Self Employed in Malta

1. Registration:
- Self-employed individuals must register with the MBR as sole traders or under their business name.

2. Taxation:
- Income Tax: Self-employed individuals are taxed on their personal income. The tax rates are progressive, ranging from 0% to 35%.
- VAT: If your annual turnover exceeds a certain threshold, you must register for VAT and charge VAT on your services or goods.

3. Social Security Contributions:
- Self-employed persons need to pay social security contributions based on their earnings. These contributions provide access to various social benefits.

4. Record-Keeping:
- It's essential to maintain accurate records of all transactions, income, and expenses. This is crucial for both tax purposes and financial management.

5. Business Support:
- There are several resources available for self-employed individuals, including business advice, networking events, and training programs offered by institutions like Malta Enterprise or the Chamber of Commerce.

In Malta, as a self-employed individual, you’re eligible for various tax deductions that can reduce your taxable income.

1. Business Expenses

You can deduct expenses that are necessary for running your business. These include:

- Office Rent and Utilities: Costs related to renting office space, as well as utilities like electricity and water. - Office Supplies: Expenses for stationery, printer ink, and other office necessities.
- Equipment and Depreciation: Costs of purchasing and maintaining business equipment, such as computers and machinery. You can also claim depreciation on these assets over time.
- Travel Expenses: Costs related to business travel, including fuel, public transport, accommodation, and meals. Ensure these are strictly for business purposes.
- Telephone and Internet Bills: Expenses for communication services used for business.

2. Professional Fees

- Accountancy Services: Fees paid for accounting, bookkeeping, and tax advisory services.
- Legal Fees: Costs related to legal advice and representation for business matters.

3. Employee Costs

If you have employees, you can deduct:

- Salaries and Wages: Payments made to employees.
- Employer's Social Security Contributions: Your contributions to the social security fund for employees.
- Training and Development: Costs related to professional development and training for employees.

4. Vehicle Expenses

If you use a vehicle for business purposes, you can deduct:

- Business-Related Travel: Costs associated with business travel, including fuel, maintenance, and insurance.
- Depreciation: Depreciation on vehicles used for business.

5. Advertising and Marketing

- Advertising Costs: Expenses for promoting your business, including online ads, print media, and promotional materials.
- Marketing Materials: Costs related to creating business cards, brochures, and other marketing collateral.

6. Insurance

- Business Insurance: Premiums for business-related insurance policies, such as public liability or professional indemnity insurance.

7. Bank Fees and Interest

- Bank Charges: Fees for maintaining business bank accounts.
- Interest on Business Loans: Interest paid on loans used for business purposes.

8. Home Office Expenses

If you work from home, you may claim a proportion of your home expenses, such as:

- Rent or Mortgage Interest: A percentage of your home rent or mortgage interest based on the space used for business.
- Utilities: A proportion of utility bills related to your home office.

9. Tax Credits and Allowances

- Investment Tax Credits: If you invest in certain qualifying assets or projects, you might be eligible for tax credits.
- Personal Allowances: Standard allowances that reduce your taxable income.

10. Health and Safety Costs

- Compliance Costs: Expenses incurred to meet health and safety regulations in your business.

Record-Keeping

To benefit from these deductions, it's essential to keep detailed records and receipts of all business-related expenses. This documentation will be necessary for supporting your claims during tax filing and any potential audits.

Tax laws can be complex and subject to change. Consulting with our tax advisor and accountant can help ensure you’re maximizing your deductions and complying with all legal requirements.

Don’t hesitate any longer. Apply to become a client today to work with our experts on legal strategies to overcome barriers.