Accounting Records in Malta 2026: Companies Act Requirements and Common Pitfalls

By the EGM Assurance Editorial Team . Last reviewed May 2026 . 14 min read

Every company registered in Malta must keep proper accounting records. This is one of the most fundamental - and most frequently underestimated - obligations a director carries. The records are not just an internal convenience or a matter for the bookkeeper: they are a statutory duty under the Companies Act, the foundation on which the company's financial statements, tax return and (where required) audit are built, and a direct source of personal exposure for directors when they are poorly kept. A company with disorganised, incomplete or missing records faces higher audit costs, delayed filings, rejected tax positions, and - in the worst cases - personal liability for the people who run it.

This guide explains what the law actually requires. It covers the core obligation under Article 163 of the Companies Act, the specific categories of records the Act requires, what "proper accounting records" means in practice, the other statutory records that must be kept at the registered office, the 10-year retention rule, where records may be kept (including the rules for records held outside Malta), the first accounting period under Article 164, the approval and filing deadlines under Article 182, and the separate retention requirements imposed by tax, VAT, Commercial Code and stamp-duty legislation. It closes with the most common bookkeeping pitfalls and the director-duty and liability considerations that make getting this right worthwhile. The position reflects the law as at May 2026.

Throughout, we refer to the Companies Act (Chapter 386 of the Laws of Malta) as "the Act", the Income Tax Management Act (Chapter 372) as "the ITMA", and the Malta Business Registry as "the MBR".

1. The core obligation: Article 163 of the Companies Act

Article 163 of the Companies Act is the source provision. It requires every company to keep proper accounting records. The records must be sufficient to show and explain the company's transactions, and must satisfy two specific tests:

• They must disclose with reasonable accuracy, at any time, the financial position of the company at that time - i.e. it should be possible to establish where the company stands financially on any given date, not just at year-end.

• They must enable the directors to ensure that any balance sheet and profit and loss account prepared by the company complies with the requirements of the Companies Act - i.e. the records must be good enough to support the production of compliant financial statements.

The categories of records the Act specifically requires

Beyond the general standard, Article 163 specifies the categories of accounting records every company must keep. In practice these are:

• All sums of money received and expended by the company, and the matters in respect of which the receipt and expenditure took place - i.e. not just the amounts, but what each was for.

• A record of the assets and liabilities of the company.

• Where the company's business involves dealing in goods: statements of stock held at the end of each accounting period; the stock-takings from which those statements are prepared; and (except for goods sold by ordinary retail) statements of goods sold and purchased, identifying the goods and the buyers and sellers in sufficient detail.

The phrase "show and explain the company's transactions" is doing real work. Records that merely record that money moved are not enough; they must explain the nature and purpose of each transaction.

What "proper accounting records" means in practice

The Act sets a principles-based standard rather than prescribing a specific bookkeeping system. "Proper" is judged by whether the records meet the tests above, not by whether a particular software package or ledger format is used. In practice, proper accounting records for a typical Maltese company will include a general ledger capturing all transactions, sales and purchase day books or their software equivalents, a cash book or bank transaction records reconciled to bank statements, supporting documentation (invoices, receipts, contracts, bank statements) for every entry, a fixed asset register where the company holds capital assets, and inventory records where the company holds stock.

The records must be kept on an ongoing basis, not reconstructed at year-end. The "reasonable accuracy at any time" test means a company that only assembles its records once a year, in time for the auditor, is not strictly compliant - even if the year-end financial statements are ultimately accurate. The obligation is continuous.

Currency of the records

Accounting records must be kept in the same currency as the company's share capital. A company with share capital denominated in euro keeps its records in euro; a company with share capital denominated in US dollars keeps its records in US dollars. This aligns the records, the share capital and the financial statements in a single reporting currency and avoids translation distortions in the statutory accounts.

Related guides: The Audit Report Explained: What Every Section Means

2. What must be kept at the registered office

The accounting records are not the only statutory records a Maltese company must maintain. The Companies Act requires every company to keep, in addition to its accounting records, a set of corporate registers and minute books. Taken together, the records that a company must keep - and that should be held at, or be readily available from, the registered office - are:

• The accounting records described in Section 1 (general ledger, day books, cash and bank records, supporting documents, asset and stock records).

• The register of members - recording the shareholders and their holdings.

• The register of debentures - where the company has issued debentures.

• Minutes of proceedings of general meetings - the record of shareholder resolutions and meetings.

• Minutes of proceedings of meetings of the board of directors - the record of board decisions.

