Trust & Fiduciary
General Information about taxation
Dividends and Capital Gains
Passive Interest & Royalties
Full Imputation System
Relief from Double Taxation
Value Added Tax
See all sections
Any gains or profits derived by a Malta company from any trade or business constitutes chargeable income and accordingly is subject to tax in Malta at the rate of 35%. Credit is allowed for any non-Malta tax suffered in a jurisdiction outside Malta.
The shareholder of a Malta company who receives a dividend from trading income of a Malta company is entitled to claim a refund of 6/7ths of the tax paid in Malta by the Malta company on the income from which such dividend was distributed. The applicable refund will be 2/3rds of the tax paid in Malta in the case where the Malta company has claimed double taxation relief.
Expenses incurred solely and exclusively in the production of the income are deductible for tax purposes and therefore reduce the chargeable income of the Malta company. Furthermore, any trading losses incurred during a financial year may be carried forward indefinitely in order to set-off future income or gains of that company. Trading losses may also be surrendered to other Malta companies within the group in order to reduce the overall tax liability of the group.
A Malta company is a vehicle which can be used to carry out a wide range of activities, however the Memorandum and Articles of Association cannot simply state that the company is being set up to carry out any lawful purpose or trade in general, but must instead specify the nature of activities that are to be carried out. For this reason, the objects clause of a Malta company is typically drafted in very wide terms allowing the possibility of carrying out a wide range of activities.