Whether for tax planning, succession planning, or other asset protection purposes, trusts are increasingly in demand in many respects.
As an alternative to Trusts, Malta offers the possibility of creating Foundations. Foundations have the advantage of having legal personality. Learn more here.
Income Tax is governed by the Income Tax Act (ITA), the Income Tax Management Act and subsidiary legislation. This tax is levied on income and some specific kinds of capital gains for natural and legal persons.
Malta offers an extremely competitive tax regime, based on a full imputation system, in which tax on profits paid by the company distributing dividends is made available to the shareholder as a tax credit, to avoid double taxation on the same income.
Maltese groups of companies can opt for consolidated taxation and be treated as a single fiscal unit.
Malta has one of the EU’s most comprehensive participation exemption regimes (a term used to refer to exemption from tax on dividends received from a subsidiary and on any capital gains earned on the sale of shareholdings).
Maltese residents, who comply with certain requirements, can have double taxation relief on the income that has already been taxed abroad.
Malta has a vast network of double taxation treaties which offer competitive conditions, and other treaties are currently being negotiated/signed/ratified.
The ITA makes provision for a number of exemptions. These are the most Relevant tax exemptions for companies in Malta.
The dividends certificate does not have to be delivered at the time of payment of the dividends pertaining to profits generated during the accounting period in which the dividends are paid.
Get to know the listing of anti-abuse and autonomous taxation rules for companies based in Malta.
Safety and certainty are essential aspects when structuring international investments. In order to meet investors’ needs, it is possible to ask the Maltese tax authorities to issue an advance tax ruling that is valid for 5 years.
In principle, the settlor may be taxed even if he or she does not receive any amounts upon transferring his or her property to the trust. The placement of property in a trust shall not create a more heavily taxed regime than that which would be applicable to any other transfer.
The legislation that applies to Stamp Duty (SD) in Malta is the Duty on Documents and Transfers Act” (DDTA). As you can see below, with the proper planning, this tax does not apply to many situations due to the various exemptions provided for by law.
VAT first came out in 1995 and on 1 May 2004, the Maltese system was fully adapted and harmonized with EU legislation. VAT is payable on the import of goods, intracommunity transactions, sale of goods and supply of services in exchange for a fee.
Taxation in Malta for individuals with residence and domicile in Malta applies to worldwide income. In the case of persons which are either resident or domiciled in Malta, taxation focuses only over income obtained in Malta or remitted to Malta and on capital gains obtained in Malta.
Maltese workers’ Social Security contributions are paid by the employer and the employee, each paying 10% on the respective wages.
Non-resident companies may benefit from tax exemptions or exemptions of other taxes on dividends, interest, royalties, capital gains, long term insurance policies and other investment income. Learn more about the Payments to Non-Residents.
Deducting expenses is particularly important in Malta, since the application of the tax refund to shareholders implies the distribution of company taxed profits.
According to Maltese tax legislation, a company registered in Malta must allocate its distributable profits to five (5) different tax accounts, depending on the source of the respective incomes. Learn more about the Tax Accounts in Malta.
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Malta
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