Last Updated: 30/05/2022
Registration of Companies for Income Tax purposes
The Office of the Commission of
Revenue recognises the importance of registering companies for tax purposes in
Malta. Persons setting up a company must first register the company with the Registrar of Companies. Once all
documents are received, the registration of companies for tax purposes in Malta
is straightforward. A company is required to register for income tax purposes
when:
- A company is incorporated in Malta
- A company’s management and control is located in
Malta
- A company carries on an activity in Malta.
Generally, once
a company is incorporated or a place of business is registered with the Registrar of Companies in Malta, the company
will be registered with the Commissioner for Revenue and an income tax number
(in the format of a nine-digit number) will automatically be generated.
In other instances where Maltese
source income is earned without a permanent establishment in Malta, an
application can be sent to the International and Corporate Tax Unit to clarify the companies tax status. Enquiries can be sent to [email protected].
Registration of Companies for VAT purposes
All companies
registered in Malta must also register for VAT. VAT obligations include several
compliance and payment obligations and it’s important to understand these at
registration stage.
A simple way to
apply for VAT is through the single e-form which can be downloaded here.
Companies can be registered for VAT under any of the following Articles:
1. Article
10: Companies that undertake the following activities are required to
register under Article 10 of the VAT Act:
∙ Supply of taxable or exempt with credit goods or services in Malta,
∙ Export of goods from Malta to third countries, outside the EU,
∙ Make intra- community supplies or provide services taking place in EU member states other than Malta
A company taxable under Article
10 is eligible to claim input tax for purchases made which are attributable to
its supplies.
2. Article
11: Only companies that qualify as a small undertaking in terms of the
provisions of the Part 1, of the 6th schedule, of the VAT Act 1998 can register
under Article 11. These companies cannot charge VAT to their customers nor can
they claim input VAT on their purchases and expenses and are therefore
considered as exempt from VAT. VAT thresholds can be found on the following link.
Taxpayers may opt out of Article 11 registration even if they fulfil the
threshold requirements and opt to register under Article 10 instead. The
requirements and obligations imposed under Article 10 registration would apply
in the normal manner.
3. Article 12: Companies that which are
not registered under Article 10 and who make intra-community acquisitions of
goods in Malta whose value exceeds €10,000 in a calendar year are required to
register under Article 12 of the VAT Act. Article 12 registration is also
required where a company purchases services from suppliers established outside
Malta (both EU and non-EU) and the place of taxation of such service is deemed
to be Malta and where the liability of payment of the tax lies with the
customer.
To register for VAT and receive a
Maltese VAT number, Companies may complete the prescribed form online. Click here to access the form.
Liquidation and Insolvency of a Company
The liquidation of companies in
Malta is governed by the Companies Act. The later imposes several formal
requirements on how the liquidation of a company in Malta is to take place. The
formal process seeks to protect both creditors, employees and other
stakeholders. In this regard the Companies Act requires that a liquidator be
appointed to manage the liquidation process and ensure that all the
requirements imposed by local legislation are meet. One important duty of a
liquidator is to ensure that the company meets its tax obligations and pending
tax dues. In this regard the liquidator is regulated by special obligations and
responsibilities under Article 7 of the ITMA.
Where a liquidation takes place, a liquidator must ensure
that:
· An annual tax return for the last year of the
company’s existence is completed and submitted in a timely manner,
· Ensure that the company is not struck off the
Registry of Companies before it obtains the necessary tax clearance from the
Office of the Commission of Revenue.
Once a company has stopped
trading and has abided by all the formalities imposed by the Malta Business
Registry as well as the Companies Act and has settled all pending dues with the
Commissioner for Revenue, the company may make a formal request for
de-registration. This can be done by the company’s representative through a
written request sent to the International and Corporate Tax Unit informing the
latter that the company has completed the liquidation process and should be de-registered
for tax purposes.
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