1. 15% final tax on their chargeable income assessed in line with the MT Income Tax Act.
2. FITWI applies for a minimum period of five consecutive years of assessment from the date of election.
3. Once expired, an Entity will not be able to elect for FITWI for a minimum of five years.
4. The net effective Maltese income tax liability will always be the higher of the of the 15% FITWI or the net effective income tax under the MT Income Tax Act.
Who is FITWI applicable to?
Entities which have sufficient substance and the required functions in terms of assets and risks relevant to any activity carried on in Malta.
Entities include:
- companies,
- bodies of persons that elect to be treated as a company or is deemed to be a company, and
- trusts that elect to be treated and taxed as a company.
From when are these applicable?
Income accruing to or derived by an entity in fiscal year 2024 (year of assessment 2025) and subsequent years.
This is optional - Entities have the possibility to opt for a final tax rate of 15% on their chargeable income, as an alternative to the application of the full imputation system under the MT Income Tax Act.
What is FITWI?
Entities can opt to apply a 15% final tax on their chargeable income assessed in line with the MT Income Tax Act. This is also called the Final Income Tax Without Imputation, ‘FITWI’. This shall be final and shall not be available as a credit or set off against the tax liability of any individual or entity or as a refund to any person.
How to elect for FITWI?
An Entity must submit a notice to the Commissioner for Tax and Customs (the ‘CfTC’) via a prescribed form by such date as the CfTC may determine.
For how long does FITWI apply?
FITWI applies for a minimum period of five consecutive years of assessment from the date of election.
After the expiration of the five-year period, an Entity may notify the CfTC to revert to be taxed under the standard rules of the MT Income Tax Act. Once this is effective, an Entity will not be able to elect for FITWI for a minimum of five years.
What are the exclusions provided by the Regulations?
- Dividends received fromprofits that are allocated to the Final Tax Account of another Maltese company.
- Income that has beensubject to a final rate of tax in terms of any other provision of the MT IncomeTax Act and which is allocated to the Final Tax Account.
What are the exceptions provided by the Regulations?
The FITWI can never be lower than the net effective Maltese income tax resulting from applying the standard rules of the MT Income Tax Act.
This means that the net effective Maltese income tax liability will always be the higher of the final income tax under FITWI (at 15%) or the net effective income tax under the MT Income Tax Act.
How Can We Help?
At Chetcuti Cauchi Advocates, our Tax Practice combines technical expertise with a practical, business-oriented approach to help clients navigate Malta’s evolving tax landscape. We advise on corporate and international tax planning, ensuring compliance while optimising tax efficiency for businesses, high-net-worth individuals, and family offices.
Our services include:
- FITWI Advisory & Implementation: Assessing eligibility, substance requirements, and preparing election notices to the Commissioner for Tax and Customs.
- Corporate Structuring & Cross-Border Tax Planning: Designing tax-efficient structures for multinational groups, holding companies, and investment vehicles.
- Transfer Pricing & Substance Compliance: Ensuring alignment with OECD standards and Maltese regulations.
- Tax Risk Management & Dispute Resolution: Representing clients in audits, investigations, and litigation before Maltese tax authorities.
- Personal & Family Tax Planning: Advising on succession, wealth preservation, and relocation strategies.
With decades of experience and a multidisciplinary team, we deliver tailored solutions that balance legal compliance with strategic tax optimisation. For personalised assistance, contact our Tax Team.
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