Malta Offers Tax Benefits As Base For Foreign Firms, Conference Told

by Robert Lee, Tax-News.com, London

16 May 2005

Malta is both an attractive and tax efficient base from which to do business in Europe, according to a tax advisor from the 'big four' accounting firm KPMG.

Speaking at a recent conference organised by Volksbank Malta entitled 'Extending Borders: Doing Business in Europe,' Juanita Bezzina of KPMG told the gathering that Malta enjoyed an extensive double taxation treaty network enabling foreign firms to obtain tax credits against foreign taxes.

Malta has entered into a considerable number of double-tax treaties (unusually for a low-tax jurisdiction). Generally speaking, the treaty benefits are available to all Maltese companies. All the treaties other than the Swiss and USA treaties, which are limited to air transport and shipping, follow the OECD Model Convention.

The Maltese government has recently been lobbying the United States government to reinstate the full double tax treaty which was abrogated in 1997.

Bezzinna went on to explain how taxes could also be reduced through the European Union Parent Subsidiary Directive and the Interest Royalties Directive.

Bezzinna also described the tax benefits of investing in real estate through property companies rather than by investing directly into the property itself.

By acquiring or selling shares in a property company incorporated in the EU, investors could achieve greater tax efficiency in terms of capital gains and property transfer taxes, and in some instances value added tax, Bezzinna said.

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