Maltese law provides the possibility for companies incorporated outside Malta but effectively managed and controlled in Malta (which is relatively easy to prove so) to be taxed only on a source and remittance basis.
This means that such company will only be taxed in the following instances:
on income and capital gains arising in Malta; and
on foreign income (excluding capital gains) which are remitted into a Maltese bank account.
Therefore such companies do not incur any Maltese tax on foreign income which is not remitted to Malta or on any foreign capital gains (irrespective if remitted to Malta or not). Obviously, should any Maltese tax trigger in, the possibility for tax refunds which lower the effective corporate tax rate to only 5% (the lowest in Europe) would still apply.
The use of resident non-domiciled companies could be very useful in particular for the following activities:
for companies with a considerable cash balance for investment purposes
for loan and financing operations (under Maltese legislation no transfer pricing regulations exist with respect to inter-company loans)
for companies deriving royalty income
For any queries about the aforementioned issue or other matters, kindly contact Mr Joseph Gauci (Managing Partner) at: firstname.lastname@example.org or Mr Benjamin Griscti (Senior Advisor) at: email@example.com
Julie is a law graduate who qualified with Price Waterhouse in 1994. Julie joined Smith & Williamson in 1997 and became a partner in 2001. With Mike Stevenson, Julie set up Middleton Partners offices in Salisbury and Southampton, both of which are now part of Begbies Traynor.
Julie is a member of the Insolvency Practitioners Association and is a Fellow of The Association of Business Recovery Professionals. Julie deals with all aspects of Corporate Recovery and turnaround work and takes all form of personal insolvency appointments.