Taxation

The fiscal situation in Malta is extremely beneficial for companies with foreign beneficial interest. Substantial fiscal benefits can be obtained through the system of tax credits.

Corporate Tax: Corporate tax applicable in Malta is 35%. However, several credits and refunds are applicable to foreign shareholders. In 2007 the Maltese fiscal legislation changed merging the International Trading Company (ITC) and International Holding Company (IHC) regime into local companies. Presently shareholders who are not resident in Malta benefit from a substantial refund of the tax paid by the company, whereby on distribution of dividends to non-resident shareholders for profits not arising in Malta, such shareholders have the right to claim certain refunds amounting in aggregate to 30% of the 35% tax paid by the company. This means that in certain cases the effective rate of tax of 5% on profit is applicable. The ITC and IHC regime applicable to qualifying companies pre 2007 shall remain as such up till 2010. These companies enjoy the choice of which regime to adopt till 2010.

Taxation on reinvested profits: In certain cases tax on reinvested profits is reduced from 35% to 19.25%.

Double Taxation Treaties: Malta has double taxation agreements with the following countries: Albania, Australia, Austria, Barbados, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Hungary, Iceland, India, Italy, Korea (Rep. Of), Kuwait, Latvia, Lebanon, Libya, Lithuania, Luxembourg, Malaysia, Morocco, Netherlands, Norway, Pakistan, Poland, Portugal, Romania, San Marino, Slovakia, Slovenia, South Africa, Sweden, Syria, Tunisia and the United Kingdom.

Other Treaties are currently being negotiated or have been signed and require ratification.