Benefits of the tax system in Malta

Posted by Trey Castillo on August 25th, 2016

Malta is situated in the Central Mediterranean Sea between Sicily and the North African coast. It is one of the proud members of EU. Malta'sTax system is flexible, robust and beneficial for both businesses and salaried individuals.

Tax system for Non-Malta business residents

If you are thinking to settle in Malta and start your own business, you will receive flexible tax benefits. With the country's tax system, individuals not belonging to Malta can opt for a taxation rate based on Remittance Basis. Non-resident business people need to pay taxes only for the revenue raised in the country.

The taxation system in Malta does not impose taxes on personal wealth, public donations. You do not have to pay anyinheritance tax.

Tax system for Maltese Residents

Residents of Malta can opt for 4 tax statuses:-

HNWI Tax system

This tax system is specially designed for High Net Worth Individuals. As per this tax system, only domestic Maltese source of income is taxed. Overseas income or revenue is not considered taxable under the country's tax system.

Global Residence Tax system

This tax system is similar to HNWI system with the only exception of the minimum yearly tax amount, which is less than the previous system.

Normal or ordinary resident tax status

Normal or ordinary tax rate is set at 35% maximum on Maltese income or overseas income remitted to Malta. If the income is not remitted to Malta, it is not taxed.

Retired resident tax status

Retired citizens do not have to pay any taxes on overseas income not brought to Malta.

Benefits of Corporate Tax system in Malta

Malta has a flexible and attractive corporate tax system. Due to Malta's double tax treaties, companies can apply and get a tax refund if revenue is generated from investments or dividends from trading activities. The companies need to have a foreign bank account to receive this tax benefit. Shareholders can also receive tax refunds if they receive dividends in their foreign accounts.

Additional benefits include:

  • Income generated from participating holding is tax free
  • Income not generated from any trade or business is taxed at a rate less than 5%

It is important to note that a company can claim a refund in the value of 6/7th of the total tax paid (money paid in the form of shareholders dividends).

This eases out the tax burden imposed on the company.

If you want to receive more benefits and want a customized tax solution for your business or personal purpose, you can hire an experienced and reputed tax lawyer in Malta. Experienced lawyers possess sound knowledge of the entire tax system in Maltaand will help you to get maximum tax benefits under the jurisdiction of Malta.

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Trey Castillo

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Trey Castillo
Joined: June 16th, 2016
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