductible)

Input line: 01/04/2025 ; HSBC DD ; ADOBE SYSTEMS IRELAND ; CREATIVE CLOUD APR ; -29.99 ; EUR

Reasoning: Monthly SaaS subscription. Under EUR 1,160, recurring. Fully deductible as operating expense. For Article 10 clients, the net amount (excl. recoverable VAT) is the expense. If Article 11, gross amount is the cost.

Classification: Box 2 = EUR 29.99 (or net if Article 10 with recoverable input VAT).

Example 3 -- Entertainment (Blocked)

Input line: 22/04/2025 ; BOV CARD ; WATERBISCUIT RESTAURANT ; CLIENT DINNER ; -85.00 ; EUR

Reasoning: Client entertainment. Blocked under Article 14. No partial deduction. No apportionment. Full block. Same as VAT treatment.

Classification: NOT deductible. Remove from Box 2 entirely.

Example 4 -- SSC Class 2 Payment

Input line: 10/01/2025 ; BOV DD ; CFR SSC CLASS 2 ; Q4 2024 ; -1,090.50 ; EUR

Reasoning: SSC Class 2 payment. Deductible, but in Box 20, NOT Box 2. SSC paid in 2025 = deduction in 2025 TA24.

Classification: Box 20 = EUR 1,090.50.

Example 5 -- Laptop Purchase (Capital Item)

Input line: 03/06/2025 ; HSBC CARD ; APPLE STORE MALTA ; MACBOOK PRO ; -1,899.00 ; EUR

Reasoning: Capital asset. Computer hardware depreciated at 25% per year (6th Schedule). EUR 1,899 x 25% = EUR 474.75 per year in Box 15. Do NOT put in Box 2.

Classification: Box 15 = EUR 474.75. NOT Box 2.

Example 6 -- Internal Transfer (Exclude)

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.

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Section 5 -- Tier 1 Rules (When Data Is Clear)

5.1 The Wholly and Exclusively Test

Legislation: Income Tax Act, Article 14

An expense is deductible only if incurred wholly and exclusively in the production of income. Mixed-use expenses must be apportioned. The apportionment method must be reasonable and documented.

5.2 Revenue Recognition

All business income goes to Box 1. For Article 10 clients, report net of VAT. For Article 11 clients, report gross (no VAT charged). VAT collected on sales is NOT income.

5.3 Capital vs Revenue

Capital items must go through Box 15 (capital allowances), not Box 2. There is no de minimis threshold -- all business assets are depreciated per the 6th Schedule. The VAT Capital Goods Scheme threshold (EUR 1,160) is a separate system.

5.4 Capital Allowance Rates (6th Schedule)

Asset Type	Annual Rate
Computer hardware	25%
Computer software	25%
Motor vehicles	20%
Plant and machinery	20%
Office equipment	20%
Air conditioning	20%
Furniture and fittings	10%
Commercial buildings	2%
Industrial buildings	2%

Depreciation is straight-line on cost. Starts in the year first used in business.

5.5 SSC Class 2 Deduction

SSC Class 2 paid during the tax year is deductible in Box 20 of the TA24. It is deducted in the year it is paid (cash basis).

5.6 Non-Deductible Expenses

Expense	Reason
Entertainment (client meals, events)	Blocked under Article 14
Personal living expenses	Not business-related
Fines and penalties	Public policy
Income tax itself	Tax on income
Capital expenditure	Goes through Box 15
Drawings / personal withdrawals	Not an expense
Personal car insurance (unapportioned)	Personal

5.7 VAT Interaction

Scenario	Income Tax Treatment
VAT collected on sales (Article 10)	NOT income -- exclude from Box 1
Input VAT recovered (Article 10)	NOT an expense -- exclude from Box 2
Input VAT blocked/non-deductible (Article 10)	IS an expense -- include in Box 2
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

5.8 TA22 Regime (Part-Time Self-Employment)

Legislation: Income Tax Act, Article 4C

Condition	Requirement
Employment status	Must be in full-time employment with Class 1 SSC
Net self-employment profit	Must not exceed EUR 12,000
Tax rate	Flat 10% on net self-employment profit
SSC	No additional Class 2 -- Class 1 covers all

If net profit exceeds EUR 12,000: first EUR 12,000 at 10% on TA22, excess at progressive rates on TA24.

