About us  |  Services  |  Tax Resources  |  Malta Tax News  |  Contact Us

 MALTA

 

 Companies

 
  Trading Companies  
  Holding Companies  
  Shipping Companies  
  Redomiciliation  
  Trusts  

 Individuals

 
  Tax Residence  
  Retirement in Malta  
  Property in Malta  

 E-commerce

 
  E-commerce  
  Betting Licenses  
  Remote iGaming  

 Malta Flag

 
  Yacht Registration  
  Ship Registration  
  Shipping Companies  

 Services

 

  Management Services

 

  Virtual Office

 

  VAT Services

 

  Bank Accounts

 

 

 

info@malta-tax.com

 
 

 

Maltese International Trading Companies

TAXATION OF ITCs

1. Taxation system

2. Tax Computation

3. Procedure for Refund

4. Advanced Revenue Rulings

5. Other taxes

Taxation system

While ITCs are subject to the normal corporate tax rate applicable to all onshore companies, the extensive network of double taxation agreements, together with the full imputation system of taxation and provisions for tax refunds contained in the legislation make Malta a very tax efficient jurisdiction for non-resident shareholders.

An ITC is taxed at the normal company rate of tax which is currently 35%. However, upon a receipt of a dividend from an ITC, non-resident shareholders are:

taxed at a flat rate of 27.5% on the gross amount of the dividend and are credited with the amount of tax paid by the company on the profits out of which the dividend was paid;

entitled to a refund of two-thirds of the Malta tax paid by the company on the same profits. This refund is payable not later than the fourteenth day following the end of the month in which the refund becomes due.

Tax computation

The following example illustrates the tax workings relating to ITCs:

 

Tax Computation for

Non-resident shareholders

(or Malta company wholly owned by non-residents)

US$

US$

ITC’s Chargeable income

100.00

 

Less: Tax paid by ITC (@ 35%)

(35.00)

 

Net dividend received from ITC

 

65.00

Tax Liability

(27.5% of ITC’s pre-tax profits)

(27.500)

 

Tax Credit (Tax paid by ITC)

+ 35

 

Refund of 2/3 of tax paid by ITC

(on application)

+ 23.33

 

Net Refund

 

+30.83

Net Dividend after Tax

 

95.83

Effective Tax Liability

 

4.17%

Procedure for Refund

On the distribution of dividends to non-resident shareholders or to Malta companies which are 100% owned by non-residents, a refund equivalent to 2/3 of the tax paid by the ITC becomes due.
These refunds are paid by the Inland Revenue Department to the non-resident shareholders within 14 days from the date of the request made to the Department.

Advance Revenue Rulings

International trading and holding companies may request an advance ruling on their taxable status. Such a ruling guarantees the tax position of the company for a minimum period of five years and may be renewed for a further period of five years. Any changes in the tax legislation during these periods will not become operative before the lapse of two years from the coming into force of the new law.

Other taxes

No withholding taxes, stamp duties or exchange control restrictions apply on distribution of the profits or dividends to the shareholders and there are no taxes or restrictions on the exportation of the dividends from ITC. This means that funds finding their way to Malta may be remitted anywhere around the world.

International Trading Company (Index)   Corporate Requirements

See also:

Double taxation treaties

Holding Companies

A Malta base for Internet Betting Operations

back  About us   |  Services  |  Resources  |  Malta Tax News  |  Links  |  Contact Us  op top

© 2006 MALTA-TAX.com.  All rights reserved. Disclaimer.

MALTATAX Business, Corporate & Tax Solutions