What is FITWI (15% Final Income Tax Election)?
From year of assessment 2025, a Maltese company may elect the Final Income Tax Without Imputation, a flat 15% final tax on chargeable income instead of the 35% tax and shareholder refunds.
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Current Rate (From year of assessment 2025)
15% final tax, with a 5-consecutive-year lock-in
Example
A company with €100,000 of chargeable income that has made the election pays €15,000. There is no credit, no refund and no set-off against other tax.
How FITWI (15% Final Income Tax Election) works in Malta
The election is made under L.N. 188 of 2025. The tax is final and cannot be credited, refunded or offset. The election locks in for 5 consecutive years. An anti-arbitrage floor stops it undercutting the 35%-minus-refunds outcome.
It is also the voluntary route for groups in scope of Pillar Two to reach a 15% effective rate in Malta, since Malta has deferred the income inclusion rule and UTPR.
Finn models the election where it has been made and flags it as a planning conversation. Eligibility and the decision itself are for a licensed practitioner.
Related terms
Maltese corporate income tax is 35% on the worldwide income and capital gains of Maltese companies. Under the full imputation system, shareholders can reclaim part of it on distribution, so the effective rate is often far lower.
Under full imputation, shareholders receiving a dividend can claim a refund of part of the Malta tax paid by the company. The refund is 6/7ths on trading profits, 5/7ths on passive interest or royalties, 2/3rds on foreign-income-account profits and 100% on participating holding profits.
A Maltese parent may form a fiscal unit with subsidiaries in which it holds at least 95%. The unit files one consolidated return and achieves the shareholder-refund benefit at source.
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