FAQ

FAQ: Corporate Taxation in Malta

Our Frequently Asked Questions (FAQ) provide you with information about corporate taxation in Malta.

FAQ: Corporate Taxation
I would like to set up a company in Malta, what is the standard corporate tax rate?

The standard corporate tax rate in Malta is 35%, which is applied on the income of the company after allowing for any deductible expenses and non-taxable income.

For more information about taxation of companies in Malta, do not hesitate to contact Elaine Camilleri, the firm’s tax partner, on [email protected].

If I set up a company in Malta, is it automatically deemed to be tax resident in Malta?

Yes, a company is deemed to be resident in Malta for tax purposes if it is incorporated in Malta.  Companies which are incorporated outside Malta but are effectively managed and controlled from Malta are also considered to be tax resident in Malta.

For more information about how a company’s management and control can be effectively exercised in Malta, do not hesitate to contact Elaine Camilleri, the firm’s tax partner, on [email protected].

If my Maltese company receives foreign income that is subject to tax outside Malta, will it be entitled to claim relief for foreign tax?

Yes, Malta offers various forms of double taxation relief. The most common being the treaty relief which emanates from the extensive treaty network which Malta has with over 70 countries. The relief is given in the form of a credit whereas the foreign tax suffered is set-off against the Maltese tax liability.

For more information on the various forms of double taxation relief, kindly visit our factsheet on Taxation of Malta Companies by clicking here.

Is there a possibility for this corporate tax rate to be reduced?

Yes, by means of the refundable tax credit system which Malta has to offer, whereby non-resident shareholders are allowed to claim a refund of 6/7ths (in certain circumstances 5/7ths or 2/3rds) of the tax paid by the company upon the distribution of a dividend. This reduces the effective tax rate to 5%.

For more information about the refundable tax credit system, kindly visit our factsheet on Taxation of Malta Companies by clicking here.

I have heard that Malta operates a Full Imputation System. What does it mean and how may I benefit from this if I set up a company in Malta?

Yes, it is a system whereby the shareholders of a Malta company will be entitled to a tax credit equivalent to the tax paid by the company, upon a distribution of profits. The highest rate of tax applicable to individual shareholders is 35% (equivalent to the corporate rate of tax), meaning that no further tax will be paid by the shareholders on distribution of profits by the company.

For more information on this system, do not hesitate to contact Elaine Camilleri, the firm’s tax partner, on [email protected].

Is my Maltese company required to withhold any tax upon the payment of dividends to me as shareholder?

Under Maltese tax law, a Maltese company is not required to withhold any tax on the payment of dividends to you as the shareholder, irrespective of your residence, domicile, and nationality.

For more information about the taxation of dividend income, do not hesitate to contact Elaine Camilleri, the firm’s tax partner, on [email protected].

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Corporate Taxation in Malta

Maltese companies are subject to tax at the rate of 35% on their worldwide income and capital gains. Malta grants various fiscal incentives to both companies and their shareholders upon the distribution of a dividend.

Setting up a Company in Malta

Setting up a company in Malta is a relatively straight forward procedure and can be set up within 2 working days, provided we are in receipt of all the information, funds and due diligence documentation we need.

Taking up Residence in Malta

Warm climate, friendly people, excellent communication infrastructures, low criminality and many other features of the Maltese islands have made Malta an excellent destination for people to take up residence in.

Remote Gaming in Malta

Malta was the first EU Member State to specifically regulate the remote gaming industry in 2004 and has ever since established itself as one of the prime jurisdictions for remote gaming operators. The Malta Gaming Authority (“MGA”) is the regulatory of gaming in Malta.

Payment Institutions in Malta

Malta has become a destination of choice for the setting up of Payment Institutions (also referred to as Payment Services Providers or PSPs). A number of advantages have contributed to this success, e.g. fiscal incentives granted.

Electronic Money Institutions in Malta

Malta has recently seen an increase in the number of Electronic Money Institutions (EMIs) looking to set up their operations in Malta. This has been largely due to the growth in the e-commerce and the i-gaming industries.

Initial Coin Offering (ICO) Services in Malta

Malta has always been on the forefront of technology and innovation. A number of initiatives have been launched, aimed at establishing an innovative and attractive regulatory framework for entities operating in the blockchain industry.

Prospects – Services of a Corporate Advisor in Malta

‘Prospects’ is a new platform set up by the Malta Stock Exchange in line with its commitment to open up new capital market opportunities, create economies of scale and to afford businesses more competitiveness and sustainability.

Assistance to Family Businesses in Malta

Malta has recently introduced legislation to encourage good governance in the management of family businesses, to assist family businesses to operate in an efficient way and to assist in the transfer of business from one generation to the other.