Accounting Services in Malta for Restaurants and Bars

Like any other business, hospitality operators face a mix of taxes. The big ones include:

• Corporate Income Tax – in Malta, companies are subject to a flat 35% tax on profits after allowable deductions. However, under the full imputation system, shareholders may reclaim a substantial portion of this tax once dividends are distributed. This means the effective tax rate can be much lower for some business owners.
• VAT – the standard VAT rate is 18%. Certain tourism-related services are taxed at 7%, so it’s worth checking how your sales (food, beverages, take-away, delivery) are classified.
• Payroll Taxes & Social Security – employers must deduct income tax (PAYE) from staff wages and also contribute around 10% in social security. Employees contribute their share too, so accurate payroll management is crucial.
• Other Licenses & Duties – bars and restaurants may face extra charges like alcohol duties, health and safety fees, or local permits (for example, outdoor seating).

To ease the tax load, Malta offers several credits that restaurants and bars can claim:

• Skills Pass Support Scheme – covers up to 50% of eligible staff training and certification costs, making it easier to invest in a skilled workforce.
• Catering Capacity Building – offers tax credits of up to €10,000 for 75% of eligible expenses, including hiring qualified staff such as chefs.
• Accommodation and Food Services tax credit – provides up to €50,000 in credits, covering 20% of eligible business costs.
• Micro Invest Program – open until the end of 2026, this popular scheme gives businesses a tax credit of up to 45% of eligible expenses, with enhanced rates for Gozo-based operations.

Beyond tax credits, restaurants and bars can also benefit from grants designed to encourage growth and innovation:

• Sustainability and Digitisation grant – supports startups investing in green practices or digital upgrades, with funding of up to €100,000 per project.
• Industrial Space Rental grant – helps with renting space for expansion or new projects, offering up to €150,000 spread over three years. Applications are open until 2030.
• Accelerator Programme grant – provides up to €100,000 in support during the first seven years of activity for eligible startups.

• Always check whether your services (food, drink, takeaway, delivery) qualify for standard or reduced VAT. Misclassifying can lead to under- or over-charging VAT, and compliance risks.
• Keep detailed, accurate records of purchases, wages, refurbishments, equipment – since many incentives/credits depend on proving eligible expenditure.
• Watch deadlines. Many schemes, like Micro Invest, work retrospectively, so late applications could cost you.
• Where possible, plan investment in upgrades / digitalisation to align with incentives (green energy, digital POS systems etc.). These can deliver both operational benefits and tax savings.
• If operating in Gozo (or under special categories), explore the extra grants/tax relief there.

Happy guests keep your doors open, but healthy finances keep them open long-term. In Malta, making smart use of tax credits, grants, and incentives – while staying on top of your taxes – can give your restaurant or bar the stability it needs to thrive. And while you can navigate some of this alone, working with a professional accountant experienced in the hospitality industry ensures you stay compliant and make the most of every opportunity.

Here’s how our team of CPAs can help:

• Support with staying compliant with the tax regulations governing the supply, sale, and serving of food and beverages
• Support with all regulatory requirements for importing alcoholic beverages and cigarettes subject to excise duties
• Support in accessing tax credits available in Malta
• Assistance with filing for government grants and incentives
• VAT registration
• Payroll support
• Bookkeeping