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Every company registered in Malta needs to file the corporate income tax return on an annual basis. The income tax return would need to be based on the audited financial statements of the company. In fact the usual process is for the audit of the financial statements to be carried out first, subsequent to which the income tax return is completed and submitted.
Corporate Tax return
Our taxation team at CSB Group may support corporate entities with the preparation and submission of annual tax returns. This would ensure that the tax returns are prepared in a proper and timely manner and the correct tax charge is calculated. The deadline to submit corporate tax returns would depend on the accounting year/period end of the companies. Furthermore, we may also assist corporate entities with the preparation and submission of Tax refunds applications. At CSB Group, we may also assist with the completion of personal tax returns. The deadline for these is 30th June for each calendar year. The income tax return of the company would include several pages to be completed to arrive at the chargeable income of the company and the tax liability for the year. Companies are charged at a flat rate of 35% on the net chargeable income for each year of assessment upon their income for the basis year. The year of assessment is always a year ahead of the basis year which would be the accounting year end.
Submission of a Company Income Tax Return
The Tax Return and Self-Assessment for companies is to be submitted within nine (9) months after the end of the company’s financial year. Companies with financial year ending between 1st January and the 30th June have a deadline for submission of the tax return by the 31st March of the following year. Other companies with year ending 31st July onwards have a deadline of nine (9) months following end of year.
There are extensions for the electronic filing of the tax returns – these are applicable for the filing of the tax returns themselves and not for the tax payments themselves. Penalties are incurred on late filing of returns. The tax return submitted by the company is a self-assessment, and the Commissioner for Revenue will not raise an assessment unless the Commissioner is not in agreement with the self-assessment.
Provisional Tax Payments
In relation to Tax payments, companies registered in Malta will normally pay tax through provisional tax payments made throughout the year. The provisional tax (PT) is an estimated tax based on the tax due of that year which precedes the year in which you have to pay the PT by two years.
Any tax liability that is still due at the tax return date after deducting all tax credits must be settled immediately with the submission of the return. Interest at 0.33% per month is charged on any unpaid tax on or after 1st January 2020.
In certain instances, especially for companies with mostly international operations, PT may not be required to be paid, and the tax payment is normally paid on the earlier of the date profits are distributed or 18 months after the end of the relevant accounting period.
The latter will be applicable if the company is able to avail itself of the DDT10 exemption and has filed the relevant renewal as stated in the following paragraph. Apart from granting a stamp duty exemption, the DDT10 exemption extends the tax payment deadline from 9 to 18 months after the financial year-end.
Renewals for the DDT10 Exemption
DDT 10 determinations granted by the Commissioner for Revenue to companies before the 1st of December 2016 were valid only until 30th of November 2019. Other determinations issued on or after the 1st of December 2016, are valid for a period of three years from the date of determination.
Therefore DDT 10 determinations had to be renewed for further periods of three years. To continue taking advantage from the DDT10 exemption, companies need to apply for a new determination and inform the CFR whether there have been any significant changes to the previous determination. If this is not done, transfers of marketable securities can potentially start attracting duty and the extension for tax payment will no longer be applicable.
Companies Tax Returns can only be submitted by registered Tax Practitioner. CSB Group is able to act as your tax representative/tax practitioner to assist your company in the fulfilment of all its tax compliance and administrative obligations.
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