Other statutory records also commonly held with these include the register of beneficial owners, the register of directors and company secretary, and copies of the company's filed returns and constitutional documents. The corporate registers and minute books are distinct from the accounting records and have their own statutory purpose, but in practice they are maintained together as the company's core record set.

Where the accounting records may be kept

Article 163 governs where the accounting records are held. The default position is that records are kept at the company's registered office in Malta. However, the directors may decide to keep them at such other place as they think fit - including, in principle, outside Malta. In all cases, the records must be open to inspection by the officers of the company at all times.

Records kept outside Malta

Where a company chooses to keep its accounting records at a place outside Malta, the Act imposes an additional safeguard. The company must keep, at a place in Malta, such accounts and returns as will disclose with reasonable accuracy the financial position of the company's business at intervals not exceeding six months, and will enable the company's balance sheet and profit and loss account to be prepared. In other words, even if the detailed records live abroad, a six-monthly financial summary sufficient to prepare the statutory accounts must be maintained in Malta.

This matters for international groups that centralise their bookkeeping in a shared service centre outside Malta. Centralising the detailed records is permitted - but the Malta-based six-monthly returns requirement must still be satisfied, and the records must remain accessible to the company's officers on demand. A purely offshore set of records with nothing held in Malta does not satisfy Article 163.

Electronic records

Maltese law accommodates electronic record-keeping. Cloud accounting platforms and electronic document storage are widely used and acceptable, provided the records remain complete, accurate, retrievable and capable of being produced for inspection. Where records are held in the cloud on servers outside Malta, directors should consider whether the six-monthly Malta-based returns requirement is engaged, and ensure the records can be accessed and produced in Malta when required.

3. The 10-year retention rule

Accounting records must be preserved for a minimum period of ten years under the Companies Act. This is one of the longest retention periods in Maltese business law and is frequently underestimated by directors who assume records can be discarded after a few years.

When the ten years start to run

The general rule is that the ten-year period runs from the date the records are made. However, the Act contains an important refinement: where the accounting records are kept in a bound or unified form, the ten years commence from the date of the last entry made in them. For a continuously maintained ledger or accounting system, this effectively means the retention clock for the whole record set runs from the last entry - so an ongoing accounting system should be retained for ten years from its final entry, not from the date each individual entry was made.

The practical implication: for a typical company using a continuous accounting system, the full set of records for any given period should be retained for at least ten years after that period closes. Many directors retain records for the full life of the company plus ten years to be safe, particularly where the records are electronic and storage is inexpensive.

Retention on dissolution

The retention obligation does not disappear when a company is wound up. On dissolution, the liquidator (or the person elected to keep the records) must preserve the accounting records and documents for the remainder of the ten-year period. Where that person dies, their heirs must deliver the records to the Registrar within six months, and the Registrar keeps them for the remainder of the prescribed period. Directors contemplating a liquidation should plan for record retention as part of the wind-down, not treat it as ending with the company.

4. The first accounting period and accounting reference date

A company's record-keeping and reporting cycle is anchored to its accounting reference date - its financial year-end. Two provisions govern how this is set.

Setting the accounting reference date

A newly incorporated company may specify its accounting reference date by giving notice to the Registrar within nine months of registration. If it does not, the accounting reference date defaults to 31 December. Most Maltese companies adopt a 31 December year-end, aligning with the calendar year, but a company is free to choose a different date where it suits the business (for example, to align with an international parent's year-end).

The first accounting period: 6 to 18 months

Under Article 164 of the Companies Act, the first accounting period begins on the date of the company's registration. It must be a period of not less than six months and not more than eighteen months. This flexibility lets a company align its first year-end with its chosen accounting reference date - a company registered in, say, September can run a short first period to 31 December of the same year, or a long first period to 31 December of the following year, as it prefers.

Subsequent accounting periods are ordinarily twelve months. The choice of first-period length has practical consequences: a longer first period defers the first set of statutory accounts and the first audit (where required), while a shorter first period brings them forward. Directors should make this decision deliberately at incorporation rather than by default.

5. From records to financial statements: the approval and filing cycle

Proper accounting records are the input; the statutory financial statements are the output. The Act sets out who is responsible, the framework to be used, and the deadlines.

Directors' responsibility for the financial statements

Under Article 167 of the Companies Act, the directors are responsible for preparing the company's annual financial statements. This responsibility cannot be delegated away - a director who engages an accountant or outsources the bookkeeping remains legally responsible for the resulting financial statements. The directors must also prepare a statement of their responsibility for maintaining proper accounting records, safeguarding the company's assets, and preparing financial statements that comply with the Act and the applicable financial reporting framework.

