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Holding & Trading Companies

The 6/7th Shareholders’ Tax Rebate System structure is adopted for a wide range of business operations and structures and involves the initial payment of 35% by the Trading company and a 6/7th refund of the 35% by the Malta tax department to the Holding company. This will result in a tax refund of 30% (from 35%) thus resulting into an effective tax rate in Malta of 5%.
The following is an illustrative example of its application. Assume that:
1. Profit before Tax - Eur100
2. Tax (at 35%) - Eur 35
Profit after Tax - Eur 65
3. Dividend - Eur 65
4. Tax refund - Eur 35
5. Dividend - Eur 95
6. Effective Tax - Eur 5

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