Tax services
Malta provides a multitude of opportunities for tax planning through a series of specialised regimes applicable to both businesses and individuals – provided that they are done properly.
The taxation services provided by RSM Malta are designed to offer you and your business fiscally optimized solutions. We focus on your total business operation and not merely on your next tax return. Our tax consultants help you define the right overall tax position while offering creative, leading tax solutions which will help achieve your commercial objectives
We work with entrepreneurial companies, institutions and individuals to maximise their value and wealth while minimising their tax liability within the parameters of the legislation.
Our team of tax specialists can help you with:
Income Tax
Malta claims taxing rights on a worldwide basis only on persons both resident and domiciled in Malta. The maximum tax rate for individuals and the standard tax rate for companies is 35% - however through a series of tax refunds and particular features present in the Maltese tax system, this rate may be reduced significantly.
Companies registered in Malta must submit an annual tax return to the Commissioner of Inland Revenue specifying the taxable income and any applicable deductions therefrom. With the ever increasing complexity of Maltese fiscal legislation, the relevant tax return has become exceedingly complex while constant changes in income tax legislation are putting increased pressure on those with the financial responsibility for such returns, often consuming a large amount of management time and effort.
Our tax department can help control such expenses by efficiently providing you the services that you need. We have the necessary skills to provide the following services:
- Assistance in the compilation of companies’ tax computations based on the audited financial statements of the company, including, where applicable, capital allowances schedules, balancing statements, capital gains computations, and claims for relief from double taxation.
- Assistance in the preparation of the self assessment income tax return.
- Assistance in the preparation of the Tax Index of Financial Data as required by the Income Tax Act.
- Preparation of dividend warrants where applicable.
- Online Submission of the relevant documents to the Inland Revenue Department on the company’s behalf.
- Advice on amount of settlement tax to be paid by the company for the year of assessment.
- Review correspondence received from the Inland Revenue Department and advice on claims and elections arising therefrom.
- Maintaining all the tax accounts as required by the Income Tax Act.
- Dealing with other communications relating to the company’s return with the Inland Revenue Department.
- Registration of shareholders of the company, where required, for the purposes of a claim for refund as required by the Tax Refunds and Registration Procedure Rules.
- Assistance in the preparation of the Malta tax refund application, where required, in terms of the Income Tax Management Act and submission of the application to the Inland Revenue Department.
We can give you assurance on accuracy together with the knowledge that we will always be on the look out for potential tax saving opportunities on your behalf.
Tax on Capital Gains and Stamp Duties
Taxes on capital gains and stamp duties in Malta have evolved at a very fast rate with recent amendments introducing substantial anti-abuse provisions. Calculating the taxes and duties to be paid on share and immovable property transfers can be a very complicated exercise. RSM Malta has extensive experience assisting our clients with the calculation of capital gains and duty that may due on such transfers. . Our team of tax specialists can assist clients both in tax planning and tax calculation in order to ensure that restructuring of shareholdings and property transfers are effected in such a way as to minimize the incidence of tax and stamp duty.
International tax planning and restructuring
Malta has one of the most attractive tax regimes within the European Union and is considered to be one of the fastest growing financial services centres in the world. Many business investors have already shifted their business to Malta to take advantage of the following:
- Participation exemption applying to dividends and capital gains from qualifying holdings.
- The full imputation system of taxation, allowing shareholders in receipt of dividends to claim a credit for tax paid at source on such profits.
- Through the versatility of the full imputation system, Malta is able to provide several tax refund mechanisms, allowing shareholders of a Maltese company to claim refunds of part of the tax paid by the company, significantly reducing the effective tax rate paid in Malta. In respect of trading profits, a 6/7ths refund is available, resulting in an effective tax rate in Malta of only 5%.
- An extensive double taxation treaty network with over fifty double tax treaties.
- Exemption from tax and duties on transfers of shares held by non-residents (except for shares in companies owning real estate in Malta) and other exemptions.
The RSM Malta team of tax practitioners can help you in the setting up of the most tax efficient structure possible, tailor made to suit your specific requirements. Naturally, we can assist in the tax administration of the company covering all aspects of direct and indirect tax compliance issues.
Estate Planning and Trusts
Malta’s Trusts law was revamped in 2004 removing previous restrictions that precluded trusts from being used by residents. The new law was accompanied by specific fiscal provisions making the trust a tax efficient estate planning avenue if done properly. Subject to certain conditions a trust may be deemed to be transparent for tax purposes in terms of Maltese law. Alternatively, it is possible for the trustees to opt for the trust to be taxed in the same manner as a company – including the refund system mentioned above.
Foundations in Malta are generally not able to carry out business and are therefore more geared towards estate planning rather than the carrying on of business activities, although they may serve the purpose of holding of assets from which passive income is derived – such as shares in companies and intellectual property. Foundations are taxed in the same manner as trusts and can therefore be transparent on non transparent and be taxed in the same manner as companies.
The presence of both foundations and trusts in the Maltese system provides additional flexibility for tax and estate planning with many jurisdictions of either a civil law or common law tradition. Furthermore, Maltese law provide the possibility to convert one type of an entity to another – where for instance a foundation may be converted to a company or a trust – thereby ensuring long term tax and estate planning opportunities and versatility.
Our tax specialists are able to assist you in selecting, setting up and running the solution that best meets your needs and would work best with the jurisdictions that matter to you.
Indirect taxation including VAT
While our back office department is actively engaged in the preparation of periodical VAT returns and other VAT declarations, our tax department can assist on initial VAT registrations, as well as other specific VAT related advice.
Being a European Union member since 2004, Malta has adopted and implemented all relevant VAT Directives offering additional certainty for doing business in and from Malta for activities that are subject to VAT. We are actively involved in providing international VAT advice in particular to clients carrying out business in a variety of sectors both intra and extra EU, including remote gaming operators and fund managers. RSM Malta can also assist non-EU businesses in the recovery of VAT.
Furthermore, Malta has various regimes and policies that while remaining compliant with the relevant Directives may provide additional benefits over other jurisdictions – such regimes include that applicable to yacht leasing offering a potential for the application of the standard rate of VAT at a reduced percentage due to the deemed time a pleasure yacht will spend outside EU waters.
Personal Tax
We have vast experience working with a range of private clients from business entrepreneurs and company directors to expatriates and non-domiciled individuals. We will be able to assist in the preparation and submission of your income tax returns together with checking statements or assessments issued by the Commissioner of Inland Revenue. We can also handle adjustment forms, objections and appeals and negotiate with Inland Revenue Department officials to settle tax disputes.
Malta offers very attractive residence fiscal regimes to non-domiciled individuals with associated tax advantages. We can assist with the application for a Permanent Resident Scheme Certificate as well as assist in the annual compliance requirements arising from such certificate. Foreigners becoming resident under this scheme are taxed at a flat rate of 15% with a minimum tax liability of €4,192. While this scheme applies only to expats who do not engage themselves in gainfully occupied positions in Malta.
Malta claims worldwide taxation rights on persons both resident and domiciled in Malta. Therefore a foreign domiciled resident would be taxed to the standard tax rates on income derived and earned in Malta however any income that is earned outside of Malta but is not received in or remitted to Malta will not be taxed in Malta. Furthermore, Malta does not impose taxes on capital so capital derived from outside Malta and remitted to Malta will not be subject to tax in Malta.
The above fiscal principles together with Malta’s excellent Mediterranean climate make Malta a very attractive jurisdiction for retirees or high net worth individuals.