The short answer
Most limited companies in Malta still need their annual financial statements audited, although following recent changes the smallest companies no longer do, and some start-ups can skip it for tax purposes. If yours does, the single biggest driver of what the audit costs is not the auditor. It is the state of your books when the auditor arrives. Clean, reconciled records mean fewer hours, fewer questions and a lower bill. Messy records mean the auditor bills you for sorting them out first.
I worked as an audit associate before moving into accounting, so I have sat on the other side of the table. This guide covers what your auditor will ask for, what pushes the fee up, and the timeline from year-end to filing.
Please note: this article is for informational purposes only and is not legal, tax or audit advice. It was written in October 2026. Check your own deadlines with your accountant and auditor.
First: does your company still need an audit?
Until recently, the Income Tax Management Act required every company to submit audited accounts with its tax return. The Audit Exemption Rules, 2025 (Legal Notice 139 of 2025) changed that for two groups of companies:
Small companies
Within the Companies Act limits: turnover up to €93,000, balance sheet total up to €46,600, an average of 2 employees or fewer.
Accounting periods starting on or after 1 January 2025
- Within all three limits: no audit or review report needed.
- Meeting two of the three, but not all three: a review report instead of a full audit.
Start-ups
First two accounting periods, owned only by individuals with an MQF Level 3 qualification or higher, incorporated within 3 years of getting it, with turnover up to €80,000.
Accounting periods starting on or after 1 January 2024
- No auditor's report needed with the tax return.
- This is a tax waiver only: it doesn't by itself remove an audit required under the Companies Act.
- A start-up that chooses an audit anyway can deduct 120% of the audit fee from its taxable income, up to a €700 deduction per period.
A review report is a formal engagement carried out under the international review standard (ISRE 2400). The reviewer mainly asks questions and analyses the numbers rather than testing them in depth, so it gives less assurance than an audit and usually costs less.
Three things to keep in mind. First, the small-company relief looks at two consecutive years: the company should meet the conditions both this year and last year, so one year's figures aren't enough to decide. Second, the start-up relief ends if a new shareholder comes in who doesn't meet the conditions. Third, banks, investors and some suppliers may still ask for audited accounts, so being exempt doesn't always mean an audit is pointless.
If your company is above these limits, the rest of this guide is for you.
Who does what: you, your accountant and your auditor
Many business owners think the auditor "does the accounts". They don't. Three parties are involved, and mixing up their roles is where a lot of delays start.
| Who | What they do |
|---|---|
| You (the directors) | Responsible in law for keeping proper records and for the financial statements. You sign them. |
| Your accountant | Keeps the books, reconciles them and prepares the financial statements and the tax computation. |
| Your auditor | Independently checks the financial statements and gives an opinion on whether they show a true and fair view. |
The auditor checks your numbers; they are not there to produce them. If the books arrive incomplete, the auditor either sends them back or fixes them, and both cost you time and money.
The year-end checklist: what your auditor will ask for
This is the list I would hand any company director two months before year-end. Have these ready and the audit moves quickly.
Cash and bank
- Bank statements for every account (including dormant ones and foreign-currency accounts) covering the full year
- A bank reconciliation for each account at year-end, agreeing the books to the statement
- Loan and overdraft statements showing the balance and interest for the year
Sales and customers
- A list of customers who owed you money at year-end (an aged debtors list), with a note on anything you don't expect to collect
- Invoices issued just before and just after year-end, so the auditor can check sales are in the right year
Purchases and suppliers
- A list of suppliers you owed money to at year-end (an aged creditors list)
- Supplier statements for your main suppliers, agreed to your books
- Bills received after year-end for work done before it (accruals)
Stock and assets
- A stock count at year-end, signed by whoever counted it, with quantities and costs
- A fixed asset register: what you own, what you bought and sold during the year, with invoices for additions
Tax and payroll
- VAT returns for the year, reconciled to the sales and purchases in the books
- Payroll records, the FS5s for the year and the FS7 reconciled to the wages in the books
Company records
- Board minutes and shareholder resolutions for the year (dividends, loans, big decisions)
- New contracts, leases and loan agreements signed during the year
- Details of any amounts owed to or by directors and shareholders
If you can tick every box, you are ahead of most companies I have seen.
