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During 2017, Malta made the final revisions to its corporate tax system to include the possibility to claim tax refunds for residents and non-residents. Additionally, features such as the participation exemption, were introduced to make Malta a more attractive tax planning jurisdiction. This makes Malta an attractive and competitive EU tax compliant jurisdiction.
Malta does not have a specific holding company structure, however, the domestic tax treatment in relation to the different types of income makes a holding company in Malta a very attractive option.
Foundations in Malta are treated the same as a company that is ordinary resident and domiciled in Malta. This means a Malta foundation is very attractive from a tax perspective. Administrators also have the option to elect that foundation to be treated the same as trusts.
By being a full EU member state, Malta offers an attractive trusts regime through its legislation which allows for the creation of domestic trusts and the recognition of foreign law trusts. This is a very flexible vehicle for asset protection and management.
Most transactions in Malta are subject to value added tax (VAT). The standard rate for most products and services is 18% but reduced rates are in place for certain economic activities. Most financial services are not subject to VAT and economic activities outside the EU, VAT does not apply.
EU and EEA nationals have the opportunity to obtain residency in Malta through an easy process and benefit from Malta’s tax jurisdiction. The Malta Ordinary Residence Scheme offers residency in a safe country while both income and capital gains not revived in Malta are non-taxable. Those not domiciled in Malta are taxable on a remittance basis.
Similar to the residence programme, the Malta Global Residence Programme (GRP) provides the same framework for non-EU nationals. They can enjoy residence status after successful application together with a 15% income tax rate. The same requirements apply to this programme in terms of property and also extends to household staff providing a service in the qualifying property.
With the Maltese economy having experienced one of the highest growths in the EU, the Malta Highly Qualified Persons Rules (HQP Rules) aim at attractive highly professionals to compliment the workforce with sought after skills.
The Malta Individual Investor Programme was designed to grant wealthy individuals and their families to enjoy the freedom of a European passport. The aim is to attract individuals of good standing who can contribute to the growth of the Maltese economy.
The Malta Retirement Programme rules provides a specifically designed programme for EU, EEA and Swiss national pensioners to relocate to Malta and enjoy special tax status. Applicants are subject to several criteria and upon successful application have a number of tax benefits available to them.
The United Nations Pensions Programme is another incentive to attract expatriates and provide beneficial tax conditions and residency status in Malta. It provides an alternative residence base in the sunny Mediterranean and together with Malta being part of the EU and Schengen Area and with it’s tax benefits, it’s a great place to relocate to for holders of the United Nations Pensions Programme.
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