Capital Gains Tax in Malta: Complete 2026 Guide to Rates, Rules and Exemptions

Last reviewed: September 2026. Rates, thresholds and exemption conditions referenced below (e.g., the participation exemption tests, relief scheme caps) are periodically updated by Maltese subsidiary legislation — see "Legal Framework" for how we keep this page current, and confirm time-sensitive figures with the CFR or a licensed advisor before relying on them.

Quick answer: Malta taxes capital gains as ordinary income for individuals, at progressive rates from 0% to 35%, and at a flat 35% for companies, under Article 5 of the Income Tax Act (Chapter 123). Real estate is usually carved out of this regime and taxed instead under a separate final withholding tax, generally 8% of the transfer value (10% for property acquired before 2004). A participation exemption can reduce qualifying shareholding gains to 0%. Companies can also elect a flat 15% final tax on chargeable income under the FITWI regime introduced in 2025.

Table of Contents

• Introduction
• How Capital Gains Are Calculated in Malta
• Capital Gains Tax Rates in Malta by Asset Type
• The Participation Exemption Explained
• Capital Gains Tax for Non-Residents in Malta
• Exemptions and Reliefs
• Legal Framework
• Common Mistakes to Avoid
• FAQ

Introduction

If you are relocating to Malta, running a company through a Maltese structure, or selling an asset while resident on the island, "how much capital gains tax will I pay in Malta?" rarely has a one-line answer. Malta does not have a single, flat "capital gains tax rate." It runs two parallel systems: an ordinary income-tax-based regime for most chargeable assets (shares, goodwill, intellectual property, business assets), and a separate final withholding tax that applies to most transfers of immovable property. Mixing the two up is the most common — and most costly — mistake made by expats, digital nomads and property investors in Malta.

This guide, updated for 2026, breaks down how each regime works, what rate applies to each type of asset, how the participation exemption can bring qualifying shareholding gains to zero, what the 2025 FITWI election means for companies, and what non-residents and non-domiciled residents — a large share of Heavnn's audience — need to know before signing a deed of sale. For the residency side, see our guide to Malta tax residency rules.

Who This Guide Applies To

• Individuals resident, non-resident, or resident-but-not-domiciled in Malta disposing of Maltese immovable property, shares, or other chargeable assets
• Maltese companies, including holding companies, disposing of chargeable assets or evaluating the participation exemption on a shareholding
• Digital nomads and expats on residence programmes (e.g., the Global Residence Programme) assessing how the remittance basis interacts with foreign-source gains
• Non-resident sellers of Maltese real estate, who are subject to the same property transfer withholding tax as residents

This guide does not cover:

• Income tax on trading profits, dividends, interest, or rental income as such — only the capital gains and property-transfer-tax treatment of a disposal
• VAT on property or business-asset transactions, which follows separate rules
• Malta's tonnage tax, aviation, and other sector-specific regimes, which can override the general rules for qualifying activities
• Estate planning and inheritance tax structuring in detail

How Capital Gains Are Calculated in Malta

For assets falling within the general capital gains regime (everything other than most immovable property transfers, which follow the separate withholding tax below), the taxable gain is:

Capital Gain = Transfer Value − Cost of Acquisition − Allowable Expenses

• Transfer value: the actual consideration received, or the market value at the date of transfer if higher (to prevent underdeclaration between connected parties).
• Cost of acquisition: the original purchase price, plus the cost of any improvements that increased the asset's value.
• Allowable expenses: costs directly incurred in acquiring or disposing of the asset — legal fees, brokerage, notarial fees, and (for property) qualifying improvement costs.

The gain is added to the individual's other chargeable income for the year and taxed at the applicable progressive rate, or at the flat 35% company rate for a corporate seller. Malta does not index the acquisition cost for inflation, so the full nominal gain is taxed unless an exemption or relief applies.

Worked example 1 — unlisted shares. An individual buys a 20% stake in a Maltese trading company for €150,000 and sells it for €420,000, incurring €8,000 in legal and advisory fees. The chargeable gain is €420,000 − €150,000 − €8,000 = €262,000, added to the seller's income and taxed at their marginal rate — up to 35% — unless the participation exemption applies.

Worked example 2 — business goodwill. A sole trader sells the goodwill of their consultancy for €90,000, with no identifiable acquisition cost and €4,000 of legal fees on the sale. The chargeable gain is €90,000 − €4,000 = €86,000, taxed at the individual's progressive rate.

Most residential and commercial property sales are instead taxed under Malta's final withholding tax on property transfers (a fixed percentage of the full transfer value, not the net gain), so the formula above typically does not apply to a straightforward property sale — the single biggest source of confusion in Malta capital gains questions, explained fully below.

Capital Gains Tax Rates in Malta by Asset Type

Companies pay a flat 35% rate on chargeable capital gains — Malta has no separate, lower corporate capital gains rate. Since September 2025, however, Maltese companies can elect the FITWI regime (Final Income Tax Without Imputation, introduced by Legal Notice 188 of 2025 and applying from financial years ending 31 December 2024): a flat 15% final tax on chargeable income, replacing the imputation/refund system entirely — no shareholder refunds are available under it. The election is binding for at least five consecutive years and includes an anti-avoidance floor so it cannot produce a lower liability than the refund system would have. Whether FITWI improves the after-tax outcome on a specific company's capital gains (versus 35% with 6/7ths refunds, or 0% under the participation exemption) is a modeling exercise — run both routes with a Malta-licensed advisor before relying on either.

