Taxation in Malta

Creation of trusts

Whether for tax planning, succession planning, or other asset protection purposes, trusts are increasingly in demand in many respects.

Set up of foundations

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

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.

Tax refund system

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.

Consolidated Group Income Tax

Maltese groups of companies can opt for consolidated taxation and be treated as a single fiscal unit.

Participation Exemption - Malta

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).

Double tax relief mechanisms

Maltese residents, who comply with certain requirements, can have double taxation relief on the income that has already been taxed abroad.

Double Taxation Treaties

Malta has a vast network of double taxation treaties which offer competitive conditions, and other treaties are currently being negotiated/signed/ratified. 

Relevant tax exemptions for companies in Malta

The ITA makes provision for a number of exemptions. These are the most Relevant tax exemptions for companies in Malta.

Distribution of dividends 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.

Anti avoidance rules in Malta

Get to know the listing of anti-abuse and autonomous taxation rules for companies based in Malta.

Rulings 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.

Trusts tax regime

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.

Duty on Documents and Transfers in Malta

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 – Value Added Tax in Malta

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.

Personal income taxation in Malta

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.

Social Security in Malta

Maltese workers’ Social Security contributions are paid by the employer and the employee, each paying 10% on the respective wages.

Payments to non-residents in Malta

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.

Deductible expenses in Malta

Deducting expenses is particularly important in Malta, since the application of the tax refund to shareholders implies the distribution of company taxed profits.

Tax Accounts in Malta

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.