Deductible expenses in Malta

Deducting expenses is particularly important in Malta, since the application of the tax refund to shareholders implies the distribution of company taxed profits. This is why it is important for the company to have available accounting profits for distribution to ensure the refund of paid taxes.

Expenses and changes that have been effectively and exclusively used for generating company revenue can be deducted when calculating the taxable profit. It is not sufficient to show that a specific expense is a company expense or that it is linked to income; there must be proof that the expense was in fact used to generate income.

Consequently, expenses generated before the start of activity or after the end of activity are not generally deducted.

The tax law contains a series of specific rules that govern deductions of various kinds of expenses.

Taxation in Malta

Consolidated Group Income Tax

Maltese groups of companies can opt for consolidated taxation and be treated as a single fiscal unit.

Taxation in Malta

Set up of foundations

As an alternative to Trusts, Malta offers the possibility of creating Foundations. Foundations have the advantage of having legal personality. Learn more here.

Taxation in Malta

Trusts tax regime

In principle, the settlor may be taxed even if he or she does not receive any amounts upon transferring his or her property to the trust. The placement of property in a trust shall not create a more heavily taxed regime than that which would be applicable to any other transfer.

Taxation in Malta

Personal income taxation in Malta

Taxation in Malta for individuals with residence and domicile in Malta applies to worldwide income. In the case of persons which are either resident or domiciled in Malta, taxation focuses only over income obtained in Malta or remitted to Malta and on capital gains obtained in Malta.

Set up a company

Moving to Portugal

Working in Portugal

Resources

NEWCO

Consolidated Group Income Tax

Set up of foundations

Trusts tax regime

Personal income taxation in Malta