5/7 Malta Tax refund on Passive Interest
Passive interest is where the income of the business is made up of passive interest and royalties. Therefore 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%.
This effectively reduces your tax leakage on passive income by a massive 25%.
However, 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.