Five things that push your audit fee up
Auditors price on time. Anything that makes them spend more hours shows up on the bill, and often on next year's quote too.
- Bank accounts that don't reconcile. If the books and the bank statement don't agree, the auditor has to find out why before anything else can be checked. This is the most common cause of overruns I see.
- No stock count. Stock is usually one of the biggest numbers on the balance sheet. Without a proper count at year-end, the auditor has nothing reliable to test, and may have to qualify the opinion.
- Unexplained balances. Old suppliers you no longer owe, customers who will never pay, a "suspense" account nobody can explain. Each one is a question, and each question is time.
- Director and related-party transactions with no paperwork. Money moved between the company and its directors, or between group companies, needs a clear record and a board decision behind it.
- Late and piecemeal information. Sending documents in five batches over three months means the auditor picks the file up and puts it down five times. One complete pack, on time, is cheaper.
None of these are audit problems. They are bookkeeping problems that the audit exposes.
The timeline: from year-end to filing
For a private company, every deadline runs from the end of your financial year:
| When | What happens |
|---|---|
| The two months before year-end | Clean up the books, chase old balances, plan the stock count |
| Year-end | Close the year. Count the stock. |
| 1 to 3 months after year-end | Close the books, reconcile everything, prepare draft financial statements |
| 3 to 6 months after year-end | Audit fieldwork |
| Within 9 months of year-end | Company tax return filed with the audited financial statements, and any tax still due paid with it |
| Within 10 months of year-end | Shareholders approve the accounts at a general meeting |
| Within 42 days after that 10-month deadline | File the accounts with the Malta Business Registry |
If your financial year ends between January and June, the tax return is instead due by 31 March of the following year.
For a company with a December year-end, notice the order: the tax return is due before the accounts deadline at the Registry. In practice, your audit needs to be finished within about nine months of year-end. Companies that plan around the Registry deadline end up rushing the tax return.
Frequently asked questions
Does every company in Malta need an audit?
Not any more. Since the Audit Exemption Rules, 2025, small companies within the Companies Act limits (turnover up to €93,000, balance sheet up to €46,600, 2 employees or fewer) can be exempt or need only a review report. Qualifying start-ups don't need an auditor's report with their first two tax returns, although the Companies Act may still require an audit. Most trading companies above those limits still need a full audit.
How much does an audit cost in Malta?
It depends on the size of the company and, above all, on the state of the books. A well-prepared small company costs far less to audit than the same company with unreconciled accounts, because the auditor charges for time.
Can my auditor also keep my books?
Auditors must stay independent of the numbers they are checking, so many firms keep these roles separate or limit what they do. Having your books kept by a separate accountant keeps the lines clear and lets the auditor focus on auditing.
When should I start preparing for the audit?
About two months before year-end. A stock count can't be done after the fact, and old balances are easier to clear while people still remember them.
What happens if I miss the filing deadline?
The Malta Business Registry charges penalties for late filing, and they grow the longer the delay. Late tax returns also attract penalties and interest from the MTCA.
Make this year's audit the easy one. Monthly bookkeeping for a company starts from €250. Estimate your own fee in a minute. New client offers are available.
Important. This article is for informational purposes only and does not constitute legal, tax or audit advice. It was written in October 2026, using the rules in force at the time. Every company is different, so speak to your accountant and auditor before acting on it.
Sources: MTCA: Audit Exemption Rules, guidelines · MIA: Guidance note on audit exemption (2026) · BDO Malta: Audit Exemption Rules 2025 · Mondaq: Malta Audit Exemption Rules 2025 · ACT: the pros and cons · PwC Malta: accounting compliance deadlines · MTCA: Corporate income tax · PwC Tax Summaries: Malta, tax administration