The applicable financial reporting framework

Maltese companies prepare their financial statements under one of two frameworks. GAPSME (the General Accounting Principles for Small and Medium-Sized Entities) is the default framework for qualifying small and medium-sized companies for financial reporting periods beginning on or after 1 January 2016. Alternatively, the directors may elect by board resolution to apply IFRS as adopted by the EU. Large companies and public-interest entities fall outside the scope of GAPSME and must use IFRS. The choice of framework affects disclosure and measurement, but does not change the underlying obligation to keep proper accounting records - the records must be good enough to support whichever framework applies.

Approval deadlines under Article 182

The directors must lay the annual financial statements before the company in general meeting for approval. Under Article 182, the approval deadlines are:

• Private companies: the financial statements must be approved within ten months after the end of the accounting period. For a 31 December year-end, this means approval by 31 October of the following year.

• Public companies: the financial statements must be approved within seven months after the end of the accounting period.

Filing with the MBR

Following approval, the company must file a copy of the annual financial statements with the Malta Business Registry within 42 days. Where an audit is required, the financial statements are accompanied by the auditor's report and the directors' report. The combined effect for a private company with a 31 December year-end is the familiar "10 months plus 42 days" rule - approval by 31 October, filing by mid-December. Newly incorporated companies frequently miss their first-year deadline because the first accounting period length and the made-up date are not what the directors assumed; the cycle should be diarised from incorporation.

6. The tax, VAT and other retention overlays

The Companies Act is not the only source of record-keeping obligations. Several other statutes impose their own, parallel requirements, each with its own retention period. A director needs to be aware of all of them - though, as explained below, a single ten-year retention policy satisfies them all.

Income tax records - nine years

The Income Tax Management Act requires every company carrying on a trade, business, profession or vocation to keep proper and sufficient records of its income and expenditure so that its income and allowable deductions can be readily ascertained. These records - including the accounts of sums received and expended, sales and purchases, the profit and loss account and the balance sheet - must be retained for at least nine years following the completion of the transaction, act or operation to which they relate. The detailed requirement and retention period are set out in Article 19 of the ITMA.

Article 19(4)(a) of the ITMA also historically reinforced the requirement for proper records as part of the company's tax records. Until 2025, this tax-record requirement effectively forced almost every Maltese company to obtain an auditor's report regardless of any Companies Act size exemption. Legal Notice 139 of 2025 (the Audit Exemption Rules) restructured that position, but the underlying obligation to keep proper and sufficient records for tax purposes is unchanged. Whether or not a company qualifies for audit exemption, it must still keep records good enough to support an accurate tax computation and return.

VAT records - six years

Under the VAT Act (Chapter 406), every VAT-registered company must keep proper accounts and records of its economic activity - sufficient to establish the date, value and nature of each transaction, the VAT chargeable, and the input VAT deductible. VAT records include all tax invoices issued and received, fiscal receipts, credit and debit notes, and import/export documentation. The VAT retention period is six years from the end of the year to which the records relate. Where the partial-attribution provisions on capital goods or immovable property apply, the six years run from the end of the relevant five-year or twenty-year adjustment period.

Commercial Code and stamp duty

Two further regimes apply. Under the Commercial Code (Chapter 13), every trader must keep its trade books, together with the originals of letters and invoices received and copies of those sent, for five years - reckoned, in the case of trade books, from the date of the last entry. Under the Duty on Documents and Transfers Act (Chapter 364), documents within the scope of that Act must be preserved for at least four years after the duty was, or ought to have been, paid.

Reconciling the different retention periods

The regimes impose different periods: ten years under the Companies Act, nine years for income-tax records, six years for VAT, five years under the Commercial Code, and four years for stamp-duty documents. Because the Companies Act period is the longest, a company that retains all accounting records for ten years from the last entry will comfortably satisfy every other retention requirement. The simplest compliant policy is therefore to retain everything for ten years.

7. Director liability and the consequences of poor records

Failing to keep proper accounting records is not a victimless technicality. The consequences fall on the company and, importantly, on the directors personally.

Penalties under the Companies Act

Where a company fails to keep proper accounting records as required by Article 163, every officer of the company who is in default is liable to a penalty. Importantly, the Act provides a defence: an officer is not liable where they show that they acted diligently and that, in the circumstances in which the company's business was carried on, the default was excusable. Separately, late approval and late filing of financial statements under Article 182 attract escalating penalties - a penalty on default plus a further daily penalty for each day the default continues. These penalties accrue against the officers, not only the company.

