International Tax Services In Malta

Companies setting up, operating, transferring and closing a business have both direct and indirect tax consequences. However, setting up a company in Malta means you benefit from several tax effective systems such as the Full Imputation System and Participating Exemption that allow businesses to plan their taxes more effectively.

Malta as part of the EU abides by EU Directives related to international taxation such as the EU Parent Subsidiary Directive and the EU Interest and Royalties Directive which seek to eliminate double taxation between certain transactions between two EU member states.

The EU Parent Subsidiary Directive allows for the elimination of double taxation on dividends paid from an EU Subsidiary company to an EU parent in separate EU member states by offering a credit on the tax paid in one state or exempting the income in its entirety from taxation in the receiving state.

The EU Interest and Royalties Directive seeks to achieve the same objective with regards payments of interest and royalties from one EU member state to beneficial owners situated in another EU member state.

DAC 6 is an EU Directive that was introduced in 2018 in relation to automatic exchange of information and disclosure of reportable cross border arrangements with regards international taxation to tax authorities across EU member states. The main objective of DAC 6 is to increase transparency, reduce ambiguity over beneficial ownership and to discourage intermediaries from designing, marketing and implementing harmful tax schemes. It is therefore important to identify transactions that fall within the scope of DAC6 so that you are able to fulfil reporting requirements.

Malta is well connected and to date has over 80 double taxation treaties in place which allow for the elimination of double taxation and outline which jurisdiction has the right to tax. The majority of double taxation treaties Malta has in place follow the OECD model which give certain guidelines for international taxation and the right to tax. However, it is good to note that some international taxation treaties Malta has in place do not follow the OECD model. Malta has double taxation treaties in place with major business economies such as the USA, UK, Canada, Australia and the majority of the EU countries which allow for a myriad of international taxation opportunities in Malta.

Papilio and its associated companies are licensed by the Malta Financial Services Authority. This registration by the MFSA includes the ability to:

• Receive and hold property under a Trust;
• Act as Trustees;
• Act as Administrators of Private Foundations;
• Provide other Fiduciary Services.

The Maltese Inland Revenue Department designates us as an Authorised Registered Mandatory in connection with the Maltese Tax and Residency Programmes.

Identity Malta licenses Thomas Jacobsen (Managing Director of Papilio Services) as an Accredited Person in connection with the numerous Maltese Residence Programmes.