5.9 Provisional Tax

Legislation: Income Tax Management Act, Chapter 372

Instalment	% of Prior Year Tax	Deadline
1st	20%	30 April
2nd	30%	31 August
3rd	50%	21 December

Always based on prior year's final liability. First year = no provisional tax due.

5.10 Filing Deadline and Penalties

Item	Detail
TA24/TA22 filing deadline	30 June of following year
Late filing	EUR 50 + EUR 10/month (max EUR 500)
Late payment surcharge	1% per month -- UNCAPPED
Late payment interest	0.6% per month -- capped at original tax
Combined late payment	1.6% per month total
Incorrect return	Up to EUR 2,000

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Section 6 -- Tier 2 Catalogue (Reviewer Judgement Required)

6.1 Home Office Deduction

Legislation: Income Tax Act, Article 14

• Calculate proportion of home used for business: dedicated room(s) as percentage of total rooms or floor area
• Apply that percentage to: rent or mortgage interest, electricity, water, internet, maintenance
• Must be a dedicated workspace -- a dual-use room (kitchen table, living room) does NOT qualify
• Client must document the calculation and retain for 6 years

Conservative default: 0% deduction until reviewer confirms room arrangement.

Flag for reviewer: Confirm room count, floor area basis, and that workspace is genuinely dedicated.

6.2 Motor Vehicle Business Use

• Only the business-use percentage of fuel, insurance, maintenance, and depreciation is deductible
• Client must maintain a mileage log (business trips vs total mileage)
• Capital allowance on vehicle: 20% straight-line on cost, multiplied by business %

Conservative default: 0% business use until mileage log provided.

Flag for reviewer: Confirm business percentage is documented and reasonable.

6.3 Phone / Internet Mixed Use

• Business use portion only
• Client must provide reasonable estimate of business vs personal use

Conservative default: 0% deduction until business percentage confirmed.

6.4 Bad Debt Write-Off

• Deductible only if: (1) income was previously declared in Box 1, (2) all reasonable recovery steps taken, (3) debt is genuinely irrecoverable
• Flag for reviewer to confirm all three conditions

6.5 Software Capitalisation vs Expensing

• Recurring subscriptions (monthly/annual): expense in Box 2 fully
• Perpetual licence over EUR 1,160: capitalise at 25%/year in Box 15
• Flag for reviewer if nature of licence is unclear

6.6 Low-Value Asset Treatment

• Some practitioners expense assets under approximately EUR 700 immediately
• Flag for reviewer to confirm treatment -- strictly, all assets should be depreciated per 6th Schedule

6.7 Asset Disposal

• Sale proceeds minus written-down value = balancing charge (taxable) or balancing allowance (deductible)
• Flag for reviewer to confirm disposal proceeds and written-down value

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Section 7 -- Excel Working Paper Template

MALTA INCOME TAX -- TA24 WORKING PAPER
Tax Year: 2025
Client: ___________________________
Marital Status: Single / Married / Parent

A. BOX 1 -- 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 Box 1                                ___________

B. BOX 2 -- 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 Box 2                               ___________

C. BOX 3 -- NET PROFIT (A4 - B14)               ___________

D. BOX 4 -- OTHER INCOME
  D1. Employment income                          ___________
  D2. Rental income                              ___________
  D3. Investment income                          ___________
  D4. TOTAL Box 4                                ___________

E. BOX 5 -- TOTAL INCOME (C + D4)               ___________

F. DEDUCTIONS
  F1. Box 15 -- Capital allowances               ___________
  F2. Box 20 -- SSC Class 2                      ___________
  F3. Box 25 -- Total deductions (F1 + F2)       ___________

G. BOX 30 -- CHARGEABLE INCOME (E - F3)         ___________

H. TAX COMPUTATION (pass to deterministic engine)
  H1. Box 35 -- Tax liability                    ___________
  H2. Box 36 -- Provisional tax paid             ___________
  H3. Box 37 -- Tax credits                      ___________
  H4. Box 40 -- Tax due / refund                 ___________

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?
  [ ] Capital items in Box 15 (not Box 2)?
  [ ] SSC in Box 20 (not Box 2)?

