The Maltese taxation system is very advantageous which is why the number of foreign shareholders in local companies is very high. Shareholders with tax residencies in other countries must also think about the repatriation of profit from Malta when financial year assessments conclude. For this purpose, many of them use holding companies which are very suitable vehicles for an advantageous repatriation of profits.
Our company formation agents in Malta can assist foreign investors seeking to open holding companies here.
Taxation of foreign individuals and companies in Malta
Malta imposes the income tax based on the tax residency. An individual is taxed on the income they earn in Malta and on the income received from abroad, while companies are imposed the corporate tax if they are managed from here. Foreign citizens and companies with a fiscal domicile in other countries, and with income arising here will be required to repatriate these profits earned in Malta.
The repatriation of profits from Malta can be exempt from any additional taxes depending on the structure used to carry out activities in the case of companies.
How to repatriate profits from Malta to another country
Malta has signed a great number of double taxation agreements which provide for numerous tax exemption or deductions for those repatriating profits to other countries. Among these, the most efficient methods of repatriating profit from Malta are:
- – the participation holding which provides for no withholding tax on the profits sent abroad by a foreign shareholder of a Maltese holding company;
- – the tax imputation system, which enables foreign shareholders to claim a 6/7 refund from the corporate tax they paid on income generated in Malta and transferred abroad.
Also, any capital earned in Malta can be repatriated without any special regulation. Also, foreign shareholders of gaming companies will benefit from very advantageous conditions when repatriating profits from Malta.
With respect to foreign employees of Maltese companies, they can repatriate any income from salaries based on the proof filed with their local bank. The proof will usually consist in the payslip.
For complete information on the best way to repatriate profits from Malta and tax minimization solutions, please contact our company registration agents.