Malta: Income Tax

Malta and Bulgaria have amended their double taxation treaty to align the Mutual Agreement Procedure with OECD standards, introducing a justification requirement that was conspicuously absent from the original text. While this change brings the treaty into conformity with international practice, the absence of mandatory arbitration provisions means taxpayers still lack a binding dispute resolution mechanism if competent authorities reach an impasse.

The Malta Tax and Customs Administration has extended the deadline for filing income tax returns for the Year of Assessment 2026 to 31 July 2026, affecting individuals, partnerships, trusts, and various institutions. With the online filing portal now active and the deadline approaching, taxpayers are encouraged to begin preparing their documentation and seek professional guidance to ensure compliance and optimize their tax position.

The Malta Permanent Residence Programme (MPRP) and Global Residence Programme (GRP) serve distinct purposes under separate legal frameworks—one grants permanent residence rights, the other provides special tax status with a 15% flat rate on remitted foreign income. Understanding how these programmes interact, which property investments qualify for both, and whether pursuing them simultaneously makes financial sense requires careful analysis of individual circumstances and income profiles.

The Nomad Residence Permit was introduced to attract remote professionals and digital nomads to Malta, reinforcing the country's position as an innovation-friendly jurisdiction for location-independent work.

For decades, US businesses viewed tax treaties primarily as technical instruments and mechanisms to reduce withholding tax or avoid double taxation on cross-border income.

Malta has introduced a special tax regime for senior employees of family offices, back offices and treasury management operations, which offers a reduced flat rate of income tax of 15% on employment income.

There were several important legislative changes which were published over the course of September 2025. Below is an overview of the key updates across different areas.

Double taxation occurs when tax is levied on the same income in two different points, which may also be in a cross-border context.

The Government of Malta has published Legal Notice 188 of 2025 – the Final Income Tax Without Imputation Regulations, 2025, in relation to Article 22B of the Income Tax Act. Such legal notice provides companies and certain trusts with the option to elect for a final tax rate in lieu of the imputation system, that has long characterised Malta's corporate tax regime.