Income Tax Management Act, article 48
Malta tax refund: what does the shareholder refund pay back?
A Maltese company pays tax at 35%. On €100,000 of chargeable profit that is €35,000, leaving €65,000 to distribute. A shareholder entitled to the 6/7ths refund claims €30,000 back after the dividend is paid, so €95,000 of the original €100,000 reaches the shareholder and €5,000 of Malta tax remains, an effective 5%. Change the fraction to see the other outcomes.
35%
tax on the chargeable income of every company, article 56(6) Income Tax Act
6/7ths
refund of Advance Company Income Tax on ordinary distributed profits
4 years
deadline for a refund claim, from the date the tax becomes eligible for refund
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Malta shareholder refunds on €100,000 of chargeable profit
Last updated
Each statutory refund fraction applied to the same company: €100,000 of chargeable profit, tax at 35%, the whole after-tax profit distributed, and the refund claimed by the shareholder. Every row is produced by the calculator's own formulas.
Company tax at 35% under article 56(6) of the Income Tax Act (Cap. 123). Refund fractions from article 48(4) and 48(4A) of the Income Tax Management Act (Cap. 372) as consolidated on 10 March 2026. Full distribution of after-tax profit assumed, with no double taxation relief claimed by the company, so the tax actually paid equals 35% of the profit and the statutory cap on the refund does not bite. Where a company has claimed double taxation relief, the tax actually paid is lower and the cap in the second proviso to article 48(4)(c) reduces the refund below the figures here. Effective rate is the Malta tax left after the refund, as a percentage of the original chargeable profit; tax payable by the shareholder in their own country is not included.
| Refund claimed | Company tax at 35% | Refund to shareholder | Malta tax left | Effective rate |
|---|---|---|---|---|
| 6/7ths, ordinary distributed profits | €35,000 | €30,000 | €5,000 | 5% |
| 5/7ths, passive interest and royalties | €35,000 | €25,000 | €10,000 | 10% |
| 2/3rds, foreign income account with DTR claimed | €35,000 | €23,333 | €11,667 | 11.67% |
| Full refund, participating holding | €35,000 | €35,000 | €0 | 0% |
| No refund, profits retained in the company | €35,000 | €0 | €35,000 | 35% |
- Malta charges every company 35% on chargeable income and grants relief only when profits are distributed: on €100,000 of profit the company pays €35,000 whatever refund the shareholder later claims.
- The 6/7ths refund returns €30,000 of a €35,000 Malta tax charge to the shareholder, leaving €5,000 and an effective Malta rate of 5% on distributed trading profits.
- Passive interest and royalties carry a 5/7ths refund rather than 6/7ths, leaving €10,000 of Malta tax on €100,000 of profit, an effective 10%.
- A refund claim must be made within four years of the date the tax becomes eligible for refund, and the Commissioner must pay within fourteen days of it becoming due, extendable by twelve months for due diligence verification.
Cite this page
“Malta shareholder refunds on €100,000 of chargeable profit”, Malta Tax Refund Calculator, https://maltataxrefundcalculator.com/ (updated 2026-08-15). Company tax at 35% under article 56(6) of the Income Tax Act (Cap. 123). Refund fractions from article 48(4) and 48(4A) of the Income Tax Management Act (Cap. 372) as consolidated on 10 March 2026. Full distribution of after-tax profit assumed, with no double taxation relief claimed by the company, so the tax actually paid equals 35% of the profit and the statutory cap on the refund does not bite. Where a company has claimed double taxation relief, the tax actually paid is lower and the cap in the second proviso to article 48(4)(c) reduces the refund below the figures here. Effective rate is the Malta tax left after the refund, as a percentage of the original chargeable profit; tax payable by the shareholder in their own country is not included.
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Related guides
Each one cites where its numbers come from.
- The Malta 6/7ths tax refund: how the fraction is actually applied
The 6/7ths refund is of Advance Company Income Tax on a dividend from the Maltese taxed or foreign income account, claimed by a registered shareholder, not the company.
- Malta's five tax accounts, and which ones carry a refund
Final tax account, immovable property account, foreign income account, Maltese taxed account and untaxed account: how profits are allocated and which support a claim.
- Malta tax refund eligibility: who can claim, and by when
Registration, the dividend certificate, the four-year claim deadline, the fourteen-day payment rule and the penalty for claiming a Maltese refund you are not due.
