The Definition of and Approach to the Taxation of Crypto-Currencies in Malta


Malta is one of the countries most advanced in terms of legislation regarding crypto-currencies and has developed a pragmatic approach in relation to the taxation of this asset type.

The Malta Commissioner for Revenue has issued three guidelines regarding the tax treatment of distributed ledger technology (‘DLT’) assets. Each of the guidelines relates to a different tax: income tax, VAT, and the duty payable on documents and transfers.

Categories of DLT Assets

For the purposes of taxation DLT assets are categorised as follows:

  • Coins – this category refers to DLT assets, that do not have any characteristics of a security, that have no connection with any project or equity relating to the issuer, and whose utility, value or application is not directly related to the redemption of goods or services. Functionally coins represent the cryptographic equivalent of ‘fiat currencies’.
  • Financial tokens – this category refers to DLT assets with characteristics that are similar to equities, debentures, units in collective investment schemes, or derivatives, and include financial instruments. Generally, they are known as ‘security’, ‘asset’ or ‘asset-backed’ tokens. Alternatively, such tokens may provide potential reward, based on performance or voting rights, or represent ownership in assets, or rights secured by an asset, as in asset-backed tokens, or a combination of the above.
  • Utility tokens – this category refers to a DLT asset whose use, value or application is restricted solely to the acquisition of goods or services, either within the DLT platform, or within a limited network of DLT platforms. This category also includes all other DLT assets that are tokens and whose use is restricted solely to the acquisition of goods or services, whether or not listed on a DLT exchange. They have no relation to the equity of the issuer and do not have the characteristics of a security.

It may be possible for a token to contain the features of a financial and a utility token, depending on the terms and conditions of the relevant token. In this case the token is referred to as a ‘hybrid’ and taxation will depend on how the hybrid token is used; as a financial token, as a utility token, or as a coin.

Income Tax Treatment of DLT Assets

A transaction involving DLT assets, in terms of income tax, is treated in the same way as any other transaction, with reference to the nature of the activities, the status of the parties and the specific facts and circumstances of the particular case.

Ultimately, the tax treatment of any type of DLT asset will not necessarily be determined by its categorisation, but will depend on the purpose for and context in which it is used.

When a payment is made or received in a cryptocurrency it is treated like a payment in any other currency, for income tax purposes. Accordingly, for businesses which accept payment for goods or services in cryptocurrency, there is no change to when revenue is recognised or the manner in which taxable profit is calculated. The same applies to payments of remuneration, such as salaries or wages, which are regarded as taxable in terms of the general principles. When a payment is made by means of the transfer of a financial or utility token, it is treated like any other ‘payment in kind’.

For the purpose of income tax, transactions involving DLT assets, are evaluated with reference to the market value of the DLT asset:

  • the rate established by the relevant Maltese Authority, OR (if such a rate is not available);
  • by reference to the average quoted price on a reputable exchange, on the date of the relevant transaction or event, OR;
  • other methodology that meets the requirements of the Maltese Commissioner of Revenue.

Examples of the Application of General Tax Principles to Transactions Involving DLT Assets

  • Transactions in COINS

The tax treatment of transactions involving DLT coins is identical to the tax treatment of transactions involving fiat currency. The profit realised from exchanging coins is treated in the same manner as the profit derived from the exchange of fiat currency. Gains and/or profit within the revenue account, from the mining of cryptocurrency, represent income. DLT coins fall outside the scope of capital gains tax.


Returns derived from the holding of financial tokens, for example, payments such as dividends, interest, premiums etc., in a cryptocurrency or in another currency, or in kind, are treated as income for tax purposes.


The tax treatment of the transfer of a financial or utility token, depends on whether the transfer is a trading transaction or the transfer of a capital asset.

If the transfer is a trading transaction, the consideration will be treated as a receipt in the revenue account and will be treated as a trading profit.

In the case of the transfer of a financial token, if it is not a trading transaction, the transfer may fall under the scope of capital gains tax.

  • Treatment of INITIAL OFFERINGS

An initial offering of financial tokens (or token generation event), typically  involves raising capital. The proceeds of such an issue are not treated as the income of the issuer and the issue of new tokens is not treated as a transfer, for the purposes of capital gains tax. Gains or profits realised from the provision of services or the supply of goods will represent income.

  • VAT

In relation to VAT, a transaction involving DLT assets is analysed in the same manner as any other transaction, with the place of supply of the goods or services always being taken into consideration.

  • DUTY on Documents and Transfers

When a transfer involves DLT assets that have the same characteristics as ‘marketable securities’, they are subject to duty, in accordance with the provisions of the Malta ‘Duty on Documents and Transfers Act’.

Additional Information

If you would like further information on this subject, please contact the Dixcart office in or your usual Dixcart contact.


Increasing Demand for Malta Freeport Services and Regulation of Malta Free Zones To Promote Further Expansion

Malta’s Strategic Location in the Mediterranean

Malta is a country located in a strategic position in the middle of the Mediterranean. Due to its location Malta has been a major centre for maritime operations for generations. This historical heritage and robust transport links, via air and sea, help to make Malta an ideal hub to establish an international company.

Malta’s strategic geographical location make it the gateway port into Europe from Africa, Israel and beyond. Malta is an attractive place to do business, offering year-round great weather and short commutes to and from Europe with direct flights to several European capitals.

Malta Free Port

As one of the Mediterranean’s key transhipment ports, Malta Freeport represents a strategic platform for shipping lines that have chosen it as their Mediterranean hub port, being located at the crossroads of some of the world’s greatest shipping routes and at the heart of the Europe/Maghreb/Middle East triangle.

