Bank Interest Tax Calculator
Should you let the bank deduct the 15% final tax on your interest, or take it gross and declare it at progressive rates? See which is cheaper for you.
Total interest from Maltese bank or deposit accounts for the year.
Determines the marginal rate used when you declare the interest.
Saves you €150 per year
Option A — 15% Withholding
€150
Bank deducts 15% at source, final tax, no return needed
Option B — Declare Gross
€0
Taxed at your 0% marginal rate in your return
How it works
- By default, Maltese banks deduct a 15% final withholding tax on interest — it is final and cannot be reclaimed
- You may instead ask the bank to pay you gross (no 15% deducted)
- Interest received gross must be declared in your tax return and is taxed at the normal 0–35% rates
- If your total income sits in the 0% band, declaring gives a 0% result — better than the irrecoverable 15%
Effective tax on your interest with the recommended option: 0.0%
Is bank interest taxed in Malta?
Yes. Banks deduct a 15% final withholding tax from interest by default, and you do not need to declare it. You can instead receive interest gross and declare it at progressive rates, which is cheaper if your total income stays in the 0% band and costs more once you reach the 25% band.
- Final withholding tax
- 15%
- Single, tax-free band (2026 and 2027)
- €12,000
- Married + 1 child, tax-free band
- €17,500 → €20,000 (2027)
- Parent + 1 child, tax-free band
- €14,500 → €16,000 (2027)
Frequently Asked Questions
Do I pay 15% tax on Maltese bank interest if the bank did not deduct it?
Not necessarily. The 15% is a final withholding tax that the bank normally deducts at source. If you received the interest gross (no 15% deducted), you do not pay a flat 15% — instead you must declare the interest in your income tax return, where it is taxed at the normal progressive rates (0% to 35%). If your total income is below the tax-free threshold (€12,000 for a single person in 2025 and 2026), the tax on that interest can be €0.
Is it better to let the bank withhold 15% or to declare interest gross?
It depends on your marginal tax rate. If your total income falls within the 0% band, declaring the interest gross results in 0% tax, which beats the irrecoverable 15% withholding. If you are a higher earner whose interest would fall in the 25% or 35% band, the 15% final withholding tax is cheaper. The breakeven is roughly the 15% income tax band.
Can I reclaim the 15% withholding tax the bank already deducted?
No. The 15% withholding tax on bank interest is a final tax. Once the bank deducts it at source, it satisfies your liability and cannot be claimed back, even if your income is below the tax-free threshold. To benefit from progressive rates you must ask the bank to pay the interest gross before it is paid, then declare it yourself.
Do I still have to declare interest I received gross?
Yes. If the bank did not deduct the 15% final withholding tax, the interest is not 'final-taxed' and must be reported in your annual income tax return under investment income. Even if the resulting tax works out to €0 because you are within the tax-free band, the interest should still be declared.
Which bank interest is subject to the 15% withholding tax in Malta?
The 15% final withholding tax applies to interest paid by Maltese banks and certain other local payors to resident individuals, under the Investment Income Provisions of the Income Tax Act. Interest from some instruments, such as Malta Government Stock, can be received gross. Foreign-source interest follows different rules and may need to be declared.
Does Budget 2027 change tax on bank interest in Malta?
The 15% final withholding tax on bank interest stays the same in 2027. Because the 2027 tax-free bands are higher for married couples and parents with children, more families may pay less by declaring interest at progressive rates and claiming back the tax withheld. Select 2027 in the calculator to compare.
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