Tax

Why are ETFs taxed differently from shares in Malta?

The exemption that makes listed share gains tax-free contains one clause that changes everything: it applies to securities «not being securities in a collective investment scheme». An ETF is a collective investment scheme. So the exemption does not reach it. What happens instead depends on how you get out: redeeming units back to the fund is investment income with a 15 % final withholding tax, while selling a foreign ETF on the market falls under the ordinary rules and is taxed progressively, up to 35 %.

Tax is national. This page describes the rules in Malta (2026). If you live and pay tax in another country, the rules are different — see the flags below. This page has not yet been reviewed by a Maltese tax practitioner.

Two ways out of the same fund

This is the part that catches people, because from inside a broker app both look like pressing sell.

Redemption. You hand the units back to the fund and it pays you out. That is investment income, and the tax is a final withholding of 15 %. Final means it is done — it does not get added to your other income.
Sale on the market. You sell a foreign ETF to another buyer through the exchange. The listed-share exemption does not apply, so the gain goes under the ordinary rules and is taxed at your progressive rate, up to 35 %.

Same fund, same profit, different route out, different bill.

The worked example

Two positions, side by side in the same portfolio, both bought for €20,000 and both sold for €26,000. Gain on each: €6,000.

Listed share, sold on the exchange: tax €0. You keep €6,000.
ETF units redeemed back to the fund: 15 % final withholding — €900. You keep €5,100.
Foreign ETF sold on the market, at the top progressive rate: up to €2,100. You keep €3,900 or more, depending on your rate.

€0, €900 or up to €2,100 on exactly the same €6,000. On the screen, all three were one tap.

Why it is so easy to miss

An ETF trades on an exchange, has a ticker, has a live price and sits in the same list as your shares. Everything about the surface says «share». The law is not looking at the surface — it is looking at what the security legally is, and a fund is a collective investment scheme whether or not it is listed.

Stamp duty, at least, is on your side here: it does not apply to fund units.

Fund taxation in Malta has more layers than these three lines, and some funds sit in special regimes. If a lot of money turns on the answer, that is the point to ask someone who does this for a living.

Kiggo says: Two lines on the same screen, the same €6,000 profit — and the tax is €0 for one of them. The difference is not in what you did, it is in what you owned.

The typical beginner's mistake

Assuming the 0 % on listed shares covers your ETF because it trades on an exchange. It does not — the exemption excludes securities in a collective investment scheme, and the gain can be taxed at up to 35 %.

How you see it in Kiggo

Kiggo shows shares and ETFs the same way, because on the market they behave the same way. Tax is where they part company — and Kiggo does not calculate it. If you hold both, it is worth knowing which line is which.

Frequently asked questions

Is an ETF really a collective investment scheme?

Yes — that is what a fund is, listed or not. The exemption for listed shares is written to exclude exactly that.

Is the 15 % final?

On a redemption treated as investment income, yes — final withholding means it does not get added to your other income. Selling on the market instead is a different route with a different answer.

Does stamp duty apply to fund units?

No. Stamp duty does not apply to fund units, and it does not apply to foreign securities traded through a licensed local broker.

Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated 2026-09-18.

Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.