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Malta BudgetGuide

Proposed reform

Small company 25% tax on retained profit

A 25% tax rate on retained or reinvested profit is announced for qualifying companies with turnover not above €1 million, compared with 35% on distributed profit.

Budget 2027Rules pending

Amount

25% on retained profit

Previous

35% standard rate

Effective from

Awaiting guidance

What it means

The rules are pending. This is not an unconditional 10-point reduction and should not be used to compute tax payable.

Affects: Companies & SMEs.

Who qualifies and what is excluded

  • Turnover not above €1 million.
  • Profit retained or reinvested.

Still to be confirmed

  • Definition of qualifying company and reinvestment.
  • Interaction with refunds on distribution.

Sources

  • Diskors tal-Budget 2027, Ministry for Finance (Malta), 2026-10-26. Printed p. 34 (PDF p. 38)
  • Diskors tal-Budget 2027, Ministry for Finance (Malta), 2026-10-26. Printed p. 35 (PDF p. 39)

Related measures

Budget 2027Rules pendingProposed reform

Taxation of air space transfers

New rules require fuller disclosure of the total price in development deals involving the sale of air space.

Proposed rules; implementation not confirmed.

Speech printed p. 42 · PDF p. 46

Budget 2027Rules pendingProposed reform

VAT reverse charge in construction

For covered construction transactions the buying business, not the supplier, accounts for VAT.

Proposed rules; implementation not confirmed.

Speech printed p. 43 · PDF p. 47

Budget 2027AnnouncedBudget measure

Administrative penalties for missing VAT receipts

Penalties of €100, €200, €400 and then €500 apply for successive failures to issue correct invoices or receipts within 24 months.

€100 / €200 / €400 / €500

Speech printed p. 44 · PDF p. 48