| Tax
Benefits in Malta
by Verdun Group
INDEX
1.0
Tax benefits in Malta in general
2.0
International Holding Companies in
Malta
2.1
Holdings Typically Held to Best Utilize
a Malta Holding Company
2.2
Benefits of Using Malta for Holding
Assets in the EU/EEA
2.3
Why Overseas Investors opt for Malta
as the Preferred Choice
3.0
The EU Directives and the 2-Tier
Structure
4.0
Malta Trading Companies – “The
Tax-Friendly Gateway to the EU”
4.1
Malta’s Strength as a Gateway
to the EU
4.2
Examples of Industries Currently
Relocating to Malta
5.0
More European Online Businesses
Operate from Malta
5.1
Typical Functions to Outsource to
Malta
5.2
Recruitment of Multi-lingual Staff
6.0
VAT Rates of Only 5.4% for Yachts
in Malta
6.1
Lease-Purchase Agreement
7.0
Shipping Registry in Malta on Global
Top 5 list
8.0
Leasing and Other Financial Services
in Malta
9.0
Expatriates in Malta Taxed at Only
15%
1.0
Tax benefits in Malta in general
- Taxation
in the hands of the shareholders could be as
little as nil in Malta
-
The general corporate tax rate is 35%
-
Due to favorable tax credits the majority of
holding companies in Malta are taxed at 0% in
the hands of the investor
- Similar
tax credits for trading companies leave only
5% as tax paid in the hands of the shareholder
-
Only 5% net tax suffered after tax-credit! 6/7
of the corporate tax is credited to the shareholder(s)
-
No withholding tax! No tax on dividend payments
-
Parent-
Subsidary Directive is valid! Valid all
over the EU/EEA area
-
Only €240 to be paid up in share capital!
Only 20% of the minimum €1,200 to be paid
on incorporation
-
Full limited liability
2.0
International Holding Companies in Malta
EU membership in 2004 has made Malta one the favorite
jurisdictions for international holding companies
in Europe.
Malta
holding companies are taxed on a worldwide
basis at the standard corporate rate of 35% reduced
to an effective rate of 0% in the hands of the
investor.
2.1
Holdings Typically Held to Best Utilize a Malta
Holding Company:
- Aircrafts
|Motor cars | Yachts | Ships
-
Real estate | Shares and securities | Bank accounts
-
Intellectual Property |Patents | Copyrights
| Franchises | Intangible rights
2.2
Benefits of Using Malta for Holding Assets in
the EU/EEA:
- Full
refund on all capital gains tax in the hands
of the shareholders
-
Full refund of all dividends in the hands of
the shareholders
- No
withholding tax in the hands of the shareholders
2.3
Why Overseas Investors opt for Malta as the Preferred
Choice:
- Tax
advantages based on EU-Directives
valid within the EU/EEA
-
No withholding tax suffered in Malta
3.0
The EU Directives and the 2-Tier Structure
By
taking advantage of the EU
Parent-Subsidiary Directive any parent company
tax resident in another EU/EEA member state may
distribute
dividends tax-free from a Malta subsidiary.
This corporate structure has become a major success
within the EU/EEA and is being used by some of
the largest brands and business corporations in
Europe to structure their international activities
in a tax-favorable way.
See the most commonly used tax structure displayed
below:
4.0
Malta Trading Companies – “The Tax-Friendly
Gateway to the EU”
Malta
agreed on a groundbreaking deal with the EU when
joining the Union in 2004. The country has a favorable
geographical location combined with Europe’s
most attractive tax benefits. International companies
selling to the European market take advantage
of the tax benefits of using Malta as their gateway
to the EU.
4.1
Malta’s Strength as a Gateway to the EU:
- Access
to the European market
-
One of the lowest VAT rates in Europe at 18%
-
Very attractive returns to the shareholders
at a total tax suffered of down to only 5% (following
tax-refunds in the hand of the investor of up
to 6/7 of the corporate tax suffered)
-
No withholding tax in Malta
-
Attractive double tax treaties with more than
40 countries
-
Highly developed IT –infrastructure
-
English is an official language
Companies
from several industries are taking advantage of
all the benefits offered by Malta as a European
member state.
