Unlocking Savings: Malta’s New 2025 Audit Exemption Rules for Startups and Small Businesses
Introduction
The Audit Exemption Rules 2025 (L.N.139.2025) introduce important changes aimed at alleviating compliance costs for start-ups and small companies operating in Malta.
The Usual Audit Requirements in Malta
Audit Obligations under the Companies Act
The Maltese Companies Act generally requires companies to appoint an auditor to prepare an auditor’s report, which is then submitted to the Malta Business Registry (MBR).
Audit Obligations under the Income Tax Management Act
Additionally, the Income Tax Management Act mandates that companies maintain proper financial accounts accompanied by a Certified Public Auditor’s report.
First Two Years in Business: Special Audit Exemptions & Tax Relief
Exemption from Audit under the Companies Act
Private companies that do not exceed at least two of the following thresholds at the balance sheet date are exempt from the requirement to appoint an Auditor, as well as to submit an Audited Report to the MBR:
(i) Balance-Sheet Total: EUR46,000
(ii) Net Turnover: EUR93,000
(iii) Average No. of Employees: 2
Waivers under Income Tax Management Act
Newly incorporated companies can also benefit from a waiver of the Auditor’s Report requirement for their first two account periods if all the following conditions are met:
(i) its sole shareholders are individuals;
(ii) the shareholders hold educational qualifications at Malta Qualifications Framework (MQF) Level 3 or higher;
(iii) the company was set-up within three years of those qualifications being obtained;
(iv) the company’s annual turnover does not exceed 80,000 euro (or pro-rata if the relevant accounting period is other than twelve months).
Tax Deduction as an Alternative
Alternatively, companies eligible for the waiver may elect not to use it and instead claim a tax deduction of 120% of the cost incurred for obtaining an auditor’s report, capped at 700 euro per accounting period.
Beyond the First-Two Years: Ongoing Audit Exemptions
Ongoing Exemption from Companies Act Obligations
Private companies which do not exceed two of the three following criteria are exempt from the requirement to appoint an Auditor, and the requirement to prepare and deliver an Auditor’s Report to the MBR:
(i) Balance-Sheet Total: EUR46,000
(ii) Net Turnover: EUR93,000
(iii) Average No. of Employees: 2
Simplified Review or Full Exemption under the Income Tax Management Act
Furthermore, for companies meeting two of the above criteria, the Income Tax Management Act permits submission of a less extensive Review Report (prepared under the ISRE 2400 standards) in place of a full Audit Report.
Companies meeting all three criteria are exempt from submitting either report.
How Zeta Can Support Your Business
At Zeta, we guide startups and small business through Malta’s evolving compliance landscape. Whether you’re exploring eligibility for the new audit exemptions or ensuring your accounts remain fully compliant, we’re here to help. We combine technical expertise with practical solutions, so you can focus on growing your business while we take care of the regulatory complexities.
Contact us today to discover how Zeta can support your business to scale with confidence.
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While every effort has been made to ensure that the content is accurate and up to date as of the date of publication, errors, omissions, or misinterpretations of the law may occur. Laws and regulations may change, and their application can vary based on specific circumstances.