Major changes to audit obligations for Maltese companies have taken effect. The Audit Exemption Rules, 2025 (L.N. 139 of 2025), which apply to financial periods commencing on or after 1 January 2025 (with certain rules applicable earlier), bring with them new criteria under which companies may be exempt from statutory audit.
Here’s what you need to know:
1. New Audit Exemptions for Companies Act Entities
Under the new rules, private limited liability companies may now be exempt from having their financial statements audited if they qualify as micro entities.
A company qualifies as a micro entity if it does not exceed two of the following three thresholds:
- Turnover ≤ €93,000
- Total assets ≤ €46,600
- Average number of employees ≤ 2
Companies meeting all three criteria are now fully exempt from presenting an audit report within their financial statements. Companies meeting two out of three criteria are no longer subject to a statutory audit, but will still require a review engagement, which is an assurance service provided under other international standards (such as ISRE 2400).
2. Changes for Merchant Shipping Companies
Companies registered under the Merchant Shipping Act that fall within the thresholds of Regulation 64 of the Shipping Organisations regulations may also be exempt from presenting an audit report. These thresholds are significantly higher:
- Turnover ≤ €12 million
- Total assets ≤ €6 million
- Average number of employees ≤ 50
3. What Remains Unchanged
Even if your company qualifies for exemption:
- Financial statements must still be prepared in accordance with GAPSME or IFRS. These still need to be submitted to authorities/ Malta Business Registry.
- Tax computations must still be performed, and the tax return must be prepared/filed with the Malta Tax and Customs Administration.
- In many cases, banks, regulators or foreign shareholders may still request assurance or audited financial information. Further guidelines are expected for companies forming part of fiscal units, or other specific circumstances.
4. How CLA Malta Can Support You
To help clients navigate these changes, CLA Malta offers the following:
- Service for exempt companies:
- Preparation of financial statements under GAPSME
- Submission of financial statements to the Malta Business Registry
- Preparation of the annual tax computation
- Review engagements for micro companies requiring limited assurance:
- Review of financial statements and preparation of the assurance report as required.
- Support for Merchant Shipping companies and their introducers:
- End-to-end support for tax return preparation
- Optional preparation of financial statements under GAPSME/IFRS, as requested.
- ISA audits for companies with Boards/stakeholders requiring external assurance.
5. Next Steps
If you believe your company might be affected, or if you are unsure how these rules apply to your group, we encourage you to reach out to us.
At CLA Malta, we are committed to helping our clients stay compliant and make informed decisions. We will continue to follow the detailed guidelines as they are published by MTCA, and update our clients accordingly.