When a company resident in Malta pays a dividend, it is obliged to issue a dividend certificate to its shareholders. This certificate must include:

  • The gross taxable amount of the distributed profits;
  • The tax account from which such dividend was paid;
  • The total tax payable by the company on the distributed dividends, with a breakdown of:
    • Tax payable in Malta after elimination of double taxation;
    • Tax payable abroad after elimination of double taxation;
  • Net amount of the dividend paid;
  • If elimination of double taxation on distributed profits is requested, indication of the income tax rate in Malta;
  • Income tax paid at source, if applicable;
  • Analysis of the profits that correspond to payment of the dividend, with indication of the year in which such profits were taxed.

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, but must be submitted as soon as possible after the end of the accounting period in which such dividends are paid. Regardless of the circumstances, the last date for submission of the certificate is the date for submission of tax returns for the year corresponding to the accounting period.

Early distribution of dividends

It is possible to distribute dividends in advance or make advance payments of profits earned by a Maltese company.

However, directors and administrators are responsible for ensuring that this distribution ensues from distributable profits and that there are sufficient funds to cover expenses, taxes and other outlay.

At year end, if an excess amount of profits has been distributed in advance, the directors and administrators shall be obliged to obtain the excess amount distributed from the shareholders. If the shareholders agree, excess amounts can be considered a loan made to the shareholder.