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Maltese legislation includes provisions and rules on tax payments during the year in which the taxable income is generated. Accordingly, companies and self-employed workers must make provisional tax payments on 30 April, 31 August and 21 December.

Taxes not settled in accordance with this system must be paid on the date on which income tax returns are made. Late payment of taxes shall be subject to a 0.75% fine per month in arrears.

The amount of the provisional tax payment owed for each year corresponds to the amount calculated in the self-assessment, which must be submitted before the end of the calendar year when the first instalment of the provisional tax payment is due.

20% of the tax amount payable must be paid during the first instalment of the provisional tax payment on account, 30% during the second instalment and the remaining 50% shall be paid during the third and final instalment.

The amount of provisional tax paid shall be credited against the total tax payable by the taxpayer.

The Commissioner for Inland Revenue is entitled to increase the amount of the payment on account. However, the taxpayer is entitled to reduce the amount on account to be paid, and must fill in and submit the respective form. Nonetheless, the taxpayer must pay additional tax if it has been established that such a reduction is not justified.

 

Exceptions

As a rule, any tax payable must be paid within the scope of the provisional tax payment system or if additional payment is due, on the date of the income tax return. There are, however, some exceptions to this rule:

  • Foreign income account profits: in this case the tax must be paid within the 18 months following the end of accounting period in which the profits were generated or when such profits are distributed (whichever occurs first);
  • Profits from companies benefitting from stamp duty exemptions under Article 47 (3) (e) of the Duty on Documents and Transfers Act: in this case, tax is paid on the date of the income tax return if profits are distributed before this date, or failing this on the first of two dates:
     
    • Within the 18 months following the end of the accounting period in which the profits were generated;
    • 14 days after the end of the month in which such profits are distributed.

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