Self-Employed Tax Malta Guide
If you work for yourself in Malta, as a freelancer, consultant or sole trader, your tax setup is simpler than a company, but it has more moving parts. This guide explains how it actually works.
How you're taxed
Self-employed income is taxed at the standard personal income tax rates, progressive bands from 0% up to 35% depending on total income, residency status and tax-status (single, married, parent).
You report self-employment profits on your annual personal tax return, after deducting allowable business expenses.
Social security (Class 2)
Self-employed individuals pay Class 2 social security contributions on net earnings, payable in three instalments per year (April, August and December).
Contributions are calculated on your previous year's profit and capped at the annual maximum. They count towards your Maltese pension and benefits.
Provisional tax
Self-employed people pay tax in three provisional instalments per year, usually 20%, 30% and 50% of the estimated total, with the balance settled when you file your annual return.
Underpaying provisional tax can trigger interest, so it's worth getting the estimate right rather than defaulting to last year's figure.
VAT for the self-employed
If your taxable turnover from services exceeds EUR 30,000 (or EUR 35,000 for goods), you must register under Article 10 and charge VAT. Below that, Article 11 keeps things simple, no VAT charged, no VAT reclaimed.
Voluntary Article 10 registration often pays off if your clients are VAT-registered or you have significant input VAT on equipment, software or subcontractors.
What you can deduct
Costs that are wholly and exclusively for the business are deductible, software, professional fees, business travel, equipment, training, a portion of home-office costs where genuinely used, and subcontractor invoices.
Capital purchases (laptops, equipment) are usually claimed via capital allowances over their useful life rather than fully in the year of purchase.
Personal costs aren't deductible. Mixed-use costs need a sensible apportionment, with documentation to back it up.
When to consider a company
If you're earning over a certain level, planning to reinvest profits, hiring people or working with international clients, a Maltese limited company often becomes more efficient, both for tax (via the refund system) and for liability.
There's no fixed threshold, it depends on your income, your spending and your plans.
Records and deadlines
Keep invoices, receipts and bank records for at least 9 years. Annual personal tax returns are typically due by 30 June for the previous year.
Late filing and late payment trigger interest and penalties, and they're easy to avoid with a simple monthly process.
FAQ
How much tax do self-employed people pay in Malta?+
It depends on income and tax status. Personal income tax is progressive, from 0% on the lowest band up to 35%. Class 2 social security applies on top.
Do I need to register for VAT?+
If your taxable turnover exceeds EUR 30,000 for services or EUR 35,000 for goods, yes, Article 10. Below that, Article 11 is available and often simpler.
When are tax payments due?+
Provisional tax is paid in three instalments through the year, with the balance due when you file the annual return (typically 30 June).
Should I incorporate as a company?+
Often worth considering once income, growth or liability matter. A Malta company can be materially more tax-efficient via the refund system, but adds compliance.
What expenses can I deduct?+
Anything wholly and exclusively for the business, software, fees, travel, training, equipment (via capital allowances), and a fair portion of mixed-use costs.
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