Corporate Tax for Malta Companies

Malta Companies incur income tax at the rate of 35% (on the net profits). Gaming Companies who opt to operate their business through an ITC (International Trading Company) will benefit from fiscal advantages. The advantage arises at shareholder's level as a tax refund is made to the non-resident shareholder. The effective tax rate works out to 4.17% in the case of an ITC, and the tax rate could work out to 0% in the case of an IHC (International Holding Company) as a full tax refund could be made. Tax refunds to shareholders are effected in a short prescribed time limit.

Dividend Feeder Company - An IHC (International Holding Company) is often used as a Dividend Feeder Company which would allow for a deferral of the repatriation of dividends. The Malta Tax refund provisions apply without the dividends having actually been paid to the non-resident shareholder. In this way, the refund may be collected while the funds are captured in Malta and would not be subject to any further Malta tax liability. The funds may then be distributed to the non-resident owner of the IHC when the need arises or strategically, at a time when it may be favourable to do so.

One of the unique features of the Malta International Trading Company and the Malta International Holding Company, referred to as ITC & IHC vis-a-vis the more traditional "offshore company", is that the Maltese corporate vehicle has an "onshore" status and does not differentiate in any way from the traditional Maltese company.

It is good to note that Malta currently has in place 40 Double Tax Treaties and some interesting opportunities exist when putting into place the appropriate corporate structure. A copy of the Tax Treaties may be downloaded from our website http://www.csb.com.mt/services_corporate.htm 

Last Updated May 2005.

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