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Malta

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 (for the company and subsequently for the shareholder).

As the 35% tax rate applied to the company is equal to the maximum tax rate on individuals, paying out dividends does not lead to further taxation for shareholders.

The full imputation system and the tax refund system provide very efficient tax-planning opportunities.

In fact, a shareholder receiving profit dividends, allocated to the Malta Tax Account (MTA) and Foreign Income Account (FIA) , can request a tax refund on those profits paid by the company in Malta. The amount of the refund depends on the nature of the distributed profits and if these have benefited, or not, of any double taxation relief mechanisms.

 

In most cases, the tax refund to the shareholder is 6/7 of the tax paid by the company on profits distributed as dividends. The tax refund rate may be different in the following cases: 

Refunds are guaranteed by Law and are paid without delay by the Tax Authority within a short deadline, as of the date on which the refund is formally requested.

For the purposes of Maltese law, dividends include any profits distributed by the company to its shareholders and any amount credited to them as partners, including capital increases by incorporation of earnings and distributions to shareholders following the dissolution of the company, as long as distribution reflects earnings. Therefore, dividends do not actually have to be paid, i.e. the profits can be capitalised or merely credited to the shareholder.

Tax refund calculation

The tax refund is calculated using the tax paid by the company on profits included in the dividends to be distributed, before deducting the credit from the application of double taxation relief mechanisms (except for Flat Rate Foreign Tax Credit (FRFTC)).

Payments to non-residents

Dividends
Tax refund requests

 

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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