Behind the numbers
- The company rate is 35 cents on every euro of chargeable income for every company and body corporate, article 56(6) of the Income Tax Act (Cap. 123). There is no reduced Maltese company rate; the relief is entirely at shareholder level.
- The refund fractions are those in article 48(4) and 48(4A) of the Income Tax Management Act (Cap. 372): six-sevenths of the Advance Company Income Tax on a dividend from the Maltese taxed account or the foreign income account; five-sevenths where the profits consist of passive interest or royalties, or of dividends from a participating holding that fails the article 12(1)(u) conditions; two-thirds of the Malta tax where the dividend comes from the foreign income account and the company claimed relief of double taxation; a full refund where foreign income account profits derive from a participating holding or its disposal.
- The calculator applies the fraction to the tax pertaining to the profits actually distributed. Retained profits generate no refund until they are distributed, which is why the distribution percentage changes the answer.
- A statutory cap applies in both sub-articles: the refund shall in no case exceed the amount of tax actually paid by the company to the Commissioner on the distributed profits. Where double taxation relief has reduced the tax paid, the two-thirds figure this tool produces can therefore overstate the entitlement, so treat the 2/3rds line as an upper bound and have it computed on the real numbers.
- The refund is a shareholder entitlement, claimable only by a person registered for the purpose in the prescribed manner, and payable by the Commissioner not later than the fourteenth day following the day it becomes due, extendable by twelve months where further due diligence verification is required (article 48(8)).
- Not modelled: the company's own tax computation, allocation of profits between the five tax accounts, tax accounted for under the investment income provisions, the tax the shareholder pays in their own country of residence, and the EU global minimum tax for large groups. This tool computes a statutory fraction; it does not tell you whether you qualify for it.
Malta Tax Refund Calculator is an independent information site operated by Ellul Solutions Ltd. It is not affiliated with the Malta Tax and Customs Administration, the MFSA or any Maltese authority, and nothing here is tax, legal or investment advice. Figures are computed from the Income Tax Act and the Income Tax Management Act as published on legislation.mt at the updated date above; entitlement to any refund depends on facts a calculator cannot test, and on the tax rules of the country where the shareholder is resident.
Frequently asked
How does the Malta 6/7ths tax refund work?
The company pays 35% on its chargeable income. When it distributes those profits from the Maltese taxed account or the foreign income account, a registered shareholder can claim back six-sevenths of the Advance Company Income Tax on the dividend under article 48(4A) of the Income Tax Management Act. On €100,000 of profit that is a €30,000 refund against a €35,000 charge, leaving €5,000 and an effective Malta rate of 5%.
When is the Malta refund 5/7ths rather than 6/7ths?
Where the dividend is paid out of profits consisting of passive interest or royalties, or of dividends from a participating holding that does not satisfy the conditions in the proviso to article 12(1)(u) of the Income Tax Act. The proviso to article 48(4A)(a) sets the fraction at five-sevenths in those cases, which leaves an effective Malta rate of about 10%.
What is the 2/3rds refund for?
Article 48(4) allows a refund of two-thirds of the Malta tax paid on profits allocated to the foreign income account and distributed as a dividend, in cases where relief of double taxation has been claimed. The refund is capped at the tax actually paid to the Commissioner on those profits, so the arithmetic depends on how much relief was taken and needs to be computed on real figures.
How long does a Malta tax refund take to be paid?
Article 48(8) of the Income Tax Management Act makes the refund a debt payable not later than the fourteenth day following the day it becomes due, but expressly allows that period to be extended by a further twelve months where the Commissioner needs to carry out further due diligence verification. Plan cash flow for the longer case.
Is there a deadline for claiming?
Yes. Article 48(5) requires a claim under article 48(4) or 48(4A) to be made not later than four years from the date from which the amount of tax is eligible for refund. A late claim is simply out of time, however clearly the entitlement existed.
Does the refund apply to profits from Maltese property or rental income?
Not through these sub-articles. Profits taxed under the final withholding charges, including the property transfer tax in article 5A and the 15% option on rental income in article 31D, are allocated to the final tax account, and profits from Maltese immovable property to the immovable property account. Neither account appears in article 48(4) or 48(4A).
Sources
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Every statutory fraction, applied to your own profit figure.
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