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What Is the Corporation Tax Rate in Malta?

 
By Maltese income taxation legislation, companies resident in Malta are taxed at the standard rate of 35% on their worldwide income and capital gains. A refund is available to nonresident shareholders, which can reduce this taxation liability to between 0 and 10%.
 
Why Do Companies Incorporate in Malta?
 
Foreign investors set up a Maltese company to benefit from the effective corporate taxation on foreign income. The foreign tax rate in Malta is 35%, which you can drastically reduce by distributing all the profits to Maltese holding companies. We can assist you with much more than Malta’s tax rates. Our plans cover everything, from foreign source income to withholding taxes. Let us lend you a helping hand with the likes of allowable expenses, passive income, and tax exemption.
 
Inflation in Malta

In September 2024, the annual rate of inflation as measured by the RPI was 1.2 per cent, down from 1.5 per cent in August 2024, the NSO said. The highest annual inflation rates in September 2024 were registered in Other goods and services (4.4 per cent) and Personal care and health (3.4 per cent). On the other hand, the lowest annual inflation rates were registered in Furnishings and household equipment (-0.8 per cent) and Transport and communication (-0.5 per cent).

The largest upward contribution to the overall annual inflation was registered in the Food Index (+0.45 percentage points), largely due to higher prices of restaurant services. The second and third largest contributions were measured in the Other goods and services Index (+0.32 percentage points) and the Personal care and health Index (+0.30 percentage points), mainly on account of higher prices of insurances and articles of personal hygiene, respectively.

The downward contributions to the overall annual inflation were registered in the Transport and communication (-0.12 percentage points), the Furnishings and household equipment Index (-0.05 percentage points) and the Clothing and footwear Index (-0.03 percentage points), mainly reflecting lower prices of mobile phone services, household appliances and garments, respectively.

Malta's Economy

In Malta, Q1 GDP data indicates a slight deceleration in quarterly GDP growth, declining from 8.7% in Q1 2022 and 6.4% in Q1 2023 to 4.6% in Q1 2024, according to PwC Malta. This broad-based slowdown affects multiple sectors, including manufacturing, ICT, professional services, and retail. However, real estate and construction sectors showed improved performance during the same period.

From a consumer perspective, spending on food, beverages, housing, and furnishings declined compared to the previous year, contrasting with strong growth in expenditure on restaurants, hotels, and recreational activities. Survey data also align with the GDP figures, pointing to a more cautious economic sentiment among Maltese businesses in 2024.

Fitch Ratings has reaffirmed Malta’s 'A+' credit rating with a stable outlook, reflecting the country’s strong economic performance while noting potential fiscal risks ahead.

Malta's economy is showing significant momentum, with Fitch projecting a 5.7% GDP growth in 2024, far surpassing the Eurozone's 0.8% and other A-rated nations' 2%. This positive trend is supported by the robust services and financial sectors and a strong rebound in tourism, with tourist arrivals in the first half of 2024 exceeding pre-pandemic levels by 32%, according to Fitch. Read more about Maltas Economic Growth Outpaces EU with Revised 5 Percent GDP Forecast for 2024
 
Business Infrastructure in Malta
 
Although Malta is deemed to be a small island, it is equipped with infrastructure that maintains high standards for anyone wanting to expand with a business venture or startup idea. There are many business opportunities to explore within the Maltese market, including IT infrastructure, business support services, or opportunities for HR specialists.
 
In recent years, the economic climate in Malta has probably been declared by many experts as a stable business sector with significant credit ratings. As explained by prestigious economists, the Maltese business environment is volatile enough to get impacted by global crises, such as the Covid-19 pandemic, yet stable enough to reconstruct and adjust favorably due to a smaller structured economy.
 
Ideally, this may potentially be regarded as a safe economic climate for entrepreneurs to expand to; with great tax advantages and many governmental incentives, this particularly regularized business sector may be an exemplary environment to pursue an opportunity.
 
The Significance of Business Incorporations
 
Several entrepreneurs and imminent business owners may not realize the importance of incorporating a business through professional business formation processes to improve the credibility and authenticity of any particular company. Aside from credibility, business incorporation comes with many benefits, such as asset protection from creditors, tax advantages, and brand protection.
 
A professionally incorporated business has the interest of developing a more established brand reputation that may likely affect legitimacy and aid with building trust with potential customers.
 
While it may not be required for all businesses to seek to incorporate professional services, companies and startup ventures usually tend to benefit from the ease that comes with a service that handles the sometimes complex legal obligations and governmental documentation.
 
Our qualified accountant (Member of the Institute of Financial Services Practitioners in Malta) will help you in all aspects of your Malta Privat Limited Company, Malta Holding Company or Public Limited Company formation process, as our services do not stop at registering the company in Malta on your behalf. We will provide you all information regarding corporate tax and incorporate in Malta under maltese companies act.
 

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