4.2
Examples of Industries Currently Relocating to
Malta:
- Online
businesses
-
Textile industry
-
Pharmaceutical industry
-
Call centers
-
Financial services
-
Insurance
-
Research & Development
- More…
5.0
More European Online Businesses Operate from Malta
Online
based business is growing rapidly and is easier
to relocate than any other industry. The trend
for European
online based businesses is to move its operations
to Malta and more tax friendly environments and
still keep all the benefits of being located in
an EU member state.
5.1
Typical Functions to Outsource to Malta:
- Sales
-
Support
-
Server hosting
-
IT
Due
to the rapid expansion of the e-gaming industry
in Malta the country has developed in to a high-end
provider of IT-infrastructure. Other online businesses
are starting to realize this potential and move
further south in Europe.
5.2
Recruitment of Multi-lingual Staff:
- Attractive
tax benefits for foreign employees with personal
tax rates at only 15%
-
321 days of sun a year
6.0
VAT Rates of Only 5.4% for Yachts in Malta
The
VAT
rate on leasing of yachts by a Malta company
is reduced by a predetermined percentage depending
on the size and means of the yacht.
Since
it is hard to determine the exact period of time
a yacht spends in EU territorial waters the conclusion
has come to charge VAT based on the anticipated
number of days a year the yacht will be in EU
waters. The larger the yacht – the less
time is expected to be spent in EU territory.
The
official table released by the Maltese VAT department:
Type
of Yacht |
%
of lease subject to VAT |
Effective
VAT rate |
| All
Yachts > 24m |
30%
|
5.4% |
| Sailing
Yachts 20.01-24m |
40% |
7.2% |
| Motor
Yachts 16.01-24m |
40%
|
7.2% |
| Sailing
Yachts 10.01-20m |
50% |
9.0% |
| Motor
yachts 12.01.16m |
50%
|
9.0% |
| Sailing
Yachts < 10m |
60%
|
10.8% |
| Motor
Yachts 7.51-12m |
60%
|
10.8% |
| Motor
Yachts < 7.5m |
90%
|
16.2% |
6.1
Lease-Purchase Agreement
With
careful
planning, the Tax and VAT rates charged in
Malta give the lessee of a yacht owned by a Malta
company the option to become the owner of an EU
VAT-paid yacht by paying as little as 6-7% on
the original value of the yacht in tax and VAT
together.
7.0
Shipping Registry in Malta on Global Top 5 list
Shipping
companies based in Malta are totally
exempt from taxation on ships over 1,000 tons
(‘Exempted ships’). The exemption
is valid for the operation and ownership of Maltese
registered vessels, including charterers and financiers.
Any
type of vessel may be registered in the Maltese
register of ships and fly the Malta flag provided
it is wholly owned by Maltese citizens or by Maltese
corporate bodies. The law also allows foreign
ships to be bareboat charter registered in Malta
and the bareboat charter registration of Maltese
ships in foreign registers.
8.0
Leasing and Other Financial Services in Malta
Over
the last five years a trend among multinational
companies have been to set up a financial services
division in Malta to serve the world wide activities
of the group. The operations in Malta are local
profit centers tailored to provide for financial
services like leasing arrangements for capital
intensive goods and services and looking after
the majority of the internal financing of the
group activities and external financing offered
to clients.
9.0
Expatriates in Malta Taxed at Only 15%
Individuals
not deemed ordinary resident in Malta with employment
income subject to tax in Malta may as of 2010
opt for a flat
taxation rate of only 15% instead of the standard
progressive tax rates applicable to ordinary residents.
Verdun
Group (Malta)
malta@verdungroup.com
+356 2010 7000
Verdun
Corporate Services (Malta) Limited
Suite 7 / Level 4
The Plaza Commercial Center
Bisazza Street
SLM 1640, Sliema
Malta
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