Malta Tax Refund System

Shareholders of Maltese companies are entitled to claim refunds of tax paid in Malta by the company on income allocated to the Foreign Income Account (FIA) and Maltese Taxed Account (MTA) when such income is distributed as a dividend.

Shareholders of Maltese companies can claim refunds of tax paid when such income gets issued as a dividend. Organisations are only eligible for this if profits have been subject to tax in Malta at the standard rate of 35%.

If you’re considering Malta Company Formation to benefit from the tax refund system, contact us today for a consultation.

6/7 Malta Tax refund

Shareholders are typically entitled to claim a refund of 6/7 of the tax charged to the Maltese trading company. Therefore, this makes the effective tax rate of 5%.

5/7 Malta Tax refund

Where the income of the business is made up of passive interest and royalties, the shareholders may claim a 5/7th refund of the tax charged to the Maltese company. Therefore, this makes the effective tax rate of 10%.

Where interest and royalties have been subject to foreign tax at a rate of 5% or more, it will automatically no longer be considered passive, and therefore qualify for the 6/7th refund.

2/3 Malta Tax refund

Where passive income and royalties have been subject to a claim for double taxation relief, including the FRFTC (Flat Rate Foreign Tax Credit), a 2/3rd refund of the Malta tax charged may be applicable.

100% Malta Tax refund

Participation Exemption is an exemption from taxation for the shareholder in a company on dividends received, and potential capital gains arising on the sale of shares. However, this occurs when a Maltese company holds shares in another entity (qualifying as a Participating Holding).

When the revenue is made up of income and gains from participating holdings, and the participation exemption has not been applied, the shareholders may qualify for a full refund of Malta tax paid.

Need more help?

If you need a more in-depth discussion around the Malta Tax Refund System, contact us and we will arrange a consultation to discuss your situation.

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