Strike-off and director restriction

Persistent non-compliance has consequences beyond financial penalties. The Registrar may pursue involuntary strike-off of a company that remains in continual default, which results in loss of control over the company's assets. The Registrar also has the power to restrict a person from being appointed as a director or company secretary where they have repeatedly breached the provisions of the Act. Poor record-keeping that leads to chronic filing failures can therefore ultimately affect a director's ability to hold office.

Personal liability in insolvency

The most serious exposure arises in insolvency. Where a company is wound up and proper accounting records were not kept, the directors face heightened scrutiny. The absence of proper records makes it far harder for directors to demonstrate that they acted properly, monitored the company's financial position, and did not continue trading wrongfully. Proper, contemporaneous records are a director's primary protection if the company's conduct is later examined in an insolvency, tax investigation, regulatory inquiry or litigation.

The hidden cost: audit and resumption

Even short of penalties, poor records carry a direct financial cost. Where an audit is required, disorganised or incomplete records lengthen the audit, increase the audit fee, and raise the risk of a qualified or modified audit opinion. Where a company has been audit-exempt and subsequently needs an audit (because it has grown beyond the thresholds, or a lender requires one), the auditor must obtain comfort on opening balances and prior-period comparatives - a process that is materially harder, slower and more expensive where the underlying records are weak.

8. Common bookkeeping pitfalls

The following are the record-keeping failures we see most often in Maltese companies. Each is avoidable with a modest amount of discipline.

• Reconstructing records at year-end: assembling the books once a year for the auditor rather than maintaining them continuously. This breaches the "reasonable accuracy at any time" test and produces rushed, error-prone accounts.

• Missing supporting documentation: recording transactions without retaining the underlying invoices, receipts and contracts. The records must explain transactions, not merely record amounts; missing documentation undermines both the audit and the tax position.

• Mixing personal and company transactions: paying company expenses from personal accounts (or vice versa) without proper recording. This is especially common in owner-managed companies and creates director's current account complications and related-party disclosure issues.

• Untracked director and shareholder balances: failing to keep a clear running record of amounts owed to or by directors and shareholders. These balances have tax, disclosure and (on capitalisation) corporate-law consequences, and must be documented contemporaneously.

• Neglecting the corporate registers: keeping the accounting records but letting the register of members, register of debentures and minute books fall out of date. These are statutory records in their own right and must be maintained alongside the accounts.

• Wrong currency: keeping records in a currency other than the share capital currency, creating translation issues in the statutory accounts.

• Discarding records too early: disposing of records after four, five or six years on the assumption that a shorter tax, VAT or Commercial Code period governs, when the Companies Act requires ten years from the last entry.

• Offshore records with no Malta presence: centralising bookkeeping abroad without maintaining the six-monthly returns in Malta required by Article 163.

• Ignoring the first-period deadline: misjudging the first accounting period length or made-up date and missing the first approval and filing deadlines.

• Treating outsourcing as a transfer of responsibility: assuming that engaging an accountant discharges the directors' legal responsibility. It does not - the directors remain responsible for the records and the financial statements.

9. Frequently asked questions

What records must be kept at the registered office?

A company must keep its accounting records (general ledger, day books, cash and bank records, supporting documentation, asset and stock records) together with its corporate registers and minute books - specifically the register of members, the register of debentures, the minutes of general meetings, and the minutes of board meetings. The beneficial ownership register, the register of directors and secretary, and copies of filed returns and constitutional documents are also typically held there. The accounting records may be kept elsewhere if the directors so decide, but they must remain open to inspection by the officers at all times, and if held outside Malta the six-monthly Malta returns requirement applies.

How long must a Maltese company keep its accounting records?

A minimum of ten years under the Companies Act. Where the records are kept in a bound or unified form (including a continuous accounting system), the ten years run from the date of the last entry. Because this is longer than the nine-year income-tax period, the six-year VAT period, the five-year Commercial Code period and the four-year stamp-duty period, a ten-year retention policy satisfies every regime.

Can I keep my company's accounting records outside Malta?

Yes, the directors may decide to keep the records at a place outside Malta. However, the company must then maintain, at a place in Malta, accounts and returns sufficient to disclose the company's financial position with reasonable accuracy at intervals not exceeding six months and to enable the statutory accounts to be prepared. The records must also remain open to inspection by the company's officers at all times.

