The Malta Chamber of Commerce, Enterprise and Industry is calling for Malta’s headline corporate tax rate to be reduced from 35% to 25% for all businesses, and to 20% for compliant businesses, arguing that the current framework has created a “dual-speed economy” that disadvantages domestically owned firms.

The proposal forms part of the Chamber’s 42-page set of policy recommendations addressed to both major parties ahead of the May 30 General Election, and reflects what its own member survey identified as a top-five concern across every economic group.

The highest rate in Europe

Malta has the highest corporate income tax rate in the European Union in 2026, standing at 35%, according to Tax Foundation figures cited in the Chamber’s document. By comparison, Germany sits just below 30%, France and the Netherlands at around 25%, and Ireland at 12.5%.

But the headline rate tells only part of the story. The Chamber points out that the current corporate tax structure favours foreign-controlled companies through the 6/7ths refund mechanism, which effectively brings their tax rate down to around 5%. Purely Maltese-owned businesses, by contrast, pay the full 35%.

The Chamber argues this creates a structural asymmetry. Foreign-controlled enterprises in Malta significantly outperform domestically controlled firms in productivity, profitability and investment intensity, in large part because the refund framework allows them to reinvest a larger share of profits. Maltese-owned firms have less capacity to reinvest, scale, and move up the value chain — entrenching, over time, a dual-speed economy.

Tying tax relief to compliance

The Chamber’s proposal goes beyond a simple rate cut. It wants the 25% rate applied to all businesses, with a further reduction to 20% reserved for businesses that meet compliance standards — a mechanism designed to reward ethical operators rather than apply a blanket reduction.

The proposal is also coupled with targeted incentives for high-potential sectors, both foreign and local, aimed at encouraging innovation, attracting higher value-added investment, and supporting export activity.

Other tax measures

The corporate tax proposal sits within a wider set of tax recommendations. The Chamber is calling for tax on COLA payments to be eliminated, and for taxes and stamp duty linked to inter vivos and causa mortis transfers of family business assets to be revisited downwards — with inter vivos rates set lower than causa mortis rates to incentivise planned succession during the lifetime of the business owner.

The Chamber is also proposing a Tourism Resilience and Reinvestment Reserve allowing tourism operators to allocate up to 20% of annual pre-tax profits into a tax-deferred reserve, taxed at a reduced 15% rate if used within three years for eligible reinvestment or to support business continuity during crises. It also wants Venture Capital Tax credits introduced with 100% tax offsets for Malta-based investors providing seed capital to Maltese startups, and businesses allowed to deduct 200% of training costs from taxable income provided the training targets the national Critical Skills List.