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Accounting for IT Companies in Malta

Accounting for IT Companies in Malta

IT is one of the most important industries in Malta mainly thanks to the large number of expats working from here. Setting up a business in this field comes with many advantages, among which the fact that they can service clients all over the European Union is one of the most important.

The establishment of an IT company can be completed fast and one of the most important aspects to consider after its registration is related to its accounting.

Our Malta CPA accountants provide tailored accounting services for IT companies helping business owners remain focused on their activities. We invite you to read below how we can help you.

List of services provided by our accounting firm to IT businesses in Malta

Before we present you our main services, we would like to point out that you can get in touch with us before you set up your company and obtain a quotation to establish your accounting budget.

Our accountants in Malta are at your service from the beginning with tax and VAT registration support, followed by:

  1. bookkeeping which is one of the main requested services by all types of companies in Malta;
  2. payroll and HR assistance in order for you not to have to deal with employment and social contribution issues. HR experts concentrate on a single topic, such as hiring or training new staff. HR generalists are in charge of several different responsibilities at once. Smaller organizations typically have one or two such employees, whereas larger businesses typically have a higher number of HR specialists focused on certain functions and services. However, there is also the possibility of outsourcing the HR and payroll in Malta.
  3. audits – our auditors in Malta can perform statutory and independent audits for all sizes of enterprises. Through different documented transactions, financial statements depict a company’s funding, investing, and operating operations. The financial statements are created domestically, so they must be carefully reviewed during an audit in Malta. Please contact us if you need support or if you are interested in a personalized service.
  4. preparation of financial statements and filing services;
  5. support in obtaining various industry-related incentives.

Our accounting firm in Malta can also advise IT business owners on the best structure for their companies from a financial point of view. At the moment, the private limited liability company is a good choice for both micro, small, and medium-sized entities, as these are predominant in the IT market in this country. If you need accounting services in other countries, such as UAE, we can put you in touch with our local partners.

We can help you register with the Maltese tax authorities

No matter the type of structure selected, tax registration is the first mandatory step to complete after incorporating a business in Malta. This applies no matter if you are a sole trader or if you have decided on a corporate form for your enterprise. VAT registration is voluntary at this stage, however, there are 3 minimum stages from which this procedure becomes mandatory. The smallest one is having an annual turnover of 14,000 euros.

Our accountants can help you apply for a VAT number from the beginning of your operations so that you avoid fiscal issues when reaching the minimum threshold.

Bookkeeping and payroll services for IT companies

The IT sector is an important one and in Malta, it is associated with other industries, among which gaming and fintech. This is why it is expected for such businesses to issue many invoices that need to be kept track of and introduced into the accounting system.

From an invoicing point of view, bookkeeping is one of the most support we can offer our clients, as it requires using specific software. Moreover, we can also draft various other documents related to the invoices your company issues.

If you hire employees, dealing with the payroll which implies registration as an employer and of your employees and paying all the related contributions is of key importance. Make sure you don’t skip any of the formalities by using our accounting services.

Audit for IT companies in Malta

Maltese IT companies are obligated to engage independent auditors, appointed annually from one annual general meeting to the next. These auditors are tasked with presenting reports to shareholders on the financial statements provided during the IT company’s annual general meeting. In adherence to the Companies Act, auditor reports must be crafted in accordance with the International Standards on Auditing. If you are seeking any audit services in Malta for your IT company, our auditors can offer you assistance.

Additionally, all IT companies must submit an annual income tax return. Our tax advisors in Malta can offer assistance in this matter. Those with a financial year concluding on December 31st must file by the following September 30th. For other IT companies, the tax return deadline is either the end of the ninth month after their accounting date or March 31st of the following calendar year, whichever is later. Individuals and other taxpayers must submit their tax returns by June 30th. Our accountants in Malta can guide you regarding the deadlines for annual income tax returns.

