Malta: Elective tax to be introduced

Elective tax would allow companies to avoid any top-up tax due elsewhere

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April 22, 2025

An enabling provision was enacted for the introduction of rules allowing for an elective tax (presumably resulting in a 15% effective tax rate) to be paid by entities in Malta.

The rules have not been published yet, but it is understood that the elective tax would apply from financial year 2024 and give Pillar Two in-scope companies the option to subject their profits to the elective tax in Malta to ensure that no top-up tax is due elsewhere.

The marginal note to the enabling provision makes it clear that it is an elective tax. Thus, it does not appear to change Malta’s previous announcements that Malta intends to defer application of an IIR, UTPR or QDMTT.

For more information, contact a KPMG tax professional in Malta:

John Ellul Sullivan | johnellulsullivan@kpmg.com.mt

Lisa Zarb Mizzi | lisazarbmizzi@kpmg.com.mt

Graziella Demanuele Bianco | gdemanuelebianco@kpmg.com.mt

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