How expats in Spain can take advantage of the Malta tax system

If you’re an expat in Spain, you may be wondering how you can take advantage of the Malta tax system. There are several excellent tax incentives available to businesses and individuals, making Malta an ideal jurisdiction for anyone looking to maximise their tax efficiency. Some of the key benefits of the Maltese tax system include a low effective corporate tax rate, a wide range of double taxation treaties, and several attractive personal income tax programmes and reliefs. If you’re searching for tax efficiency, Malta is definitely worth considering.

Tax in Malta

Malta is an ideal jurisdiction for businesses and individuals from Spain seeking excellent tax incentives. Based within the EU, Malta offers many benefits for holding companies and trading operations, making it an attractive destination for investors, entrepreneurs and high net worth individuals.

Corporate Tax

The Malta corporate tax system is designed to attract businesses by offering a reduced effective rate of 5%. This is achieved through a tax refund programme to shareholders for eligible companies subject to certain conditions being satisfied. Companies incorporated or managed and controlled in Malta are subject to a worldwide corporate tax rate of 35%, but through Malta’s tax laws, this rate can be significantly reduced. In addition, there are many other tax benefits that make the Maltese tax system an attractive option for businesses looking for low taxes abroad.

Malta is an excellent jurisdiction for businesses and entrepreneurs seeking alternative options with beneficial tax rates. EU standards regulate the Malta tax system, making it a safe and compliant jurisdiction. The Full Imputation System in place allows for company profits to be taxed at the source, but dividends distributed to shareholders are not taxed again. This creates a more efficient system than the classical system of taxation. The Malta tax refund system enables shareholders of a company registered in Malta to claim up to a 6/7th tax refund of tax paid in Malta. Therefore, by setting up trading companies in Malta, you can reduce your overall tax burden to an effective tax rate of 5%. Companies in Malta that are involved in more passive forms of income, such as interest or royalties, would benefit from a slightly higher overall effective tax rate of just over 10%.

Another option is forming a holding company in Malta. A Malta holding company is the perfect way to consolidate your subsidiary companies and take advantage of fantastic international tax benefits. A holding company offers protection for both business and personal assets, including real estate holdings, shares in companies, intellectual property, and many more. Malta benefits from a full participation exemption tax regime which can see capital gains on disposals of shares and dividends received from those shares exempt from taxation in Malta subject to certain conditions, making it an ideal EU country to set up a holding company.

Income Tax

Income tax in Malta is a progressive tax rate. The more income you earn, the more tax you pay. There are also various tax residence programmes available for individuals and expats in Malta.

Both the Global Residence Programme and The Residence Programme offer special tax status by setting an individual’s tax rate on income remitted to Malta at 15% (conditions apply). The Malta Retirement Programme sets tax rates on pension income remitted to Malta at 15% (conditions apply).

Overview of residency services

If you’re looking to make a move to Malta for professional or personal reasons, Papilio Services can help. We have years of experience assisting individuals and families from across the world take up residence in Malta. There are a variety of residence programmes to choose from, and we can help you make the right decision to suit your individual needs. Whether you’re looking for a change of pace or wanting to take advantage of Malta’s many financial and lifestyle benefits, we can help make your dream a reality.

Contact us if you have questions about other residency programmes, and we will arrange a residency planning consultation to advise on the residency requirements and guide you through the application process and answer any questions you have.