Malta’s Tax Refund System
Shareholders are typically entitled to claim a refund of 6/7th of the tax charged to the Maltese trading company. Therefore, this makes the effective tax rate of 5%.
Malta’s Participation Exemption
Participation Exemption is an exemption from taxation for a shareholder on dividends received, and potential capital gains arising on the sale of shares.
Full Imputation System
Company profits are taxed at source, but dividends distributed to shareholders are not be taxed again.
This system is different from the classical system, whereby company profits are subject to tax and shareholders are taxed on dividends.
EU Parent-Subsidiary Directive
This directive has the aim to eliminate double taxation on profit distributions between associated companies in the various EU Member States.
No Withholding Taxes
In Malta, there is no withholding tax imposed on:
- Dividends distributed to Non-Maltese residents.
- Interest and royalties derived by Non-Maltese residents.
- Gains realised from transfers of corporate securities by non-residents.