Intellectual Property Tax Benefits in Malta

Intellectual Property Tax Benefits in Malta

Intellectual Property on it’s own cannot be tax effective as it does not generate an income. However, by setting up a Royalty structure, you’re able to generate income from people using your IP.

Royalties are payments to creators and owners of Intellectual Property for the use of that specific piece property over a specific period of time.

Although this does bring up a problem. Tax. Therefore, to maximise your earnings, you need to ensure that you set up a sound structure to ensure you reduce your tax leakage.

Setting Up Royalty Structures

Malta has several tax-effective provisions related explicitly to Royalties. Therefore, this makes Malta an ideal jurisdiction to set up a royalty holding company or royalty structure. Our firm specialises in setting up tax-efficient structures to maximise our client’s future earnings.

  • A royalty structure can be set up as a standalone operation holding the IP rights
  • A royalty holding company in Malta can be set up within a more significant group structure to hold various Intellectual Property.

IP Tax Benefits on Royalties Derived From Qualifying Patents

A “qualifying patent” means a patent registered in Malta or elsewhere, and includes patents where the research, planning, processing, experimenting, testing, devising, designing, developing and similar activity leading to the invention was carried out outside Malta.

The Malta tax exemption applies where any person (individual or corporate) receives royalties or similar income, chargeable to tax, from:

  • Qualifying Patents (whether as active or passive income)
  • Copyrights
  • Trademarks

IP Tax Benefits for Royalties – No Withholding Taxes

You may benefit from protection against non-Maltese withholding tax payable on royalties qualifying under EU Interest and Royalties Directive. Malta does not charge any withholding taxes on royalty payments or dividend payments made by Maltese companies.

Check out the Maltese legislation on the Exemption on Royalties Derived from Patents – Click here

You may also be interested in:

IP Registration
Malta IP Legal Framework
Trademark Registration

Contact Us

Are you looking at the tax benefits on your Intellectual Property? Contact us today for a free consultation, and we can discuss the steps you can take to create a compliant structure for your Copyright, Trademark, Trade Secret or Patent.

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