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Accounts - Malta

Updated 07/2012

Legal requirements

No additional requirements for foreign entrepreneurs except for the submission of bank references in the case of non-EU entrepreneurs.

The Companies Act requires that all companies keep proper accounting records of:

  • all details of receipts and expenditure;
  • all stocks held, stocktaking, sales and purchases of goods by the company dealing in goods; and
  • the assets and liabilities of the company.
  • Companies Act

The Commercial Code states that all traders must:

  • maintain appropriate trade books which shall be numbered and kept by order of date;
  • draw up an annual inventory book together with a description and valuation of assets and liabilities, whatever may be their nature and origin;
  • keep letters, invoices and telegrams received and forwarded;
  • preserve trade books and other accounting documents for 5 years.

It also regulates unincorporated businesses.

Accountancy and auditing professions in Malta are regulated by the Accountancy Board via a number of accountancy profession Acts, Regulations and Directives, including:

Accounting rules

Every company is required to maintain accounting records in accordance with the Companies Act.

In addition, if a company falls within a certain thresholds (with respect to Balance Sheet total, total revenue and average number of employees) the preparation of financial statements can be made in accordance with the General Accounting Principles for Smaller Entities (GAPSE).

Single-entry

The Commercial Code requires that every trader maintains a waste book, a journal, a cash book, inventory book, and a ledger.

Double-entry

Books of accounts shall be kept on a double entry basis, in line with the requirements of the International Financial Reporting Standards.

Bookkeeping

Every company is required to keep proper accounting records providing information on receipts and expenditure, sales and purchases, assets and liabilities. Companies must submit accounts at the end of every financial year, which include a profit and loss account, a balance sheet, and notes to the accounts.

Auditing

Companies are required to submit accounts which are audited in accordance with the International Standards on Auditing - private companies meeting certain criteria which are defined in the Companies Act may be exempt.

Directive 4 of the Accountancy Profession Act provides regulations to ensure that all auditors and audit firms maintain the highest possible professional standards.

Invoicing

Schedule 12 of the Vat Act defines the contents of an invoice.

Inventory

Records on inventories should be maintained as required by the International Financial Reporting Standards. The Commercial Code requires that companies make an annual inventory containing a description and valuation of the whole estate, whatever may be their nature and origin.

Administrative procedures

Bookkeeping

Accounting records must be available for inspection at all times, and explain transactions to facilitate the preparation of financial statements.

The records are usually kept at the registered office of the company in Malta.

Companies are obliged to keep proper records which give an overall view of the company's results and transactions, and to file an annual return and financial statements with the Registrar of Companies.

Maintaining the bookkeeping comprises of recording the transactions in the cash book, books of prime entry, nominal ledger, the purchases and sales ledger, and other books. Normally, companies utilise accounting software in order to record the day to day transactions.

Inventory

Companies are required to make an annual inventory containing a description and valuation of the whole estate, whatever may be their nature and origin.

An inventory is made up of assets held for sale in the ordinary course of business, in the process of production for such sale or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

Annual accounts and Annual Return

Every company shall prepare for each accounting period individual accounts comprising the balance sheet, the profit and loss account for that period, and notes to the accounts.

The contents and form of the accounts must conform with the third schedule to the Companies Act. The format of the accounts to be submitted depends on the size of the company. Small companies may draw up abridged balance sheets and abridged layouts of profit and loss accounts.

 A small company is a company which on its balance sheet dates does not exceed the limits of two of the three following criteria:

  • balance sheet total: EUR 2,562,310.74;
  • turnover: EUR 5,124,621.48;
  • average number of employees during the accounting period: 50.

Private companies which on their balance sheet date do not exceed the limits of two of the three following criteria:

  • balance sheet total: EUR 46,587.47;
  • turnover: EUR 93,174.94;
  • average number of employees during the accounting period: 2.

Are exempted from the requirements concerning, auditing of accounts and such companies may, draw up abridged balance sheets and abridged layouts of profit and loss account and abridged notes to the accounts.

All companies must prepare an annual return in the prescribed format of the seventh Schedule to the Companies Act to be made up, upon each anniversary of registration.

Every company is also obliged to draw up its financial statements in accordance with International Financial Reporting Standards for each accounting period.

Auditing

You are required to appoint independent auditors to hold office from each annual general meeting to the next.

Auditors are required to make a report to the shareholders on every set of financial statements furnished to the shareholders at the annual general meeting.

The auditor's report must be drawn up in accordance with generally accepted auditing standards and should state whether in the auditors' opinion the annual accounts have been properly prepared in accordance with the Companies Act.

Storage submission and Publication of documents

Every company shall retain the accounting records for a period of ten years at the company's registered office. Companies are also required to submit to the Registrar of Companies a copy of the annual accounts. These must generally be accompanied by a copy of the auditors' report and the directors' report. The annual accounts must be filed within ten months from the end of the financial year.

An annual return should also be forwarded to the Registrar upon each anniversary of its registration within 42 days after the date to which it is made up.

In the case of listed companies, their Annual Financial Report shall include:

  • annual financial statements together with the Directors' Report or equivalent, and the auditors' report;
  • a statement of responsibility;
  • a report by the Directors on their compliance with the Code of principles for Good Corporate Governance; and
  • a report by the auditors on compliance with the Code of principles for Good Corporate Governance.

The company must ensure that its Annual Financial Report is made available to the public at the latest 4 months after the end of each financial year, and that it remains publicly available for a period of at least 5 years. The information shall be deemed to be available to the public when published in one or more widely circulated newspapers and in an electronic form on the website.

Invoicing

Companies and individuals are required to issue invoices or fiscal receipts for goods and services delivered to their customers. These documents must be issued on paper or electronically at the time of transaction, or if the recipient is a company or professional, within the next month. They must be kept on file for 5 years.

Resources

The government's work and business section is essentially a portal offering links to a wide variety of organisations and services as well as forms and publications.

Programmes

The Ministry of Finance, the Economy and Investment offers grants, tax calculation facilities and the chance for stakeholders to respond to pre-budget consultations.

Check also the legislation on this topic in:

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Further help

The Malta Institute of Accountants is the official accountancy body. It is responsible for encouraging the profession and maintaining quality, typically through the provisions of continuing professional education and by monitoring compliance with ethical, accounting and auditing standards.

The Malta Chamber of Commerce, Industry and Enterprise provides information on legislation affecting industry and trade, from tax legislation to customs procedures. In addition, it provides advisory services on economic and trade conditions.

Malta Enterprise is responsible for the promotion of foreign investment and industrial development in Malta. It offers assistance and advice to those who seek to learn more about the multitude of business and investment opportunities available on the island.