Company in Malta

Malta is an EU Member State with
an Exceptionally Advantageous Tax Regime

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Malta company formation package: 345 EURO – arrangement of Malta company formation and bank account (via officially licensed local member / partner firms) including VAT and Tax registration. "FBS KOTSOMITIS", operating since 1998, is a well-known and established international professional services network with officially licensed and regulated local member / partner firms. Contact us to start process by sending an email to enquiries@fbsmalta.com, by using our contact form or by calling at +356 2338 1500.

Capital Allowances and Deductions

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Contact our firm’s partners for a free quotation or free and non-committal professional advice. Next steps:
1. Contact our partners by email
2. Contact us via our online information request form

Malta Capital Allowances and Deductions

The Deduction and Wear and Tear of Plant and Machinery Rules (S.L. 123.01) sets forth the depreciation of plant and machinery used in the creation of income.

Unless otherwise set forth in the aforesaid rules, the depreciation is calculated on a straight-line method and may only be availed of upon evidence attesting the proper costs of the assets.

ASSET USED IN PRODUCTION DEPRECIATION (years)
Air-conditioners 6
Aircraft 12
Cable Infrastructure 20
Catering Equipment 6
Communication and Broadcasting Equipment 6
Computer software 4
Computers and Electronic Equipment 4
Electrical and Plumbing Installations and Sanitary Fittings 15
Equipment mainly designed or used for the production of water or electricity 6
Equipment used for construction of buildings and excavation 6
Furniture, Fixtures, Fittings and Soft Furnishings 10
Lifts and Escalators 10
Medical Equipment 6
Motor Vehicles 5
Other machinery 5
Other plant 10
Pipeline Infrastructure 20
Ships and vessels 10

 

Deductions

Article 14 of the Income Tax Act prescribes the tax deductions allowable on chargeable income, as follows:

  • Sums payable by such person by way of interest upon any money borrowed by him where the interest was payable on capital employed in acquiring the income;
  • Rent paid by a tenant of land or buildings occupied by him for the purpose of acquiring the income;
  • Any sum expended for repairs of premises, plant or machinery employed in acquiring the income, or for the renewal, repair or alteration of any implement, utensil or article so employed;
  • Bad debts incurred in any trade, business, profession or vocation;
  • Any sum contributed by an employer to a pension;
  • A deduction in respect of the wear and tear of any plant and machinery, and any premises being an industrial building or structure arising out of the use or employment of such property in the production of the income;
  • Any expenditure on scientific research incurred by a person engaged in any trade, business, profession or vocation;
  • Any expenditure on patents or patent rights incurred by a person engaged in a trade, business or vocation;
  • In respect of plant and machinery first used and employed in the year immediately preceding the year of assessment, an initial deduction of 20% of the capital expenditure thereon;
  • In respect of premises being an industrial building or structure first used and employed in the year immediately preceeding the year of assessment, an initial deduction of 10% of the capital expenditure;
  • Any sums or expenses paid or incurred by or on behalf of a candidate for election as member of the House of Representatives on account of or in respect of the conduct or management of such election;
  • Any expenditure incurred by a person engaged in a trade, business, profession or vocation for the purpose of promoting that trade, business, profession, or vocation including any expenditure on market research, samples, fairs and exhibitions;
  • Any expenditure of a capital nature on intellectual property rights incurred by a person enaged in a trade, business, profession or vocation whcih was incurred in the use and benefit of the trade, business, profession or vocation;
  • Any sum paid by an employer to a childcare centre in respect of childcare services for children of his employees up to a maximum of  €935 per child;
  • Any alimony payments paid to an estranged spouse;
  • School fees, up to €1,400 per child attending secondary school or  €1,000 per child attending primary school or kindergarten;
  • Child care fees up to €1,000;
  • Homes for the elderly fees up  to €2,000;
  • Sports fees up to €100

In addition to the aforesaid, Article 74 of the Value Added Tax Act, Chapter 406 of the Laws of Malta allows for tax deduction on:

  • Interest paid under the VAT Act by the Commissioner of VAT to any person is treated as income of that person;
  • Interest paid or payable under the VAT Act by any person to the Commissioner of VAT is treated as an expense incurred in the production of the income of that person.

 

Non – Allowable Deductions

Article 26 of the Income Tax Act enlists the deductions which may not be deducted from chargeable income, such as:

  • Domestic or private expenses other than alimony payments and school fees;
  • Any outgoings and expenses to the extent of which they are not wholly and exclusively incurred in the production of the income, and not being necessarily incurred in the performance of the relative employment or office;
  • Any loss, diminution, exhaustion or withdrawal of capital, any sum employed or intended to be employed as capital;
  • The cost of any improvements;
  • Any loss or expense recoverable under any insurance or contract of indemnity;
  • Rent of any premises or part of premises not paid for the purpose of producing the income;
  • Any ex gratia payments

For bespoke Income Tax, Capital Allowances and Deductions advices, please click here to contact our tax advisors or send us an email on enquiries@fbsmalta.com 

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