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Malta

Malta has one of the EU’s most comprehensive participation exemption regimes (a term generically used to refer to exemption from tax on dividends received from a subsidiary and on any capital gains earned on the sale of shareholdings), offering tax exemptions in Malta for dividends and capital gains related to a Participating Holding (PH).

A Maltese holding company (MaltaHoldCo) has a Participating Holding when it has a shareholding in the share capital of a company whose capital is represented by registered shares or equity holdings, does not own real estate in Malta, and meets at least one of the following conditions:

a) The shareholding has a 10% holding and a right to, at least, 10% of 2 of the following:

1. Voting rights

2. Right to profits available for distribution

3. Right to the assets available for distribution on liquidation; or

b) The shareholding has a value of, at least, € 1,164 M on purchase date and has been held for a continuous period of, at least, 183 days; or

c) Malta HoldCo detains an option to buy the entirety of the outstanding shares of the subsidiary; or

d) Malta HoldCo has powers to appoint one member of the board of directors of the subsidiary; or

e) Malta HoldCo has a right of first refusal in the case of sale, redemption or cancellation of the outstanding foreign company's shares; or

f) Malta HoldCo holds a shareholding for the development of its own business and not only as stock for resale purposes.

Only in the case of dividends does the non-resident company have to also meet at least one of the following anti-avoidance conditions:

a) to be resident or incorporated in the EU; or

b) to be subject to, at least, a 15% foreign tax rate; or

c) more than 50% of its income does not result from passive interest or royalties.

If none of these 3 conditions has been met, the following 2 conditions must be met cumulatively:

a) the holding by Malta HoldCo is not a portfolio investment and the non-resident participated company has not more than 50% of its income derived from portfolio investments; and 

b) the non-resident participated company or the respective passive interest and royalties have been subject to, at least, 5% foreign tax.

Relevant tax exemptions 

 

CONTACTS

Contact us to find out more about these advantages

 

Madeira
Tel.: +351 291 210 200               
Fax.: +351 291 210 209
info@newco.pro

Malta
Tel.: +356 21 223 120
Fax.: +356 21 223 119
info@newco.pro

Madrid
Tel.: +34 654 201 029
info@newco.pro

Lisboa
Tel.: +351 213 430 500
info@newco.pro

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