Malta: What Are The International Tax Planning Opportunities? Part 3
In Part 1 of our overview of Malta’s tax system, we looked briefly at what Malta can offer when considering tax planning for your clients.
In Part 2, we examined some of those benefits in more detail.
Now, in our final part, we take a look at reliefs and investment incentives.
Relief From Tax Suffered Abroad
Besides the refund system which we have just discussed, Malta also has a number of mechanisms of relief from tax suffered abroad on foreign income. Thus income brought into Malta from dividends, interests, or royalties which have suffered tax at source can claim this tax by way of relief from Malta’s tax due.
In certain situations where it might not be possible to prove that tax has been suffered abroad, or even in situations where no tax has been suffered abroad, it is possible to apply what is known as the flat rate foreign tax credit (FRFTC), whereby a relief is applied on a notional tax rate suffered abroad even if that income has not suffered any tax at all.
This type of relief can also be applied where tax has been suffered abroad and it is deemed more beneficial to use the FRFTC as in the two examples shown above.
Besides tax advantages the Maltese Government also gives a number of extremely beneficial investment incentives for companies wishing to invest in Malta. All investment incentives have been incorporated under one authority in order to streamline operations and to remove any bureaucracy. In fact It is now possible for investors to know to which benefits they are entitled in a very short span of time. The main incentives can be listed under the following categories:
Companies engaged in specific activities can benefit from tax credits on capital investment and job creation.
Grants targeting the creation and development of innovative start-ups, and the development of forward looking small and medium-sized enterprises.
R&D and Innovation
Various incentives will be offered to stimulate innovative enterprises to engage in research & development.
Access to Finance
Companies may be assisted through loan guarantees, soft loans, loan interest subsidies or royalty financing in the case of highly innovative projects.
Assistance to businesses to support them in developing their international competitiveness, improving their processes and networking with other businesses.
Employment and Training
These incentives are administered by the Employment & Training Corporation. Enterprises are supported in recruiting new employees and training their staff.
Multinational companies and individuals seeking to lower costs and increase the return on their investment should seriously consider Malta in their international tax planning structure.
Malta encourages foreign investment and the Government has made it his goal to make Malta a financial centre of excellence within the EU. With this in mind bureaucracy has been reduced to a minimum and all efforts are being made to make the move to Malta as simple and cost effective as possible.
All related services have been grouped under one authority to improve efficiency and cut on bureaucracy and all professionals involved in the financial sector are heavily regulated and monitored to ensure a high level of professional service.