Are electronic or cloud-based records acceptable?

Yes. Maltese law does not prescribe a particular format. Electronic and cloud accounting systems are acceptable provided the records are complete, accurate, retrievable and capable of being produced for inspection. Where the data is hosted on servers outside Malta, consider whether the six-monthly Malta-based returns requirement is engaged.

Does keeping proper records mean I don't need an audit?

No - these are separate questions. Keeping proper accounting records is a universal obligation under Article 163 regardless of whether an audit is required. Whether an audit is required depends on the company's size and the Audit Exemption Rules (Legal Notice 139 of 2025). A company may be exempt from audit yet still must keep proper records; indeed, good records are even more important where there is no external audit providing a check.

What is the difference between accounting records and financial statements?

Accounting records are the underlying books - the ledgers, day books, cash records and supporting documentation that capture every transaction as it happens. Financial statements are the periodic summary - the balance sheet, profit and loss account and notes - prepared from those records at the year-end under GAPSME or IFRS. The records are the continuous input; the financial statements are the annual output. Article 163 governs the records; Articles 167 and 182 govern the statements.

Who is responsible for the accounting records - the accountant or the directors?

Legally, the directors. A company may (and most do) engage an accountant or bookkeeper to maintain the records and prepare the financial statements, but the statutory responsibility under the Companies Act rests with the directors and cannot be delegated away. Engaging a competent professional is good practice and reduces risk, but it does not transfer the legal responsibility.

In what currency must the records be kept?

In the same currency as the company's share capital. If the share capital is denominated in euro, the records and financial statements are in euro; if in another currency, the records follow that currency. This keeps the share capital, the records and the statutory accounts consistent.

What happens to the records when a company is wound up?

The retention obligation continues. The liquidator (or the person elected to hold the records) must preserve them for the remainder of the ten-year period. If that person dies, their heirs must deliver the records to the Registrar within six months, and the Registrar holds them for the remaining period. Record retention should be planned as part of any liquidation.

Can poor record-keeping make me personally liable?

It can increase your exposure significantly. Officers in default of the Article 163 obligation are liable to penalties, subject to the defence that they acted diligently and the default was excusable. More seriously, in an insolvency the absence of proper records makes it far harder for directors to demonstrate they acted properly and monitored the company's position, which can expose them to claims. Proper contemporaneous records are a director's best protection if the company is ever scrutinised.

How does record-keeping affect my audit cost?

Directly. Well-organised, complete and reconciled records allow an audit to proceed efficiently and keep the fee proportionate. Disorganised or incomplete records lengthen the audit, increase the fee, and raise the risk of a qualified opinion. Where a previously audit-exempt company needs its first audit, weak records make the opening-balance work much harder and more expensive.

Related guides from EGM Assurance

• Statutory Audit in Malta: 2026 Guide for SMEs

• Audit Preparation Checklist for Malta Companies

• GAPSME vs IFRS in Malta: Which Framework Applies

• Audit Exemption in Malta 2026: LN 139/2025 Complete Guide

• Becoming a Malta Company Director: Duties, Liability and Personal Exposure

• Corporate Filings and Beneficial Ownership in Malta

• Internal Controls for Maltese SMEs 2026

• Company Year-End in Malta 2026: The Full Cycle

Authoritative references

• Companies Act (Cap. 386) - Article 163 (accounting records), Article 164 (accounting periods), Article 167 (individual accounts), Article 182 (approval and filing)

• Income Tax Management Act (Cap. 372) - Article 19 (records and nine-year retention)

• Value Added Tax Act (Cap. 406) - record-keeping and six-year retention

• Commercial Code (Cap. 13) - trade books and five-year retention

• Duty on Documents and Transfers Act (Cap. 364) - four-year document retention

• Audit Exemption Rules (S.L. 372.33) - Legal Notice 139 of 2025

• Malta Business Registry - annual submissions and accounting obligations

Need help? EGM Assurance provides statutory audit services in Malta - partner-led, transparent, on time. Get a quote.

This article is prepared by EGM Assurance for general informational purposes and reflects the legal and regulatory position in Malta as at May 2026, including the Companies Act (Cap. 386), the Income Tax Management Act (Cap. 372), the VAT Act (Cap. 406), the Commercial Code (Cap. 13) and the Duty on Documents and Transfers Act (Cap. 364). It does not constitute legal, tax or accounting advice. Record-keeping obligations depend on the specific facts of each company. Always obtain specific advice from a qualified professional.