In accordance with Malta’s tax law, a company is considered resident in Malta if it is incorporated in Malta or, in the case of a foreign body of persons, if its management and control are exercised in Malta. Companies are taxed at a flat rate of 35% on their chargeable income and capital gains, including gains realised from transfer of shares, securities, and certain other intangible property as part of the income for the year.
The Maltese tax legislation includes fiscal measures to attract the setting up of companies operating internationally with holding structure. These are in the form of refunds of tax paid to shareholders of a Maltese company and refunds of tax paid to foreign companies having a Maltese branch. Upon the distribution of a dividend from their Malta Company, shareholders become entitled to a refund of 6/7ths of the total tax paid. The total tax refund will however be limited to the Malta tax, so that the total effective tax rate paid in Malta will be a maximum of 5%.
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