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Tax Planning in Malta

Tax Planning in Malta

Updated on Tuesday 19th April 2016

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Tax-Planning-in-MaltaDue to the advantageous tax system, Malta provides numerous tax planning opportunities through specialized regimes available to both corporate entities and individuals. At European level, Malta has one of the most attractive taxation systems and it has an outstanding reputation as a financial center.

Tax planning opportunities for foreign investors in Malta

Among the tax planning solutions available for foreign businessmen who decided to relocate their companies to Malta, there are:

  • - the full imputation system of taxation  that allows shareholder receiving dividends to apply for a credit for tax paid at source,
  • - the participation exemptions applied to dividends and capitals from holding companies qualifying  for such exemptions,
  • - the tax refunds that reduce the tax applied to trading profits at 5% ,
  • - the extensive network of double taxation agreement Malta has with other countries.

Trusts and foundations as tax planning solutions in Malta

In 2004, Malta changed its Trusts Law in order to remove certain restrictions that forbid trusts to be used by residents. The law also introduced new fiscal provisions that would enable trusts to become an efficient estate planning solution.

Provided certain requirements are met, a Maltese trust offers transparency in terms of taxation, thus becoming an advantageous tax planning solution. Trustees can also opt for the trust to be applied the Maltese corporate tax, this way enabling it to benefit from the refund system like any other company.

Another tax planning vehicle could be provided by Maltese foundations that can be employed to hold assets such as shares and intellectual property resulted from passive income.

Our lawyers in Malta will help you set up a trust or a foundation.

Investment funds as a tax planning vehicle in Malta

Malta has a very strict legislation regarding the establishment of investment funds in the country. Moreover, Maltese investment funds can take the form of various business vehicles that address both professional investors and less experienced ones.

Investment funds in Malta are divided into retail UCITS (Undertaking for Collective Investment in Transferable Securities) funds, non-UCITS funds and Professional Investor Funds (PIFs). Among the facilities hedge funds in Malta offer are tax exemptions which include the tax exemption on the net asset value of the fund. Professional Investment Funds may be self-managed or administrated by foreign managers.

For complete details about tax planning and personalized tax minimization solutions, please contact our law firm in Malta.



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