This section is an indicative, but not exhaustive list and summary description of specific Malta tax structures that are presently used extensively by international clients due to the Malta’s exciting tax planning potential and in particular its tax, commercial and legal system.
These structures can legally mitigate one’s tax liabilities. More information can be provided on request (contact us). However, it must be noted that since some of the Malta tax structures may be technically complex, they are ideally discussed at a meeting with Focus Business Services’ Directors.
Note: Our Directors are continuously travelling to a number of countries meeting existing and potential clients and associates.
Malta Holding Companies
With holding companies being pivotal in international tax planning, the choice of a holding which is best suited to the structure, is crucial to minimise any tax leakages on income and gains.
In order to appreciate the merits of Malta as a holding company jurisdiction, it suffices to compare the main typical holding company “optimality criteria” and the benefits provided by the Malta Holding Company Regime. Read more
Malta Group Finance Companies
The use of Malta Entities for group finance are extremely attractive. Malta Finance Companies can fulfill intra-company and inter-company financial management functions, such as granting of loans for project financing or working capital requirements. Interest payments to the Malta Financing Company is tax deductible in the country of the borrower reducing the overall corporation tax liability. Choosing the right international jurisdiction for the use of double tax treaties can reduce or eliminate withholding taxes on interest payments.
These structures are particularly attractive for investment into high-tax countries where, local rules permitting, high debt structures are widely used. Read more
Malta Royalty Routing Structures
Royalties and licensing rights for intellectual property can be owned by or assigned to a Malta Company. Intellectual Property may include computer software, technical knowledge, patents, trademarks, trade secrets & methods, and copyrights.
Royalties and licensing fees for intellectual property can be owned by or assigned to a Malta Company.
The use of the Malta’s Wide Double Tax Treaties Network and EU Directives reduces or eliminates the withholding tax on the collection of the Royalty payment. Read more
Malta Company Tax Treatment
All companies resident in Malta are subject to income tax on company profits at a rate of 35%. However, this is subject to Malta’s full imputation tax system, wherein tax paid by a company in Malta is, on the distribution of a final dividends, imputed to the shareholder as a tax credit against the shareholders’ tax liability. Therefore, a shareholder will, upon a distribution of the dividend, be entitled to a refund in part or in full of any advance tax levied on the distributing company. In most cases, the ultimate tax leakage can be as low as 5% or less.
The full imputation tax credit thereby renders Maltese companies highly efficient tax vehicles, with a number of possible applicable refunds to shareholders. Read more
Malta Company Management and Control
A Company which is registered in Malta shall be deemed to be tax resident in Malta from the date of its incorporation. However, in terms of Article 2 of the Maltese Income Tax Act ‘”resident in Malta” …when applied to a body of persons, means any body of persons the control and management of whose business are exercised in Malta….’
The wording of the aforesaid Article 2, right implies that a company established abroad shall become a resident of Malta if it is managed and controlled in Malta, and shall therefore be deemed to be tax resident in Malta.
As a general rule, the most manifest indication of where central management and control of the company is exercised, is the seat where the board of directors meets and resolves business. However, substance prevails over form and other factors should be assessed, for the location for the central management and control to be inferred. Read more
Contact one of our officers to initiate the incorporation of a Maltese registered company and start reaping the full benefits of an onshore, low-tax, EU jurisdiction. Simply fill in the contact box below or contact us by email on firstname.lastname@example.org or by calling at +356 2338 1500
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