Importing a Car to Malta – A Costly Business

Importing a car to Malta is expensive. Really expensive. But why is the system set up this way, and is there any way around the madness?

High Taxes on Used Imports

Bringing a vehicle purchased abroad into Malta triggers significant taxes. Originally, the amount due was determined by individual appraisals, but because this led to massive inconsistencies, a standardized system was introduced in 2009. This system calculates a fixed value for every car based on a specific formula.

You can calculate the potential cost for your vehicle on this specific government website. Be warned: the result of this calculation is often a nasty surprise. Depending on the age and mileage of the car, the tax can amount to 60% of the vehicle's original new price. To give you a concrete example: for a compact class car that cost €25,000 new, you could be looking at a tax bill of €15,000.

Saving Taxes on Car Imports

It isn't all doom and gloom, however. Just as I help clients optimize their business taxes with a Malta Limited, there are ways to optimize your car import costs too.

If you are relocating to Malta and want to bring your car with you, you are exempt from paying Registration Tax—provided the car has been registered in your name for longer than two years.

However, if you are bringing in a newer car, or one you have owned for less than two years, you will still have to pay the high import duties. And watch out: if it is considered a "new" car (which includes vehicles with less than 6,000km on the clock), you will get hit with VAT on top of everything else.

Government Reaction and Environmental Focus

The government tweaked these rules back in January 2009 following international criticism, as Malta was pretty much standing alone with its enormous tax burden on imported cars. In that same update, general taxes on small and mid-sized cars were lowered, while taxes on larger vehicles were increased. The goal was clearly to create an incentive for buying more environmentally friendly cars.

As you can see: Importing a car can be expensive, but it doesn't have to be if you meet the exemption criteria. The message from the Maltese government is fairly blunt: if you want to drive a brand-new car here, they would much prefer you buy it locally rather than import it.