Individual - Tax administration

Last reviewed - 26 January 2024

Taxable period

The tax returns are filed on a calendar-year basis.

Tax returns

Husband and wife (or two partners who have registered their partnership as a civil union) are jointly responsible for filing tax returns, and spouses must choose who between them is to be registered as the ‘responsible spouse’. Typically, the ‘responsible spouse’ cannot be changed before the lapse of five years. The responsible spouse may elect to have the tax on the other spouse's earned income/pension income computed separately. If a separate computation is chosen, husband and wife (or partners as aforesaid) are assessed separately at the single or the parents taxpayers' rates. Unearned income is taxable in the hands of the spouse/partner earning the higher level of income.

A couple that is married and living together may elect to receive a separate income tax return if both spouses earn employment, self-employment (excluding directors fees), or pension income from past employment, or they have an agreement of separation of assets.

The tax return, together with a self-assessment, must be submitted by the end of June of the year following the basis tax year. In certain instances and subject to the discretion of the Commissioner for Tax and Customs, an individual may not be required to file a tax return. In such instances, one should receive a statement from the Tax Authorities outlining one's tax position; if one does not agree with the position outlined in the said statement, one may then request a tax return and file it accordingly. Penalties are incurred on late filing of returns. The self-assessment is deemed to represent the correct tax position, and an assessment should not be raised unless the Commissioner for Tax and Customs disagrees with the self-assessment.

Payment of tax

In terms of the Final Settlement System (FSS) Rules, an employer is required to withhold income tax and social security contributions at source from the employees’ salaries (including taxable fringe benefits), which, in most cases, equals the individual's total tax liability. Such deductions of tax/social security should be forwarded by the employer to the Commissioner for Tax and Customs within specific time frames.

Where income is not subject to the FSS (e.g. self-employed persons), the taxpayer is required to make three payments in the basis tax year under the provisional tax (PT) system. The PT payments are based on the last self-assessment filed by the individual, and the payments are divided into three instalments of 20%, 30%, and 50%, respectively. The tax liability that is still due at the tax return due date, after deducting all tax credits, must be settled immediately with the submission of the return. Payments of income tax due by 31 August onwards, which will not be paid by the due date, will be subject to interest at the rate of 0.6% (increased from 0.33%) per month or part thereof, until the tax remains unpaid. The total interest shall not exceed the amount of the tax due.

Tax refunds due by the Commissioner are subject to interest at the rate of 0.6% per month or part thereof from 1 September 2022.

Provisional tax is also payable at 7% on the selling price of certain assets disposed of on account of tax.

A final WHT of 15% is imposed on specified types of investment income (e.g. banking interest paid to Maltese residents), unless the taxpayer opts to be taxed at the tax rates applicable to him/her.

COVID-19 fiscal assistance - Postponement of payment of certain taxes

For self-employed persons suffering a significant downturn in their turnover as a result of the coronavirus pandemic, payments of provisional taxes, social security contributions, and VAT that fell due from August 2020 up to and including December 2021 were deferred to a later date. For eligible persons claiming the benefits of this tax deferral scheme, the settlement period for the afore-mentioned tax payments starts in May 2022 up until December 2024.