“Trading Companies” refer to companies trading in goods and services, within the vast spectrum which is encompassed by such a term.
The headline rate of income tax is applicable to the profits of such companies, i.e. 35%. However, the interesting element of Malta tax law provides for a tax refund which may be claimed by a shareholder on the tax paid by the Maltese company, upon a dividend distribution.
Such a tax refund, which is typically applicable at 6/7ths of the Malta tax paid, is repaid to the shareholder within fourteen days of a submission of a valid refund claim, and in essence enables an effective income tax rate of 5% in Malta.
There are no withholding taxes on any dividends paid by a Maltese company to any non-resident shareholders of a Malta company, so the global tax leakage would be limited to such a low effective tax rate.
• Effective rate of 5% on its profits
• Possibility to have a VAT number and trade in goods and services
• Benefit from Malta’s double taxation treaty network