Other Malta Tax Benefits
No outbound withholding taxes
No Maltese withholding tax is imposed on dividends distributed to non-residents. No tax is imposed on interest and royalties derived by non-residents as long as the statutory conditions are complied with, particularly that the relevant income is not effectively connected with a permanent establishment through which the non-resident carried on business in Malta.
No Maltese tax is imposed on gains realised inter alia from transfers of corporate securities by non-residents as long as the statutory conditions are complied with, particularly that the assets of the company whose securities are being transferred do not consist of Maltese immovable property.
Group taxation provisions
Where assets (including shares, other securities and immovable property) are transferred between companies being members of the same group, or companies controlled and beneficially owned directly or indirectly to the extent of more than 50% by the same shareholders, it shall be 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. Such losses may only be surrendered by a company in the year in which they are incurred, but may be utilised by the claiming company in the same year, or carried forward against future profits.
Payment of tax and refunds
A company is assessed and pays tax in the currency in which its share capital is denominated. All or any refunds of tax 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 or eighteen months after the end of the relevant accounting period of the company.
The tax legislation binds the Revenue to issue refunds not later than fourteen days after tax has been paid and a valid claim for the refund is submitted.
Other tax benefits in Malta
Maltese companies require an annual audit, and the accounts must be IFRS compliant. For companies with more than 90% of business interests outside Malta, such accounts may be laid before the company in 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 and provides advance rulings in areas where there might otherwise be uncertainty or fear of infringing Maltese legislation.
In this way, the fiscal implications of investing in or through Malta, or of Malta company set up, or of any particular international transaction may be made clear up front.
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 the purposes of 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 a period of five years and may be renewed for a further five-year period. They will also survive any changes of legislation for a period of two years after the entry into force of such new law.
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