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Section 8 -- Bank Statement Reading Guide

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 (Box 2)
INTERESSI	Interest	Interest income (Box 4) or bank charge
SELF-SERVICE / ATM	Cash withdrawal	Ask what cash was spent on

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Section 9 -- Onboarding Fallback

If the client provides a bank statement but cannot answer onboarding questions immediately:

1. Classify all transactions using the pattern library (Section 3)
2. Mark all Tier 2 items as "PENDING -- reviewer must confirm"
3. Apply conservative defaults (Section 1)
4. Generate the working paper (Section 7) with clear flags
5. Present the following questions to the client:

ONBOARDING QUESTIONS -- MALTA INCOME TAX
1. Marital status: single, married, or single parent?
2. Employment status: fully self-employed (TA24) or employed + side income (TA22)?
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?
8. Provisional tax: total amount paid in the tax year?
9. Any other income (employment, rental, dividends, interest)?
10. Any capital assets purchased during the year?

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Section 10 -- Reference Material

Key Legislation References

Topic	Reference
Income tax rates	Income Tax Act, Chapter 123, Tax Rate Schedule
Allowable deductions	ITA Article 14
Capital allowances	ITA Article 16 + 6th Schedule
TA22 part-time regime	ITA Article 4C
Provisional tax	ITMA Chapter 372
Filing deadlines	ITMA Chapter 372
Penalties	ITMA Articles 44, 51, 52, 52A
Record keeping	ITA; ITMA (6-year retention)

Capital Allowances vs VAT Capital Goods -- Important Distinction

System	Threshold	Purpose
VAT Capital Goods Scheme	EUR 1,160 gross	Determines VAT Box 30 treatment
Income Tax Capital Allowances	No threshold	ALL business assets depreciated via Box 15

A EUR 500 printer: depreciated for income tax (25% x EUR 500 = EUR 125/year in Box 15) but does NOT go to VAT Box 30 (below EUR 1,160 threshold). These are entirely separate systems.

Test Suite

Test 1 -- Standard single, mid-range income. Input: Single, gross revenue EUR 45,000, allowable expenses EUR 13,000, capital allowances EUR 375, SSC EUR 3,000, provisional tax EUR 3,500. Expected: Box 3 = EUR 32,000, Box 15 = EUR 375, Box 20 = EUR 3,000, Box 25 = EUR 3,375, Box 30 = EUR 28,625. Tax = EUR 4,341. Box 40 = EUR 841 due.

Test 2 -- Married, higher income. Input: Married, gross EUR 80,000, expenses EUR 20,000, SSC EUR 4,362, no provisional tax (first year). Expected: Box 3 = EUR 60,000, Box 20 = EUR 4,362, Box 30 = EUR 55,638. Tax = EUR 9,885. Box 40 = EUR 9,885 due.

Test 3 -- TA22 eligible. Input: Full-time employed, side net profit EUR 8,000, Class 1 SSC through employer. Expected: TA22 at 10% = EUR 800. No Class 2 SSC.

Test 4 -- Entertainment blocked. Input: EUR 2,000 client entertainment in Box 2. Expected: Remove from Box 2. Not deductible.

Test 5 -- Capital item in wrong box. Input: Laptop EUR 1,500 in Box 2. Expected: Remove from Box 2. Add EUR 375 (25%) to Box 15.

Test 6 -- Article 11 VAT as expense. Input: Article 11 client. Invoice EUR 236 gross (EUR 200 + EUR 36 VAT). Expected: Box 2 = EUR 236 (full gross). Cannot reclaim VAT.

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PROHIBITIONS

• NEVER apply a rate table without knowing marital status
• NEVER compute Box 35 tax figures directly -- pass chargeable income to the deterministic engine
• NEVER allow entertainment expenses in Box 2
• NEVER allow income tax itself as a deduction
• NEVER allow fines or penalties as a deduction
• NEVER include VAT collected on sales in Box 1 for Article 10 clients
• NEVER allow a capital item in Box 2 -- it must go through Box 15
• NEVER put SSC in Box 2 -- it goes in Box 20
• NEVER use current year income for provisional tax -- always prior year final liability
• NEVER present tax calculations as definitive -- always label as estimated

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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 (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

The most up-to-date, verified version of this skill is maintained at openaccountants.com. Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.

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