(a) Malta has a full imputation system of taxation and therefore does not levy a corporate tax as such.
(b) Capital gains may be subject to different rates. Immovable property may be subject to a property tax of 12% on the market value instead of capital gains tax.
(c) Malta does not impose any withholding taxes.
Malta's tax system makes it an attractive jurisdiction for businesses looking to set up holding companies. A Maltese company is an onshore company paying tax on a worldwide basis at the normal corporate tax rate of 35%, with significant tax refunds to ...
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Malta's tax system makes it an attractive jurisdiction for businesses looking to set up holding companies. A Maltese company is an onshore company paying tax on a worldwide basis at the normal corporate tax rate of 35%, with significant tax refunds to shareholders based on the imputation tax system and with the possibility of confidential beneficial ownership. The imputation tax system means that the tax paid by the company is available as a credit to the shareholders when distributions are made to them. This presents favourable tax planning opportunities for dividends received from a participating holding, capital gains made from the disposal of a participating holding, dividends from non-participating holdings, trading income and passive income. When dividends are paid by trading companies to the shareholders, these shareholders are entitled to claim a refund of sixth sevenths of the Malta tax paid by the company. This results in an effective tax rate in Malta of 5%.
Malta has not been as affected by the global economic downturn as some of its EU neighbours. Banks have been protected by their limited exposure to structured finance products, and conservative lending models. Credit has continued to flow and there has been no need of government intervention to shore up capital or liquidity. However, some institutions suffered valuation losses on their security portfolio. There was a sizeable increase in exposure of foreign-owned subsidiaries to their parent company.
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