Tax Accounting | Tax Compliance Services in Malta
The main legislation regulating income tax in Malta is the Income Tax Act and the Income Tax Management Act. Companies registered in Malta, including Branches seeking to benefit from Malta's tax refund regime are required to prepare audited financial statements and tax returns to local authorities. Our offices offer tax accounting services fully compliant with local fiscal legislation. Due to the refund system currently in place, tax accounting is of utmost importance. Tax accounts include the
Final Tax Account (FTA)
The Final Taxed Account (FTA) includes distributable profits that have suffered tax. This includes all souses of income which have been subject to final withholding taxes in Malta and is the first account to which profits are allocated before allocation to subsequent accounts
Malta Tax Account (MTA)
Malta Tax Account includes all profits which have suffered tax and which have not been allocated to the Foreign Income Account or Immovable Property Account.
Immovable Property Account (IPA),
Immovable Property Account includes all distributable profits which have suffered tax and are related directly or indirectly to immovable property located in Malta. Profits arising from capital gains, dividends or rents with respect to property arising outside Malta are allocated to the Foreign Income Account. Distributable Profits allocated to the Immovable Property Account are not available for tax refunds.
Foreign Income Account (FIA),
Foreign Income Account (FIA) includes categories of distributable profits arising from:
- profits resulting from royalties and similar income arising outside Malta and from dividends, capital gains, interest, rents, income or gains derived from a participating holding or from the disposal of such holding;
- profits resulting from investments, assets or liabilities situated outside Malta;
- all profits or gains of a company registered in Malta, which are liable to tax in Malta and attributable to a permanent establishment (including a branch) situated outside Malta;
- profits resulting from dividends paid out of the foreign income account of another company registered in Malta; and
- profits or gains resulting to a company registered in Malta authorised under article 7 of the Insurance Business Act, not being a company registered under the Malta Financial Services Authority Act, from the business of insurance in relation to risks situated outside Malta.
Untaxed Account (UTA)
The balance remaining after the allocation to the above accounts shall be allocated to the Untaxed Account.
Allocation of income to the appropriate tax accounts ensures tax refunds are processed accordingly.