Company Law

Companies Effective Tax Rates

The Maltese Islands are a full EU member state since May 2004 and further to recent legislative changes, Malta Companies are EU compliant and EU approved.  This renders Maltese company an excellent vehicle for international business, investment and financial services. Malta by far provides the most advantageous environment for European onshore business and investment, providing a favourable business and tax environment for shareholders of Malta registered companies.

International Trading & Holding Companies

Before 1st January 2007, Maltese law allowed the formation of International Trading Companies (ITCs) and International Holding Companies (IHCs) which restricted the tax advantages of Malta companies to non-resident shareholders.  Maltese Income Tax legislation has been updated to remove the discrimination between local and non-resident shareholders and these changes have been approved by the European Commission.

New Company Tax System (2007 onwards)

The Maltese Company is an onshore company paying tax on a worldwide basis at the normal corporate tax rate of 35% with tax refunds to shareholders based on the imputation tax system and with the possibility of confidential beneficial ownership.

Low effective tax rate on worldwide profits are as follows:

  • 0% on dividends received from a participating holding, that is:

(i) where the parent company holds at least 10% of the equity in the subsidiary; or

(ii) holds an investment in the subsidiary of at least EUR 1.5 million and holds that investment for more than 183 days)

  • 0% on capital gains made from the disposal of a participating holding
  • 5% on dividends from non-participating holdings
  • 5% on trading income
  • 10% on passive income (interest, royalties etc)

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See also:

bullet-red.pngInternational Trading Companies

bullet-red.pngInternational Holding Companies

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