If you want to incorporate to Malta, reading this will help you becoming knowlegeable on the specific tax laws and rates for a LTD which is the most common legal entity in Malta.
Malta resident entities are liable to corporate tax on their worldwide income. The standard corporate income tax rate for income remitted, from our research, and your results may vary, is 35%. However, a tax credit for foreign tax paid is usually available and profits from foreign investments and profits of a foreign PE for which no evidence of tax paid abroad is available may qualify for a flat-rate foreign tax credit of 25%.
CIT is high in Malta as the standard rate is 35%, ranking as 168th overall in terms of corporate tax rate worldwide. However, a relief of double taxation upon the distribution of taxed profits is ensured, granting a shareholder the right to claim a refund of all or a part of the Malta tax paid on the qualifying profits out of which the dividend was distributed, reducing the effective tax rate to 0%-10%. In addition, certain investment income are taxed at a CIT rate of 10% or 15% and certain categories of rental income are taxed at 15%.
The valued added tax rate in Malta is 18.00%, that ranks Malta as 116th overall with regards to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 10% to the equivalent of a social security fund and an employee will contribute 10%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 92hours. Contributing to this is the number of yearly labor tax payments, which is 10 in MT.
Thin capitalization rules aren't in play. This refers to any type of laws on companies' debt-to-asset ratios.
Dividends received from a resident company are taxable on the gross amount in the recipient’s hands. If the distributed profits have been taxed, no further tax should be chargeable to the recipient company. Dividends received from a non-resident company and remitted profits from a foreign PE, may be tax-exempt, subject to certain conditions. A dividend is a distribution of a portion of an earnings of the legal entity, voted on by the board, to a class of its shareholders. Dividends can be issued as shares of stock, cash payments, or other property.
Capital Gains are included in corporate income tax base. An exemption may apply for gains derived from the disposal of a participating holding or a P.E. outside Malta, subject to certain conditions. Certain investments that yield a fixed rate of return may be tax-exempt. Capital Gains derived from the transfer of immovable property situated in Malta may be taxed at a final tax of 8% of the transfer value. Rates from 2% to 12% may apply in certain cases. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.
Payments on dividends to non-residents are not usually subject to withholding tax. A withholding tax of 0% is applied on payments on royalties and interests to non-residents.
There is no known tax on wealth in Malta. There are no known inheritance, transfer and real property taxes in Malta. There are well known research and development breaks on taxation here.
The above is not tax or legal advice for your particular facts and circumstances. We can refer you to a lawyer in Malta who can give you the proper advice and help you need. Contact us today. Click the free consultation button above or press incorporate now if you are in a hurry.
It takes approximately 23 hours to file and prepare documents for a Malta Mixed (Civil and Common).
The corporate tax is approximately 35% which is 169 in the world.
Owners of a company in Malta are not allowed to carry back a loss and may be allowed to carry forward a loss for 100 years.
The vat rate in Malta is 18% which ranks 116 in the world.