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. In all other cases, payments to non-residents of income taxable in Malta shall be subject to a 35% income tax rate if the non-resident is a company, or 25% for all other cases.
The responsibility for withholding tax lies with the entity paying the income.
If the entity paying the income is unable to determine whether the income is subject to taxation in Malta, it can ask the Commissioner for Revenue to rule on this, and he may authorize a lower or zero tax rate.
The amount to be deducted shall be paid to the Commissioner for Revenue within a period of 30 days. Failure to comply with this rule shall result in heavy fines, including the obligation to pay the amount of the taxes not deducted at source, in addition to twice this amount.
Withheld tax is not final and any taxes owed by the non-resident must be paid on the date on which income tax return has been filed.
If a non-resident declares his income in an income statement, the tax paid shall be considered a credit, and any excess credit may be refunded.