Also distinguish stamp duty (under the Duty on Documents and Transfers Act) from capital gains tax: Malta separately charges duty of around 5% on transfers of immovable property and around 2% on transfers of shares and securities. This is payable in addition to, not instead of, the capital gains or property transfer tax above.

The Participation Exemption Explained

Malta's participation exemption is one of the main reasons international entrepreneurs and holding structures choose Malta.

Under a participating holding, capital gains (and dividends) derived by a Maltese company from that holding can be fully exempt from tax in Malta — an effective 0% rate — instead of the standard 35% corporate rate.

A holding is generally treated as a "participating holding" where the Maltese company:

• holds at least 5% of the equity shares of the investee company, carrying at least 5% of two of: voting rights, distributable profits, and distributable assets on winding up; or
• holds an equity investment worth at least approximately €1.164 million, held for an uninterrupted period of at least 183 days; or
• is entitled to sit, or appoint a person to sit, on the investee's board; or
• holds the shares for the furtherance of its own business rather than as trading stock; or
• has an option, or a right of first refusal, to acquire the remaining shares.

Malta also applies anti-abuse conditions: the investee must satisfy at least one of — resident or incorporated in the EU; subject to foreign tax of at least 15%; or deriving no more than 50% of its income from passive interest or royalties. These conditions target genuine trading or strategic holdings rather than passive, low-tax portfolio investments.

Because thresholds and tests can change under subsidiary legislation and eligibility is fact-specific, confirm current figures with the CFR or a Malta-licensed advisor before structuring around them. Holdings that fall short of full participation exemption can still often reduce the effective rate through Malta's shareholder tax refund system (commonly a 6/7ths refund on distributed profits), which operates differently from the exemption itself — and, since 2025, through the FITWI election described above.

Capital Gains Tax for Non-Residents in Malta

Non-residents are taxed in Malta only on Malta-source capital gains — broadly, gains on Maltese immovable property, on shares deriving their value (directly or indirectly) mainly from Maltese immovable property, and on business assets situated in Malta. Gains arising outside Malta are outside the scope of Maltese tax for a non-resident, regardless of where the proceeds are banked.

This matters even for a non-resident selling Maltese real estate: the same final withholding property transfer tax (8%/10%) applies to non-resident sellers as to residents, typically withheld by the notary at the deed of sale — it is not something a seller can skip by living abroad.

For individuals resident but not domiciled in Malta (common among digital nomads and expats on programmes such as the Global Residence Programme), Malta's remittance-basis rules generally mean foreign-source capital gains are not taxed even if remitted to Malta — a materially different treatment from foreign-source income, which can become taxable on remittance. This is one of the most valuable, and most misunderstood, features of Malta's system for internationally mobile individuals; confirm it against your specific residence status with the CFR or a licensed advisor.

Exemptions and Reliefs

Several exemptions and reliefs can reduce or eliminate a Maltese capital gains or property transfer tax liability:

• Main residence relief: a gain on the sale of an individual's sole ordinary residence can be exempt, generally where the property was the seller's main residence throughout ownership, subject to minimum occupation and resale-timing conditions — confirm with the CFR or a notary.
• Corporate reorganisations: qualifying mergers, divisions, asset transfers and share exchanges under Malta's reorganisation rules can benefit from rollover relief, deferring rather than eliminating the charge.
• Transfers between spouses and on death: certain spousal transfers and transfers on death (causa mortis) to specific relatives can be exempt, though separate duty rules may still apply.
• Housing Authority scheme: property transferred under Malta's Housing Authority arrangements can be exempt on the first €200,000 of transfer value.
• UCA / long-vacant property scheme: qualifying Urban Conservation Area or long-vacant property can benefit from an exemption on the first €750,000, under a scheme running through 31 December 2026.
• Non-residents' foreign-source gains: gains arising outside Malta are outside the scope of Maltese tax for non-residents.

Treat this section as a map of what exists rather than a substitute for confirming eligibility with the CFR before a transaction.

Legal Framework

Malta's capital gains tax rules sit within the Income Tax Act (Chapter 123 of the Laws of Malta):

• Article 4 defines the categories of chargeable income, including capital gains as a distinct head of charge.
• Article 5 is the principal charging provision, listing chargeable asset categories and how the gain is computed.
• The final withholding tax on property transfers operates as a distinct mechanism layered on top of the general Article 5 regime for most immovable property transactions, administered through the notary at the deed.
• The participation exemption is given effect through specific exemption provisions plus subsidiary Income Tax Rules on participating holdings.
• The FITWI regime was introduced by Legal Notice 188 of 2025, applying from financial years ending 31 December 2024.
• Stamp duty on the underlying documents is governed separately by the Duty on Documents and Transfers Act (Chapter 364).

