Effective from 20 March 2026, revised group consolidation thresholds under the Maltese Companies Act (Cap. 386) apply when classifying groups as small, medium-sized, or large. These higher thresholds could change your group’s classification, the financial reporting framework you use, and whether you can claim an exemption from preparing consolidated financial statements.
What changed?
Your group qualifies as a small group and is exempt from preparing consolidated financial statements if, at its balance sheet date, the undertakings to be consolidated don’t exceed at least two of the three criteria of the revised thresholds below.
| Previous thresholds | Revised thresholds | |
| Aggregate balance sheet total | €4,000,000 net/ €4,800,000 gross |
€5,000,000 net/ €6,000,000 gross |
| Aggregate net turnover | €8,000,000 net/ €9,600,000 gross |
€10,000,000 net/ €12,000,000 gross |
| Aggregate average number of employees | 50 employees | 50 employees |
What if the small group thresholds are exceeded?
Medium-sized groups are groups that do not qualify as small groups and do not exceed at least two of the below thresholds. Large groups are groups that exceed at least two of the relevant size criteria detailed below on a consolidated basis.
See how the previous and revised thresholds compare:
| Previous thresholds | Revised thresholds | |
| Aggregate balance sheet total | €20,000,000 net/ €24,000,000 gross |
€25,000,000 net/ €30,000,000 gross |
| Aggregate net turnover | €40,000,000 net/ €48,000,000 gross |
€50,000,000 net/ €60,000,000 gross |
| Aggregate average number of employees | 250 employees | 250 employees |
Before you conclude that consolidation is no longer required, pause and ask:
How do you assess the exemption?
The two consecutive accounting periods rule
Articles 185(3) and 185(6) set out a two consecutive accounting period test. If your group exceeds, or stops exceeding the relevant thresholds, its classification generally won’t change straight away. The position must continue for two consecutive accounting periods before the new classification takes effect.
An important exception applies at the first balance sheet date of a newly established group. Since Article 185(3) expressly excludes a first balance sheet date from the operation of the rule, the group must be assessed solely on the basis of the thresholds applicable at its first balance sheet date.
Intermediate parent company exemption
Article 174 provides an exemption from the requirement to prepare consolidated financial statements for a parent company that is itself a subsidiary and is included in consolidated financial statements prepared at a higher level.
The exemption may apply where the intermediate parent is wholly owned by its parent or, where it is not wholly owned, subject to the applicable requirements concerning minority shareholders.
The exemption is subject to the conditions prescribed by Article 174. These include the inclusion of the exempt company in the higher-level consolidated financial statements and the appropriate disclosure of the exemption, including details of the higher-level parent, in the exempt company's individual financial statements. The relevant higher-level consolidated financial statements and directors' report are also subject to filing requirements with the Malta Business Registry.
Preparing consolidated financial statements?
Focus on these key areas.
| Group structure and control assessment | Accounting policies | Financial year end |
| Foreign currency matters | Intra-group balances and transactions | Unrealised profits |
| Acquisition accounting | Goodwill | Non-controlling interests |
How can we help?
We can help you assess the impact of the revised thresholds and determine which exemptions may be applicable. If your group falls outside the small group thresholds, we can help with the preparation of consolidation workings and consolidated financial statements. Ready to understand what the changes mean for your group? Contact our sector leaders below.
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