Malta Tax Accounts
The income of a Malta company is divided into 5 different tax accounts. These are the Final Tax Account (FTA), the Immovable Property Account (IPA), the Foreign Income Account (FIA), the Maltese Taxed Account (MTA) and the Untaxed account.
The Final Taxed Account
The FTA includes distributable profits that have suffered tax, including income taxed under the investment income provisions, profits from sale of immovable property situated in Malta taxed at the final 12% rate, profits where tax has been relieved under various tax incentive legislation, etc.
The Immovable Property Account
The IPA includes distributable profits that have suffered tax, including profits derived – directly or indirectly – from immovable property situated in Malta (that has not been allocated to the FTA), profits from rents and premiums, profits derived from providing accommodation, profits deemed to constitute an economic rent, etc.
The Foreign Income Account
The FIA includes distributable profits that have suffered tax, including profits resulting from royalties and similar income arising outside Malta and from dividends, capital gains, interest, rents and any other income derived from investment situated outside Malta including income from an overseas branch, agency or permanent establishment of a Maltese company.
The Malta Taxed Account
The MTA includes distributable profits that have suffered tax and has not been allocated to the FTA, IPA or FIA.
The Untaxed Account is made up of the difference between the company’s accounting profits and the amounts allocated to the FTA, IPA, FIA and MTA.
The refund provisions are applicable to tax charged on income allocated to the FIA and MTA, whilst the Flat Rate Foreign Tax Credit (FRFTC) only applies to income allocated to the FIA.