Tax optimisation is crucial to remain compliant whilst benefiting from available incentives.
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Malta is a very competitive EU country for tax planning and corporate tax structuring. A company incorporated in Malta is considered to be resident and domiciled in Malta. A company incorporated outside Malta is considered to be resident in Malta only if the management and control of its business is exercised in Malta. The standard rate of Malta tax on income and chargeable gains is 35%. However Malta is the only EU member state adopting the full imputation tax system and consequently, upon receipt of a dividend, shareholders of a Malta company may claim a refund of all or part of the Malta tax paid at the level of the company. In order to determine the amount of refund which one may claim, the type and source of the income received by the company must be considered. Full refund (0% Tax) - A full refund of the tax paid by the company may be claimed by shareholders in respect of: • income or gains derived from a Participating Holding; or • dividend income, where Participating Holding satisfies the anti-abuse provisions. Refund of 6/7th (5% effective Tax) - This is the most applied and used method of corporate tax refund. In cases of dividends from trading income, shareholders are entitled to claim a refund of 6/7ths of the Malta tax paid by the company. Thus, shareholders will benefit from an effective rate of Malta tax of 5%. Refund of 5/7th (10% Effective tax) - when: • income received is passive interest or royalties; or • income is from a participating holding which does not satisfy the anti-abuse provisions. Refund of 2/3rds (11.7% Effective tax) - Shareholders who claim double taxation relief in respect of any foreign income received by a Malta company are limited to a 2/3 refund of the Malta tax paid. Fiduscorp provides the following services: 1. Corporate tax 2. Personal tax 3. International tax 4. VAT