Malta Final Tax on Company Profits (2026)
Malta final tax at 15%: how does it affect company profits and dividends? See when the election applies, how it compares with refunds and what owners keep.
How does Malta’s 15% final tax affect the dividends you receive from your own Maltese company in the 2026 year of assessment?
An eligible Maltese company can elect for a 15% final tax on qualifying income. Distributions from its final tax account carry no further Maltese tax for the shareholder. The result depends on the company’s income, the applicable minimum tax under the election and the shareholder’s circumstances.
The example below uses illustrative figures for the 2026 year of assessment. The regime applies from the 2025 year of assessment.
What changes under the 15% election?
Under the standard system, a Maltese company generally pays 35% corporate income tax. For qualifying trading profits, a shareholder may be able to claim a refund of six-sevenths of the company tax after a distribution. That can bring the combined company tax and refund to 5% of the underlying profit, before considering how Malta taxes the shareholder. A resident owner should check the personal treatment of both the dividend and any refund before using 5% in a cash-flow forecast.
Under the election, the company pays 15% final tax on eligible chargeable income, subject to a floor based on the effective tax that would otherwise apply under the standard system after shareholder refunds. The tax is final and non-refundable. Profits taxed under the election go into the company’s final tax account. Dividends from that account carry no further Maltese tax for the shareholder.
What does the calculation look like?
Suppose a Maltese company earns €200,000 in eligible chargeable income. Assume the election applies, the tax floor does not increase the amount due and the company can distribute all the remaining profit.
Eligible chargeable income is €200,000.
Final corporate tax at 15% is €30,000.
Profit available for distribution from the final tax account is €170,000.
The example isolates corporate tax and Maltese tax on the dividend. Social security and company operating costs depend on how the director works and is paid.
What should an owner check before electing?
The election is formal and binds the company for at least five consecutive years of assessment. Compare both regimes over that period, including how much profit the company expects to retain or distribute and the shareholder’s tax position when distributions are made.
For a Maltese resident who is non-domiciled, the remittance basis concerns foreign-source income. A dividend from a Maltese company is Maltese-source income. With a foreign holding company, the analysis also depends on where decisions are actually made and how distributions are taxed when they reach the individual.
FAQ
Does the company need a holding company to elect for the 15% tax?
An eligible Maltese company can make the election with an individual shareholder. Check the company’s eligibility and the types of income it earns before electing.
Is all company income eligible for the election?
Certain dividends and income already subject to final tax are excluded. Check how the company’s income is classified before applying the rate to its taxable profits.
Can I claim a shareholder refund on profits taxed under the election?
The tax paid under the election is final and non-refundable. Distributions from the final tax account do not generate a shareholder refund.
Does the 15% cover the director’s social security?
Social security is assessed separately. The applicable contribution depends on the director’s status and how they are paid.
Can the company switch back after a year?
The election binds the company for at least five consecutive years of assessment. Include expected changes in profitability and distributions when comparing the two regimes.
Sources
Final Income Tax Without Imputation Regulations, 2025
This article explains the general framework and does not constitute personalised tax advice. Rules can change from year to year, and the tax treatment depends on your exact circumstances.
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