Record keeping is one of those tasks that nobody enjoys but everybody needs to do. If you are self-employed in Malta, you are legally required to maintain proper records of your business transactions. This is not just good practice. It is the law, and failing to comply can lead to penalties, especially if you are ever audited.
Here is a straightforward guide to what you need to keep, how long you need to keep it, and how to stay organised without it taking over your life.
Legal Requirements in Malta
Under Maltese tax law, self-employed individuals are required to keep sufficient records to enable the Commissioner for Revenue to ascertain their income and verify their tax returns. The VAT Act also requires VAT-registered persons to maintain proper books and records.
In practical terms, this means you must be able to show a clear trail from your invoices and receipts through to your tax return. If the tax authorities ask to see your records, you need to be able to produce them.
What Records to Keep
Here is a comprehensive list of the records every self-employed professional in Malta should maintain:
Sales Records
- All invoices you issue to clients, numbered sequentially
- Credit notes issued
- Records of cash sales, if applicable
- Commission statements (particularly relevant for real estate agents)
Purchase and Expense Records
- Invoices and receipts for all business expenses
- Utility bills if you claim a home office deduction
- Fuel receipts if you claim vehicle expenses
- Receipts for professional development, courses, and subscriptions
- Equipment and asset purchase records
Bank Records
- Business bank statements (every month, without gaps)
- Records of all business-related bank transactions
- Loan agreements and repayment records if applicable
- Payment confirmations for significant transactions
Tax Records
- Copies of all tax returns filed
- VAT returns and supporting calculations
- Social security contribution records
- Tax payment receipts and confirmations
- Any correspondence with the Commissioner for Revenue or VAT Department
Contracts and Agreements
- Client contracts and engagement letters
- Lease agreements for office or workspace
- Insurance policies
- Partnership or collaboration agreements
- Any agreements that affect your income or expenses
Payroll Records (If You Have Employees)
- Employment contracts
- Salary records and payslips
- FS5 and FS3 forms
- Social security contributions paid on behalf of employees
How Long to Keep Records
The standard rule in Malta is to keep all business records for a minimum of six years from the end of the relevant tax year. For VAT records, the retention period is also six years from the end of the relevant VAT period.
For example, records relating to the 2026 tax year should be kept until at least the end of 2032.
Some specific situations require longer retention:
Capital assets. If you claim depreciation on equipment, vehicles, or other assets, keep the purchase records for as long as you own the asset plus six years after you dispose of it.
Property transactions. Records related to property purchases or sales should be kept indefinitely, as capital gains calculations may reference historical purchase prices.
Ongoing disputes. If you are involved in any dispute with the tax authorities, keep all related records until the matter is fully resolved, regardless of the six-year rule.
When in doubt, keep records for longer rather than shorter. Storage is cheap, especially for digital records. The cost of not having a document when you need it is much higher.
Digital vs Physical Records
Malta accepts both digital and physical records. There is no legal obligation to keep paper originals if you have a reliable digital system, though it is wise to keep originals of particularly important documents like property contracts or large asset purchases.
For most day-to-day records, digital storage is far more practical. Scanned receipts, PDF invoices, and electronic bank statements are all acceptable. The key is that your digital records must be:
- Legible. Scans must be clear enough to read all details.
- Complete. Every transaction must be recorded.
- Secure. Protected from loss, damage, and unauthorised access.
- Backed up. Stored in at least two locations (for example, your computer and a cloud service).
A practical approach is to photograph or scan receipts on the day you receive them. Paper receipts fade over time, and a receipt that is unreadable is as good as no receipt at all.
Organising Your Records
A simple filing system makes everything easier. Here is a structure that works well for most self-employed professionals:
Create folders organised by year. Within each year, have subfolders for:
- Sales invoices (issued)
- Purchase invoices and receipts (received)
- Bank statements
- Tax returns and correspondence
- Contracts and agreements
- VAT returns and calculations
Name your files consistently. A format like "2026-03-15_ClientName_Invoice042.pdf" is much more useful than "scan_final_v2.jpg".
Reconcile your records monthly. Match your invoices and receipts against your bank statements. Catch discrepancies early rather than trying to piece things together months later.
What Happens During an Audit
If the Commissioner for Revenue decides to audit your records, they will expect to see a complete and organised set of documents. They will typically request:
- All invoices issued and received for the period under review
- Bank statements for the same period
- Your VAT returns and supporting calculations
- Evidence of any deductions or claims you have made
An audit is significantly less stressful if your records are in order. Professionals with well-organised records often find that audits are resolved quickly and without issues. Those with poor records face extended scrutiny, potential penalties, and the burden of trying to reconstruct years of transactions.
The best time to prepare for an audit is now, not when you receive the notification letter.
Making It a Habit
Record keeping does not need to be a major time commitment. Spending fifteen to twenty minutes at the end of each week filing receipts, recording expenses, and updating your records is enough for most self-employed professionals. The key is consistency. A small weekly habit is far more effective than a frantic annual scramble before your tax return deadline.
Good records are the foundation of good financial management. They make tax filing easier, support better business decisions, and give you peace of mind.
Michael Cutajar, CPA — Founder of Accora.