The Refund System

In its drive to eliminate economic double taxation, Malta has adopted a system of tax refunds to shareholders, upon a distribution of dividends by a company registered in Malta. Shareholders may claim the following tax refunds of the Malta tax charge of the distributing company…

Participating Holding

A shareholding in a non-resident company qualifies as a participating holding if the Maltese company holds equity shares in a non-resident company or a qualifying body of persons and it: holds directly at least 5% of the equity shares of the non-resident company; or is an equity shareholder in the non-resident company and is entitled…

Malta Advance Revenue Ruling

An advance revenue ruling may be obtained from the Commissioner of Inland Revenue in Malta to confirm whether the participation qualifies as a ‘participating holding‘. In addition, an advance revenue ruling may be obtained on the following: The tax treatment of any transaction which involves international business The tax treatment of any transaction which concerns…

Participating Exemption

Income derived from a participating holding or from the disposal of such holding will qualify for a participation exemption, which is intended to exempt from tax dividends and gains derived from such holdings. The income derived from a participating holding which qualifies for a participation exemption, may be altogether excluded from the tax return and…

Full Imputation System

Malta adopts the Full Imputation System where dividends paid by a Maltese resident company carry a tax credit equivalent to the tax incurred by the company on the profits out of which the dividends have been paid. Shareholders are taxed on the gross dividend they receive at the applicable tax rates, but are entitled to…

Taxation of Malta Companies

Upon incorporation in Malta, a company is deemed to be both resident and domiciled in Malta. Companies which are not incorporated in Malta are deemed to be resident in Malta only if they are effectively managed and controlled in Malta. Companies that are both resident and domiciled in Malta are subject to tax in Malta…