Always cross-check against the Office of the Commissioner for Revenue (CFR) (cfr.gov.mt) and the Malta Tax and Customs Administration (MTCA) (mtca.gov.mt), which publish current rates and any amending legal notices. This guide reflects the framework as understood as of September 2026 and does not replace a direct check or advice from a Malta-licensed tax practitioner.

Common Mistakes to Avoid

• Assuming every property sale is taxed at progressive income tax rates. Most fall under the separate final withholding tax (8%/10% of transfer value), not the general capital gains formula.
• Forgetting the withholding tax is calculated on the full transfer value, not the net gain. 8% of the sale price can differ substantially from 35% of the profit — model both.
• Overlooking the participation exemption when selling shares through a Maltese holding company. Some sellers pay 35% on a sale that could have qualified for 0% had the structure been set up correctly in advance.
• Ignoring FITWI when modeling a company's exit. Since 2025 there are three routes (35% + refunds, participation exemption, 15% flat final tax) — the best one depends on the facts.
• Treating all cryptocurrency gains as automatically tax-free. Treatment depends on whether the activity looks like habitual trading (taxed as income) or genuine investment, and on the token's features.
• Confusing property transfer tax with stamp duty. These are two separate charges on the same transaction — both need to be budgeted for.
• Assuming non-residency means no Maltese capital gains tax at all. Non-residents still pay the property withholding tax on Maltese real estate and remain taxable on other Malta-source gains.

FAQ

What is the capital gains tax rate in Malta?
For individuals, capital gains are added to other chargeable income and taxed at Malta's progressive rates, from 0% up to 35%. Companies pay a flat 35% — or 15% flat final tax if they have elected FITWI. Most residential and commercial property sales, however, are taxed separately under a final withholding tax of 8% (or 10% for property bought before 1 January 2004) of the transfer value.

How is capital gains tax calculated in Malta?
For assets outside the property withholding regime (shares, business goodwill, IP, partnership interests), the taxable gain equals the transfer value minus the acquisition cost minus allowable expenses. The gain is then taxed at the seller's marginal income tax rate, or at 35% (or the elected FITWI rate) for companies.

Does Malta have a separate property transfer tax?
Yes. Most sales of Maltese immovable property are taxed through a final withholding tax withheld by the notary at the deed of sale — generally 8% of the full transfer value for property acquired from 2004 onward, and 10% for older acquisitions — rather than under the general capital gains rules.

What is Malta's participation exemption?
A regime under which a Maltese company's capital gains and dividends from a qualifying participating holding in another company can be exempt from tax — an effective 0% — instead of the standard 35% corporate rate, subject to equity or investment-value thresholds, holding conditions and anti-abuse tests.

What is the 15% corporate tax election in Malta?
Since 2025, any Maltese company can elect the FITWI regime — a flat 15% final tax on chargeable income under Legal Notice 188 of 2025, replacing the imputation/refund system with no shareholder refunds. The election is binding for at least five consecutive years and cannot produce a lower liability than the refund system. Whether it suits a given company depends on its profit profile and distribution policy — model it with an advisor.

Are there capital gains tax exemptions in Malta?
Yes. Key reliefs include the main residence exemption, relief for qualifying corporate reorganisations, certain transfers between spouses or on death, the Housing Authority scheme (first €200,000), and the Urban Conservation Area/long-vacant property scheme (first €750,000, through 31 December 2026).

Do non-residents pay capital gains tax in Malta?
Non-residents are taxed only on Malta-source gains — chiefly Maltese property and business assets situated in Malta — and pay the same property transfer withholding tax as residents on Maltese real estate. Foreign-source gains fall outside the scope of Maltese tax for non-residents.

Is cryptocurrency subject to capital gains tax in Malta?
It depends on the facts. Habitual, business-like crypto trading is generally taxed as income (up to 35%); genuinely long-term investment-style holdings may fall outside the charge; tokens with security-like features may be treated similarly to shares. Seek a professional opinion or ruling for your situation rather than relying on a blanket rule of thumb.

Is there capital gains tax on shares in Malta?
Gains on shares and securities listed on a recognised stock exchange, including the Malta Stock Exchange, are exempt. Gains on unlisted shares are taxed under the general capital gains rules (0–35% for individuals, 35% for companies), unless the participation exemption applies or the company has elected FITWI.

Related Heavnn Guides

• Malta Tax Residency: Rules, Timelines and Requirements
• Business Expenses in Malta
• Crypto Taxes in Malta
• Malta Non-Dom Regime Explained
• Malta Tax Incentives for Expats and Digital Nomads

Plan Your Malta Move With Heavnn

Capital gains rules are only one piece of the picture — your overall Maltese tax position also depends on your residence status, domicile, and how income and gains are structured. Use Heavnn's tax residency tool to map out your specific situation before you sell an asset, relocate, or set up a Maltese company.

Disclaimer

This article is provided for general informational purposes only and does not constitute tax, legal or financial advice. Maltese tax law, including capital gains, property transfer tax, participation exemption and FITWI rules, is subject to change and depends heavily on individual facts. Always confirm current rates, thresholds and eligibility conditions with the CFR or a licensed Maltese tax advisor before making any decision.