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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