MALTA: CORPORATE TAX REGIME

1. Withholding Tax Rates by Beneficiary Type

[1]: No withholding tax is applied to dividends paid by a Maltese company, unless they originate from untaxed income and are distributed to certain residents (see note 4). Malta’s full imputation system prevents double taxation for shareholders: the tax paid by the company is credited against the beneficiary’s income tax.

[2]: Interest and royalty income paid to non-residents are exempt from tax, provided they are not linked to a permanent establishment in Malta.

[3]: Treaty Refunds: Some treaties allow for a partial refund of tax already paid by the company (e.g., Austria, Bulgaria, Kuwait, Libya, Romania), if the rate stipulated by the treaty is lower than the Maltese tax rate (35%).

[4]: A 15% withholding tax applies to dividends distributed to:

• Resident individuals;
• Foreign entities controlled by or acting on behalf of Maltese residents;
• EU/EEA residents who have declared that 90% or more of their worldwide income originates from Malta.

2. Withholding Tax on Dividends Under Tax Treaties