18.02.2026
In response to global tax standards and the need for greater administrative efficiency, the Maltese legislator has published Legal Notice 188 of 2025, introducing the “Final Income Tax Without Imputation Regulations, 2025”.
Effective from the Year of Assessment 2025, which covers the 2024 basis year, this elective regime offers companies a sophisticated alternative to the traditional full imputation system, in the form of a simplified, flat-rate approach that aligns more closely with contemporary international tax trends.
Understanding this new regime
The new regulations allow qualifying entities, which include companies and other entities that are taxed in same manner as companies, to elect to be taxed at a final rate of 15% on their chargeable income. Under this regime, the 15% tax is deemed final, meaning it cannot be credited or offset against the tax liability of any other person. Consequently, dividends paid out of profits taxed at this rate do not entitle shareholders to any further tax refunds, and such profits must be specifically allocated to the company’s Final Tax Account.
This regime is entirely optional, however especially for large and multinational corporate groups, it carries a commitment to fiscal stability.
Entities electing to avail themselves of this regime must notify the Commissioner of Tax and Customs via the prescribed form. Such election remains binding for five consecutive years. Should a company decide to revert to the standard system after this period, this is possible however it will then not be possible to revert back to the 15% final tax regime before the lapse of another five years.
Companies must also be aware that to preserve fiscal integrity, the Legal Notice dictates a "higher-of" safeguard, ensuring that the 15% final tax cannot be lower than the net effective tax that would have otherwise been due by the Company under the standard system after accounting for potential refunds.
Strategic Benefits and International Alignment
The strategic value of the 15% elective rate under this regime is particularly evident when considering the OECD’s Pillar Two Global Minimum Tax requirements. For multinational groups within the scope of these rules, this regime allows for a top-up to the 15% floor directly within Malta, ensuring that tax revenue remains in the local jurisdiction, without falling in breach of the Income Inclusion Rules. Ultimately, the Final Income Tax Without Imputation Regulations do not replace the Maltese traditional system of corporate taxation but add another vital tool to the Maltese tax toolkit.
As Malta’s tax landscape becomes more sophisticated, choosing the right elective regime is critical to maintaining a competitive edge. Our tax specialists are available to conduct a comprehensive assessment of your current structure and guide you through the transition to this new framework.
To explore how these regulations impact your specific operations, feel free to reach out to us for an initial consultation at info@dingli.com.mt.