On 11 July 2025, the Companies (Amendment) Act (Act No. XVIII of 2025) was published, introducing important changes to Maltese company law.
The Act, which is not yet in force, will add a new Article 214A to the Companies Act, creating a simplified dissolution procedure for private limited liability companies.
This new process will allow directors of inactive companies to apply directly to the Registrar of Companies to have the company struck off the register, without the need to appoint a liquidator.
To qualify, the company must have been dormant for at least six months, with no trading activity, employees, outstanding filings, or pledged shares.
The procedure is designed to make winding up faster, cheaper, and less burdensome, particularly for small or dormant companies.
Safeguards remain in place: directors must provide statutory declarations, shareholder approval, and ensure all accounts are closed. False declarations may result in fines or imprisonment, and a three-month objection period will still apply.The reform is expected to ease the administrative load on businesses and streamline the register, though its effectiveness will depend on how it is implemented.
The Government of Malta has published LN 137 of 2025, introducing a special tax regime for individuals earning income from artistic activities.
Under the new rules, artists will be taxed at a flat rate of 7.5% on their net earnings (after deductible expenses), up to a maximum of €50,000.
Any income above this threshold must be declared in the individual’s tax return and taxed at the normal progressive rates.
It is also clarified that the 10% part-time work tax rate under Article 90A of the Income Tax Act does not apply to artistic income.
For income to qualify, it must be certified by Arts Council Malta as derived from artistic activity.
Through Legal Notice 147 of 2024, the Government of Malta has introduced new rules on the taxation of income earned from sports activities.
Under the rules, individuals receiving income from employment related to sports may opt to have such income taxed at a flat rate of 7.5% on the gross amount, instead of the standard progressive rates. This tax is final, meaning no refunds or set-offs will be granted.
The reduced rate applies to income derived from services provided in the course of, or directly related to, a sports activity, whether on a full-time or part-time basis, in the following roles:
• Registered players or athletes
• Licensed coaches
• Licensed match officials
• Match analysts
• Team managers or sporting directors
• Sport administrators
• Team doctors
• Team physiotherapists
From 1 January 2025, a new EU-wide special scheme for small enterprises will come into effect and has been transposed into Maltese law through amendments to the Value Added Tax Act (VATA).
The scheme allows small businesses established in one EU Member State to exempt cross-border supplies from VAT in another Member State, in the same way domestic small businesses may already benefit from VAT exemptions locally.
In Malta, the new provisions are split into two parts:
• Article 11A – for taxable persons established in Malta
• Article 11B – for taxable persons established outside Malta
Article 11A – Small Undertakings Established in Malta
Businesses established in Malta may apply to register under Article 11A if they qualify as small undertakings under the Sixth Schedule of the VATA. Registration will only take effect once confirmed by the Commissioner for Tax and Customs, and the VAT number will include the suffix “EX”.
To qualify, an undertaking must meet the following conditions:
• Its Union annual turnover in the previous calendar year is below the EU threshold;
• It makes supplies in at least one Member State where it is not established and qualifies for that Member State’s small business exemption;
• The value of such supplies does not exceed the exemption threshold of that Member State.
Applications under Article 11A must be submitted electronically via the designated portal and must include company details, Member States where the scheme will be used, and turnover figures for both the previous and current year.
Enterprises registered under Article 11A are obliged to electronically notify the Commissioner of any changes, including:
• The decision to apply the scheme in a new Member State;
• or The decision to stop applying the scheme in a particular Member State.
The exemption becomes effective only once the Commissioner has notified approval.
On 2 September 2025, Malta introduced a significant change to its corporate tax landscape through Legal Notice 188 of 2025, officially titled the Final Income Tax Without Imputation Regulations, 2025.
This new framework provides companies and certain trusts with an optional alternative to Malta’s long-standing full imputation system — by offering a flat 15% final tax on chargeable income.
The change represents one of the most notable evolutions in Malta’s tax system in years, designed to increase simplicity, flexibility, and international alignment.
For decades, Malta’s corporate tax system has operated under a full imputation mechanism.
Under this setup, when a Maltese company distributes dividends, shareholders receive credit for the corporate tax paid. This system effectively eliminates double taxation — ensuring that the same income isn’t taxed twice at both corporate and shareholder levels.
With ongoing global tax reforms, including the OECD’s Pillar Two minimum tax initiative and EU pressure for simplification, Malta has sought to modernize its system while maintaining competitiveness.
The new 15% final tax regime allows entities to elect a simpler, flat-rate option — without the complexities and refund mechanisms tied to the imputation model.
Legal Notice 188 of 2025 applies to “entities” as defined under Article 22B of the Income Tax Act.
This includes:
Entities must formally elect to be taxed under the new regime. Those who do not elect will continue under the standard imputation system.
The election can apply to chargeable income accruing or derived during the fiscal year preceding the Year of Assessment 2025 (i.e., basis year 2024) and for subsequent years.
Entities choosing the new regime will be taxed at a 15% final rate on their chargeable income.
This tax is final — meaning it cannot be credited, refunded, or set off against other taxes.
The 15% rate does not apply to:
Once an entity elects the new regime, it must remain within it for at least five consecutive years.
If it later reverts to the ordinary system, it must stay there for five years before re-electing.
The total tax payable under the 15% regime cannot result in a lower liability than what the entity would have paid under the standard imputation system (after taking into account refunds).
This ensures the new system isn’t used solely for rate arbitrage.
Profits taxed under the new regime are allocated to a Final Tax Account.
Any dividends distributed from this account are deemed fully taxed and carry no right to shareholder refunds.
The introduction of Legal Notice 188 of 2025 creates an important decision point for companies and trusts.
Entities should take a structured approach before deciding whether to elect for the new regime.
Determine whether your entity qualifies as an “entity” under the Regulations — namely a company, body of persons, or trust treated as a company for tax purposes.
If you are uncertain, consult your tax adviser or the Commissioner for Tax and Customs’ guidance (once issued).
Analyse the composition of your income to determine:
Run a comparative analysis between:
This financial modelling helps identify whether the new system leads to a higher, lower, or similar overall tax burden.
Because the election carries a five-year lock-in period, entities should project forward at least five years to evaluate how business changes — such as profit levels, ownership shifts, or restructuring — may influence the outcome.
Remember: once opted in, you cannot switch out until the five-year period ends.
Before making the election, obtain advice from:
The election must be made in the form and manner prescribed by the Commissioner for Tax and Customs.
At the time of writing, detailed procedural guidance is still expected. Entities should monitor for any official guidelines or circulars explaining:
Once under the regime:
As Malta continues adapting to global tax reforms, further clarifications, amendments, or administrative guidelines may follow.
Staying updated ensures your entity remains compliant and continues to benefit from the intended simplification of the new system.
Legal Notice 188 of 2025 marks a new chapter in Malta’s corporate taxation — offering a simplified, elective 15% final tax regime that coexists with the traditional imputation system.
While the change introduces flexibility, it also demands careful evaluation before opting in.
For many businesses, the key question will be whether certainty and simplicity at 15% outweigh the potential refund advantages of the imputation model.Each entity’s position is unique, making professional advice and forward planning essential.