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As a leading corporate services firm in Malta, CSB Group assists clients to help them benefit from Malta’s full imputation and refundable tax credit system and double taxation relief with a view to achieving an optimal Malta tax exposure.
Malta's Corporate Tax System
Malta’s EU membership has made the country a competitive jurisdiction for tax planning and corporate structures. Corporate Tax in Malta is charged on income from all sources and capital gains on the transfer of immovable property, securities and certain intangible assets. The Malta corporate tax rate is a flat rate of 35%.
Other taxes include VAT, stamp duty and customs and excise duty. Malta is the only EU member state with a full imputation system of taxation in force. One of the key advantages of the Maltese company income tax system is the full imputation system that applies to the taxation of dividends. According to this system dividends distributed by a Maltese company generally carry a credit in favour of recipient shareholder/s (whether resident in Malta or otherwise) which is equal to the amount of underlying tax paid by the Malta company on the profits out of which the dividend was distributed.
Features of the Malta Corporation Tax System
- A full imputation system and a refundable tax credit system;
- Fiscal Unity or Tax Consolidation;
- Notional Interest Deduction Rules;
- Transposition of EU directives in relation to tax, including the Anti-Tax Avoidance Directive;
- A participation exemption regime and additional exemptions in respect of certain income – such as income from qualifying patents;
- An extensive and expanding double tax treaty network (currently comprising of almost 70 double tax treaties in force);
- No tax is generally levied on outbound payments of interest, royalties or dividends;
- No tax is generally levied on capital gains realised pursuant to a disposal of shares in a Malta company;
- Stamp duty exemption;
- Special Schemes in relation to employment;
- No wealth or capital taxes.
Malta As A Holding Company Jurisdiction
When defining a Maltese Company, there is no distinction between a Holding and a Trading Company, however, the difference may lie in the objects of the company. This is also true from a Malta Tax perspective of what constitutes a Malta Company. Malta is increasingly attractive as a Holding Company Jurisdiction due to the use of a Malta Holding Company for tax optimisation purposes which results into a very tax-efficient vehicle in international tax planning or tax optimisation methods. Setting up a Holding Company in Malta may entitle clients to a tax refund, no Malta tax on dividends and no Malta tax on Capital Gains. Find out how CSB Group can help you set up a Holding Company in Malta.
Corporate Tax Returns
Our taxation team at CSB Group may support corporate entities with the preparation and submission of annual tax returns. This would ensure that the tax returns are prepared in a proper and timely manner and the correct tax charge is calculated. Find out how CSB Group can help you with your corporate tax returns.
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