Since 1988, Malta Freeport has enjoyed remarkable growth and is now a major transhipment port in the Mediterranean region, enjoying positive international recognition, as a reliable and credible port, with global carriers.

Malta Freeport focuses on the ‘hub’ concept, whereby cargo is discharged from large mother vessels and relayed to a network of regional ports by regular and frequent feeder vessels. Around 96% of Malta Freeport’s container traffic is transhipment business. This logistical concept offers various benefits to Malta Freeport clients, including; fewer mainline port calls, and reduced voyage times through minimal diversions and shorter transit times, enabling shipping companies to concentrate on profitable voyage legs.

New Free Zones – Authorised Undertakings and Permitted Activities

EU member states can introduce free zones, where non-European Union goods may be stored in the EU, without being subject to import duty, other charges and/or relevant commercial policies, as long as the activities being undertaken in the free trade zones do not prohibit the entry or exit of goods into or from the customs territory of the European Union.

To meet the increasing demand for Malta Freeport services, the Maltese Authorities have created new legislation, the ‘Malta Free Zones Act’. This provides for the regulation and administration of the business of the Free Zones in Malta, with the objective of encouraging economic development and the generation of employment in Malta.

The Free Zones Act provides a regulatory framework and has introduced the concept of public/private partnerships to operate in the free zones.

What Type of Activities Can be Carried Out In the Malta Free Trade Zones?

A trade or business being undertaken in the Free Trade Zone must principally be:

  • the production or manufacturing of goods, materials, commodities, equipment, plant or machinery;
  • the assembly, testing, repair and/or maintenance of goods, materials, commodities, equipment, plant or machinery;
  • the labelling,  packaging,  sorting,  dividing, warehousing,  storage,  exhibition,  assembly and any related activities, in relation to goods, materials, commodities, equipment, plant or machinery, including where such goods are acquired in bulk and are to be processed within a Free Zone in preparation for their eventual sale or distribution;
  • any activity involving the provision of services relative to, or concerning logistics as may be approved by the Maltese Authorities;
  • the carrying out of any activities as may be approved by the Maltese Authorities during the time that the goods are being held in a Free Zone or in preparation for their eventual transhipment;
  • any activity concerned solely with the conduct of a Free Zone including, but not limited to; stevedoring, wharfage, operation of terminals and container handling;
  • the rendering   of   services   analogous   or complementary to the activities referred to above; and
  • the carrying out of industrial, commercial or service activity as prescribed in guidelines issued by the Maltese Authorities.

Additional Information

The Dixcart office in Malta has extensive experience in establishing and advising trading companies including those choosing to use the Free Port in Malta.

For further assistance please contact us on or speak to your usual Dixcart contact.

Effective Family Wealth Planning

Dixcart Expertise in Family Wealth Planning

The Dixcart Group has over forty-five years’ family wealth planning experience and assists clients in running and managing Family Offices.

We are very familiar with the issues facing families in this ever-changing international world and have extensive experience in providing trustee services in a number of jurisdictions.

We take time to establish and develop close relationships with the relevant family and with the other professionals advising them. As well as providing technical expertise in terms of structuring we also understand family dynamics and frequently assist in offering advice as to how to improve communication and how to avoid potential conflict, before it happens.

Recent Changes

Recent changes in terms of global tax regulations and increasing international tax transparency are vital to take into consideration in relation to the implementation of strategies to preserve family wealth and family business ownership structures.

Relatively new global regulations include: Common Reporting Standard (‘CRS’), the US Foreign Accounting Tax Compliance Act (‘FATCA’), and numerous ultimate beneficial ownership registers, which have been implemented across a variety of jurisdictions.

What are the Key Considerations to Achieve Effective Wealth Management?

Please see below the key areas that need consideration in relation to the management of wealth and succession planning, and the type of reviews that need to take place on a regular basis.

Succession and Inheritance Planning

  • Set up or review policies and procedures to ensure the adequate preservation and transfer of wealth to the next generation.
  • Review the ownership structure of any family businesses and other relevant assets.
  • Understand how relevant local laws would apply, in relation to inheritance (for example; Civil Law, Shari’a Rules etc.).

Structuring and Tax Advice

  • Consider where all relevant family members are resident and also tax resident.
  • Consider or review structuring options (e.g. use of holding companies and/or family wealth protection vehicles such as; family investment companies, foundations, trusts etc.
  • Review international investment structures, including the holding of real estate, from a tax and asset protection perspective, in particular in relation to ‘BEPS’. 

Confidentiality Management

A procedure needs to be developed to deal with relevant confidential information requests from financial institutions and third parties.

Family Governance

  • Successors need to be identified and their role discussed with them.
  • Develop open communication amongst family members regarding decision making strategies and processes.
  • A ‘Family Constitution’ is a useful way to formalise family governance and to prevent potential future conflict.
  • Create or identify education and training programmes to groom the next generation.

Contingency Planning

Rules and procedures (such as shareholder agreements or trust documentation forming a ‘Family Constitution’)  should be in place to protect the family business in the case of unexpected events:

  • Policies and procedures to underwrite business continuity.
  • Use of appropriate legal structures to provide as much asset and wealth protection as possible.
  • Consider ‘citizenship by investment’ programmes in reputable jurisdictions, to provide opportunities for the tax residence of family members to potentially be diversified.

Family Office Advisory Services

  • Consider the segregation of the family’s wealth from the family business(es).
  • Develop a strategy regarding the use of the profits derived from the family business and investments, that is not going to be re-invested.
  • Create a team to manage the wealth (a Family Office).

Additional Information

If you would like further information regarding a well-considered and comprehensive approach towards succession planning, please speak to your usual Dixcart contact or to a member of the professional team at the Dixcart office in the UK:

Please also see our Private Client page.