Annual return submission with the Malta Business Registry is a mandatory yearly requirement. IT companies need to provide information such as the registered office address, a summary of share capital and debentures, a list of shareholders, and particulars of directors. This annual return should reflect the IT company’s status on each anniversary of its registration and be sent to the Registrar within 42 days of that date.

Ensuring timely filing of annual returns and accounts is the responsibility of IT company officers. Depending on the authorized capital, a fee ranging from €100 to €1,400 must accompany the return, with potential reductions if the electronic format option is chosen.

Beyond annual obligations, directors or company secretaries must promptly notify the Registrar of specific changes and events within 14 days. These notifications typically pertain to alterations in directors or company secretaries, changes in legal representation, transfers and transmissions of shares, amendments to the memorandum or articles of association, alterations in the registered office, issues and allotment of shares, and the dissolution of the company. If you are interested in learning about other obligations that IT Maltese companies are required to fulfill, we can assist you. With the help of our auditors in Malta, you can get comprehensive support in navigating the intricate landscape of financial compliance.

Preparation of financial statements with our help

Interpreting financial statements is a critical process that entails a thorough examination of the presented data to gain valuable insights into an IT company’s financial status and performance. Various methods are commonly employed for this interpretation. Horizontal analysis involves comparing financial data across multiple periods to discern trends, changes, and growth rates, providing a basis for assessing performance and pinpointing areas for improvement. Vertical analysis, on the other hand, expresses each line item on financial statements as a percentage of a common base, such as total assets or revenues, facilitating a deeper understanding of the composition and structure of the IT company’s financials. Additionally, ratio analysis is crucial, involving the calculation and comparison of financial ratios to assess an IT company’s overall financial health, performance, and efficiency, with comparisons made to industry benchmarks and historical data. Another method, comparative analysis, focuses on benchmarking an IT company’s financial performance against competitors or industry peers, offering insights for strategic decision-making and performance enhancement.

If you require assistance with the preparation of financial statements, our accounting firm in Malta is here to provide guidance. Our team of professionals is well-versed in the intricacies of financial reporting and stands ready to ensure the accuracy and compliance of your statements. By leveraging our accounting services in Malta, you can navigate the complexities of financial disclosure with confidence. Whether you are a small business or a larger corporation, our CPA in Malta is committed to delivering tailored solutions to meet your specific needs.

Understanding reporting formats in Malta

Financial statements in Malta usually come in a specific layout outlined by the MFRS (Malta Financial Reporting Standards). The balance sheet, income statement, cash flow statement, and statement of changes in equity need to follow the rules set by the MFRS for how they are presented and what information they include. This helps ensure consistency and transparency in financial reporting. If you have any questions about reporting formats in Malta, we can answer your concerns. Our audit firm in Malta offers assistance in this regard.

Taxation of IT companies in Malta

Once registered for taxation, any company must start issuing invoices for the services or goods it provides, respectively sells. IT companies are subject to the following taxes in Malta:

  • the corporate tax;
  • the VAT;
  • the dividend tax, if it issued dividends.

The standard rate of the corporate tax is 35%, however, if you are a foreign owner of an IT company, you can benefit from very advantageous tax refunds which can lead to an important decrease in the overall tax rate applied. For more information, you can get in touch with our accounting experts in Malta who will explain what the refund system consists of.

The IT industry in Malta

Information, technology, and communication (IT&C) is one of the leading economic sectors in Malta as it has several branches and is present in many other industries.

According to the Malta Information Technology Authority, this sector has an important contribution to the economy, as the latest numbers indicate that:

  • the market size of the software development sector in Malta is expected to be EUR 1.2 billion;
  • IGaming and fintech are its main subsectors and they contribute 15% of the Gross Domestic Product;
  • these also employ around 10,000 people.

We also offer payroll services in Malta, if you are interested. Please get in touch with us. If you want to set up or have an IT business and need accounting services in Malta, do not hesitate to rely on our specialists for a customized offer. Select the services you need and contact us anytime!