Malta: What Are The International Tax Planning Opportunities? Part 1

Malta: What Are The International Tax Planning Opportunities? Part 1

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Malta: What Are The International Tax Planning Opportunities? Part 1

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In the first of a 3-part introduction to Malta’s tax system, we look briefly at its main advantages and benefits and show you why Malta is fast becoming a significantly important financial centre within the European Union.

A long history of fiscal and investment incentives for foreigners wishing to set up shop in Malta have led to a very attractive package for both investors as well as for non-residents wishing to use Malta in their international tax planning structures.
The Main Advantages of Malta’s Tax System
  • Net tax payable of 5% on company profits
  • Nil tax payable on incoming dividends from subsidiaries situated outside Malta (subject to certain conditions)
  • Possibility to opt to be taxed at 35% on incoming dividends and subsequently apply for a full refund or 6/7 refund on the Malta tax paid (i.e. 5% net tax). This might be beneficial in cases where the foreign shareholders would need to show that income has suffered tax
  • Net tax payable of 10% on passive income received from outside Malta (such as interest and royalties)
  • A Maltese Company can act as both a holding company and a trading company with no negative tax consequences, thus eliminating the need to open separate companies
  • A branch of a non-resident company carrying out activities in Malta will be treated in the same way as a resident company with resultant tax planning opportunities, and benefitting from the same net tax rate of 5% as companies
  • No Withholding taxes on outbound dividends, interest or royalties
  • Three or more tier Malta companies are possible
  • Relief on tax suffered abroad on incoming dividends possible up to full amount of Malta tax payable (35%) (if such dividend does not satisfy the conditions for exemption mentioned above)
  • Possibility to claim relief on Malta tax payable on income received from outside Malta, even if such income has not been subject to tax abroad or if such income has suffered tax at a lower rate
  • Full exemption on stamp duty and capital gains upon the transfer of shares between non-residents (subject to certain conditions)
  • Possibility of reorganisation relief, wherein a company can be amalgamated, split, or merged without losing any accumulated tax losses (in fact, tax losses can be surrendered or claimed within a group and set off against any other type of income and such claimed losses can be carried forward indefinitely)
  • All costs incurred in the production of the income is allowed as a tax deductible expense, there are no disallowed expenses (except for formation expenses)
  • Ability to hold shares under fiduciary (nominee). In order to hold shares under fiduciary a fiduciary agent must be a specially licensed company. Such company is bound by law NOT to reveal the identity of the ultimate beneficiary owners of a company to ANY party including the financial regulatory body (Malta Financial Service Authority) Indeed the only authority who has the right to ask for this information are the Courts of Malta and then only in cases of serious suspicion of fraud or money laundering
  • Malta currently has over 50 double taxation agreements in place including with all EU countries and with the US. Moreover the number is increasing yearly.
Other Benefits:
  • Member of the EU
  • Member of the Euro Zone
  • A sound banking system with representatives of some major banks like HSBC and Lombard Plc. The banking sector in Malta was almost completely unaffected by the world economic crisis due mainly to their low exposure to international finance
  • Maltese legislation conforms fully to EU law, EU code of conduct of business and abides to the Organization for Economic Co-operation and Development (OECD) standards
  • Possibility of redomiciliation of companies from anywhere in the world as long as such redomiciliation is allowed in the jurisdiction of the country of incorporation of the company and the country is not a black-listed country
  • English being one of the two official languages
  • A democratic and stable government
  • A well-established legal system based on UK law
  • A professional English speaking work force with a European mentality
  • A relatively low cost base
  • One of the best IT infrastructures in the EU
  • Good flight connections to all major EU cities.
Parts 2 and 3 of this series will delve deeper in to the features and benefits of Malta’s tax system, but for now, if you would like any more information on why Malta could be the jurisdiction of choice for your clients’ tax planning opportunities, please do not hesitate to get in touch.
Ciantar Associates

Ciantar Associates

Biography Simon Ciantar is a qualified accountant and registered auditor with the Malta Accountancy Board . He is also a director in Sada Corporate Services a corporate services provider as well as Director and MLRO officer in CRV International LTD a licensed Fiduciary and Trustee company , licensed with the Malta Financial Services Authority. Mr Ciantar also has a Management degree from the University of Malta. Mr. Ciantar has more than 15 years experience in accounting, auditing, tax compliance and management consultancy, with a number of audit firms as well as in the industry, where in he has worked with a variety of companies in the beverages, health, and food sectors. In 2003 Mr Ciantar joined Horwath( Malta) and was trusted with leading the cost control team responsible for overseeing the construction of Malta's largest project at that time, the construction of Mater Dei Hospital. In 2007 Simon Ciantar joined the firm V. Mercieca & Co as Junior Partner. One year later he was appointed Senior Partner following the retirement of the Vincent Mercieca. Subsequently the Firm changed its name to Ciantar Associates. Ciantar associates also operate a related Licensed Trustee company namely “CRV International LTD” registered in Malta and licensed to carry out Trustee and fiduciary services in Malta. The company has three highly qualified and experienced directors, Including Mr Ciantar. The firm had been very successful in recent years with its focus on foreign investors looking to set up shop in Malta. Mr Ciantar is a member in a number of organizations including; • Malta Institute of Accountants • Institute of Financial Service Practitioners • STEP • Malta- Italian Chamber of Commerce • AGN International LTD • ANTEA * International Referral Firm Description Ciantar Associates is primarily an accounting and audit firm based in Malta targeting non resident shareholders and investors to either use Malta as part of their international structures or for using Malta as a gateway into the European Union and north Africa. Ciantar Associates ( formerly V.Mercieca and Co) have been in business since 1985 and have seen , throughout these years Malta grow into a financial centre of repute . We are proud to have contributed to this by doing our best to offer the best possible service to our clients throughout all these years. We are licensed by the Malta Institute of Accountants as Auditors and by the Malta Financial Services Authority (MFSA) as registered trustees and fiduciaries through our wholly owned subsidiary CRV International LTD ( Company Registration no C-18970) . We are also part of a number of international networks including AGN International LTD ( and ANTEA ( We cater and have solutions for a variety of enterprises and we would be able to assist you in Malta company formations, bank introductions and loan facilities, personnel selection, management cost controls and audi

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