Malta Introduces Optional 15% Company Tax Rate – Legal Notice 188 of 2025

On 2nd September 2025, Malta issued Legal Notice 188 of 2025, introducing the 15% final income tax option under the Final Income Tax Without Imputation Regulations, 2025. This measure marks a significant change in Malta’s corporate tax framework, offering companies more choice while ensuring fairness.

Until now, companies in Malta faced a 35% corporate tax rate. Shareholders could later claim refunds once profits were distributed. While this system supported competitiveness, it was often complex and time-consuming. The new regulation introduces an alternative: a flat 15% final tax on specific income.

The 15% option aims to simplify tax compliance and reduce administrative effort. At the same time, safeguards prevent companies from paying less overall tax than under the existing regime. These rules maintain Malta’s strong reputation for compliance with international standards.

How it works:

✔ Companies can apply the 15% rate to income earned in the year before the 2025 tax year. They may also continue using it in later years.

✔ A company that chooses this option must stay in the system for at least five years. If it later returns to the traditional regime, it must remain outside the 15% system for another five years before opting back in.

What this means for businesses

The rules encourage stability and long-term planning. Companies must carefully consider whether the 15% rate supports their growth and reinvestment goals. For many, the new scheme may offer simpler compliance and predictable tax costs, especially if profits are not distributed as dividends.

Learn More About Tax Compliance in Malta

Businesses considering the 15% tax option should carefully assess whether it matches their long-term goals. Professional advice can help determine the best path forward.

For more information, visit GCS Malta’s Tax Compliance and Advisory Services page or contact us at tax@gcsmalta.com