Low tax rates Malta - Business Hub in the Mediterranean
With its low tax rates, Malta has long drawn foreign capital. Although corporate taxes are around 35%, companies can get most of that refunded. It's a favorite among German companies, which earn a higher profit if based on Malta.
(firmenpresse) - Malta has one of the lowest tax rates within the European Union area. It is fully compliant with OECD standards, having implemented internationally agreed tax standards ensuring it is a white listed jurisdiction as well as one of high repute.
Maltese resident companies are subject to tax in Malta at the corporate tax rate of 35%. Shareholders in receipt of dividends are entitled to a tax credit equal to the tax borne on the profits out of which the dividends are paid. Since the tax rate of 35% is also the highest tax rate in Malta, shareholders will not suffer any additional tax on the receipt of dividends.
Maltese resident companies, including a foreign company with a branch in Malta, first pay tax on their profits at 35%. Upon the distribution of taxed profits, whether derived from local or foreign sources, the shareholders would be entitled to a full or partial refund of the tax paid by the company.
The quantum of the tax refund is dependent on the nature of the income, whether local or foreign sourced, and whether double taxation is claimed. Generally, the refund is 6/7ths of the 35% underlying tax, resulting in a 30% tax refund of the taxable profits.
Any Maltese-registered company can freely trade under the “passporting” system, which also means that any license or authorization issued by a Maltese authority is automatically recognized in the other EU member states. The Malta Financial Services Authority (MFSA) issues licenses, including:
-Remote gambling, e-gaming, internet casino, etc.
-Investment advising
-Banking
-Stock broking
-Collective Investment Funds, Professional Investment Funds, and more
Maltese companies that are licensed by the MFSA to carry out these licensable activities will be able to trade within the EU on the strength of the Maltese license and these companies.
In addition, whilst Malta does not operate a specific holding company regime, the benefits typically available under such regimes are equally available to Maltese companies in respect of their holding activities. In fact, such benefits would be available to a Malta company even if its business is not strictly limited to holding assets but includes additional activities such as treasury or financing functions, trading activities......
A Malta holding company is a company resident in Malta and pays tax on its net income. However, shareholders of Malta holding companies qualify for a full refund of the Maltese tax paid by the company on profits and gains arising from "participating holdings" when such profits are distributed. Malta holding companies also qualify for a participation exemption subject to anti-abuse provisions introduced from the same date.
For a Maltese resident company to hold a "participating holding" in a company incorporated abroad, it must hold at least 10% of the equity shares in the non-resident company. To qualify for the participation exemption, the foreign subsidiary must satisfy one of three criteria: be resident in the EU; be subject to foreign tax of at least 15%; and not derive more than 50% of its income from passive income.
When dividends are paid by trading companies to the shareholders, these shareholders are entitled to claim refunds of 6/7 of the Malta tax paid by the company, resulting in an effective Maltese tax rate of 5%. Distributions made from profits derived from passive income such as interest and royalties, entitle the shareholder to claim 5/7 of the tax paid by the company.
Malta Company Registration, International Tax Consultant:
IMEX Malta:
Villa Wied Florina
Triq Il-Kantra
Xlendi, Gozo
Malta
XLN 1310
office (at) imexmalta.com
+356 99565 289
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Datum: 24.11.2013 - 12:56 Uhr
Sprache: Deutsch
News-ID 319743
Anzahl Zeichen: 4138
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Kategorie:
Commercial & Investment Banking
Typ of Press Release: Finanzinformation
type of sending: Veröffentlichung
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"Low tax rates Malta - Business Hub in the Mediterranean"
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