Other Malta Tax Benefits

Malta’s tax system is designed to attract investors, businesses and High Net Worth Individuals. Some of these beneficial tax treatments include:

  • Malta Residency Programmes for Individuals

  • Tax Refunds for Businesses

  • Participation Exemption

  • Superyacht VAT Registration

  • Double Taxation Relief

    However, there are other tax benefits offered to make you more tax effective.

  • No Outbound Withholding Taxes

    Withholding tax is when a tax deducted at source, especially one levied by some countries on interest or dividends paid to a person resident outside that country. For example, Royalties.

    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.

    Please note that there are statutory conditions to be complied with, contact our team for information.

    Group Taxation Provisions

    Two companies that, for tax purposes, are resident exclusively in Malta, where one company has over 50% control over the subsidiary. Alternately, both companies have over 50% control of a third Malta-resident company, qualify as members of a group of companies.

    Therefore, where assets (including shares, other securities and immovable property) are transferred between companies being members of the same group is deemed that no loss or gain has arisen from the transfer.

    Maltese resident companies being members of the same group of companies may surrender and claim tax losses between them.

    Payment of Tax and Refunds

    A company pays tax in the currency in which it’s share capital is denominated. Furthermore, any tax refunds are made in the same currency.

    For companies with more than 90% of business interests outside Malta, tax is payable on the earlier of the date of distribution of profits. Alternately, eighteen months after the end of the relevant accounting period of the company.

    Refunds are issued no later than fourteen days after tax has been paid and a valid claim for the refund is submitted.

    Taxation Delays for International Businesses

    Maltese companies require an annual audit, and the accounts must be IFRS (International Financial Reporting Standards) compliant. For companies with more than 90% of business interests outside Malta, accounts may be laid before the company in a general meeting up to eighteen months after the end of the relevant accounting period of the company.

    Advance Revenue Rulings

    The International Tax Unit within the Inland Revenue Department deals with all international tax matters. Furthermore, they provide advanced rulings in areas where there might otherwise be uncertainty or fear of infringing Maltese legislation.

    Therefore, fiscal implications of investing in or through Malta or of any particular international transaction must be clear ahead of time.

    Rulings are available to confirm the tax position issues such as:

  • the position regarding general anti-avoidance provisions

  • whether a shareholding is in the course or furtherance of the shareholder’s business for a participating holding

  • the tax treatment of any particular financial instrument

  • the tax treatment of any transaction which involves international business

    The rulings guarantee the tax position for five years, and companies can renew this for a further five-year period. They will also withstand any changes in legislation for two years after the introduction of the new law.

  • Need more help?

    If you want more information on the beneficial tax system in Malta or you want to speak with our tax advisory team directly, contact us today using the form below to arrange a consultation.

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