Income and taxation

Value Added Tax

The standard rate of Value Added Tax is 18% and applies to the purchase most goods and services.

Income Tax

The rates of tax for an individual are progressive rates with a range of 0% to 35% (see tables below). The higher the income, the higher the tax rate. Corporate tax is fixed at 35%. A person who is resident in Malta for more than 183 days a year will be taxed in Malta on his/her income earned in Malta, as well as on any income earned overseas that is received in Malta. The law stipulates that, each month, the employer is obliged to deduct the amount of tax payable on a salary, at source. 

Employers and employees must also make weekly social security contributions which are generally equivalent to 10% of the employee’s salary, up to a maximum of €51.60 in 2023 per week (if born after 1962); however the actual contribution would depend on the type of employment. The employer must deduct the social security contribution in addition to the income tax deductions.

Malta residents are able to benefit from an extensive double tax treaty network that protects them from being taxed more than once, in different countries, on the same income. In a case where there is no double tax treaty in place, Malta has a system of unilateral relief whereby any taxes paid abroad may be used as a credit towards any income tax due in Malta on that same income.

Government bonuses

The Government announces an annual cost of living salary increase for all full-time employees. Statutory bonuses are payable to employees by the employer four times yearly as follows:

Tax rates for resident individuals

Tax rates for non-resident individuals