Malta - A Legitimate Low Tax EU Jurisdiction; Benefits For You & Your Clients
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Malta - A Legitimate Low Tax EU Jurisdiction; Benefits For You & Your Clients

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Overview Fact Sheet of using Malta, a legitimate low tax EU jurisdiction.

Overview Fact Sheet of using Malta, a legitimate low tax EU jurisdiction.
5% effective corporate tax rate, no withholding, capital gains or entry or exit taxes. No inheritance or wealth taxes.

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Malta - A Legitimate Low Tax EU Jurisdiction; Benefits For You & Your Clients Malta - A Legitimate Low Tax EU Jurisdiction; Benefits For You & Your Clients Document Transcript

  • Malta’s International Legal & Advisory Boutique Malta - The Benefits Malta’s Credit Ratings Fitch - A+ Individuals  Companies Moodys - A3 Standard & Poors - BBB+ Low Taxation  Asset Holding & Structuring Maltese, UK 100% EU & OECD Compliant—A Legitimate Low Tax EU Country & International Lawyers 0 - 5% effective corporate tax rate & AccountantsWhy Malta? Newsflash “Malta’s business legislation and tax systems are considered amongst the most fa- Do your clients use offshorevourable in Europe and this is supported by its strategic location straddling the busiest ship- payroll structures?ping lanes in the Mediterranean. Malta has a strong financial services sector, and a thriving We can provide alternative, le-on-line gaming industry. Ongoing strategies include specific targeting of knowledge econ- gitimate corporate structures,omy sectors including financial services, information technology companies, research and with substance; as well as payrolldevelopment, and high end manufacturing.” UK’s Foreign & Commonwealth Office; 2012 services and add-onsWith an effective corporate tax rate of 0 to 5% - for trading companies and 100% tax ex- NO!!emptions or additional low rates for passive income & royalties, Malta has one of the lowesttax regimes in the EU. As an ex British colony, Malta’s commercial laws are modelled on  Wealth or Inheritance taxesEnglish law - providing comfort and peace of mind to the client and adviser alike.  Property taxes A full member of the EU since 2004, Malta uses the Euro as its currency and English is an official language.  Capital GainsBenefits for Commercial Clients  Outbound withholding taxMalta is one of few countries left in the world that still has a full imputation system. Mean- on dividends, interest or ing, with an effective corporate tax rate of 5%, following application of tax refunds, royalties (inbound withholding shareholders are 0% taxed on any dividends that they receive. may be reduced via treaty net- work)Effective post refund tax MaltaHoldCo /  Duty on international shareburden of 5% Foreign Co/ or Refund = 30 MaltaOpCo pays 35% tax Non Resident Indi- issues or transfers vidual Shareholders Malta HoldCo receives  Transfer Pricing Rules or Maltese Revenue 6/7ths refund of Malta thin capitalization Dividend 35% tax paid by Malta OpCo 65 MaltaOpCo on distributed profits  Controlled foreign company Dividend of 65 laws Trading Profits = 100  Entry or exit taxes No further Malta tax on transfer of profit  Over 62 double taxation treaties worldwide Tax payment and refund can be planned to occur  Tax refunds are legally guaranteed and paid within 2-3 weeks of application within 2 -4 weeks  Use of IFRS functional convertible currency – for statutory capital, financials, tax and tax refund purposes  Revenue rulings are binding for 5 years or 2 years following a change in legislation
  • With- With Malta’s tax system - the Company out Foreign refund system in figures Tax Foreign Tax Tax Full Imputation System - tax paid at the corporate level is fully Net for- 800 800 imputated at the shareholder level, meaning shareholders’ divi- eign in- dends are not taxed. come Malta’s Tax System Grossing - 42Following the application of Malta’s tax refund system, depending on the refunds ap- up withplied for, Malta’s corporate tax rate is substantially reduced from 35% to: foreign tax 6/7ths refund for trading income = 5% tax rate Chargeable 800 842 5/7th refund for passive income = 10% tax rate income 2/3 refund for certain passive income = 6.25% tax rate (i.e. royalties) Tax at 35% 280 280 100% tax exemption - patent royalties Malta’s Corporate Tax Basis Credit – (42) What income is taxed by Maltese authorities? double tax relief (DTA) Malta tax 280 253 payable Shareholder Tax Computation Refund on 240 253 distribu- tion (6/7) of gross tax Effective 40 0 *Remittance System - for those who wish not to incor- tax leakage porate in Malta, but use the jurisdiction as a tax base, money not remitted to Malta is 0% tax rated. Note that some tax treaties exclude this benefit. EffectiveMalta Limited Company Facts rate ofSetting up a Malta Ltd company is surprisingly easy and speedy. With low statutory corporate 5% 0% tax on netregistration fees starting at €245 and a low threshold minimum authorised share capi- incometal of €1,200 of which at least 20% must be paid up, so that only €240 need be depos-ited into a bank account. Participating Exemption - Malta as a Holding Jurisdiction Malta Parent 100% tax exemp- Income derived from a participating holding or from the disposal of such holding will tion on profits qualify for a participation exemption, which is intended to exempt from tax, divi- derived from sub- sidiaries and re- dends and gains derived from such holdings. The income derived from a participat- mitted to Malta ing holding which qualifies for a participation exemption, may be altogether ex- UK / Foreign Company cluded from the tax return and as a result 0% tax will be due. Acumum Legal Group: Maltese, UK & International Lawyers & Accountants info@acumum.com | www.acumum.com | Skype ID: acumum Malta Office +356 2778 1700 | Local Rate Numbers - UK 44 (0)20 7060 4277 & USA 1646 569 9003Information for guidance purposes only © Acumum. All Rights Reserved
  • Sector Specific - Low Tax & Vat Rates Yacht Registrations & Maritime - Largest Shipping Registry in EU - Surpassing Greece - 7th Largest Shipping Registry in the WorldFor ship owners, Malta is an attractive jurisdiction as it operates a tonnage tax system, as a result the actual income generatedby a shipping company is 0% taxed in Malta. VAT Scheme for Yacht Finance LeasingIt is possible to reduce the VAT levied when vessels are under finance lease arrangements; provided that the vessel is owned bya Malta registered company and the lease agreement is less than 3 years. Added to which, the lease agreement must containan option to purchase the yacht at the end of the lease and such agreement is approved by the Malta VAT authorities before-hand.The applicable Malta VAT rate levied is dependent upon the type of vessel and its deemed use within the EU. The applicable Remote Gaming As one of the first EU jurisdictions to license remote gaming, Malta’s single regulatory body, the Lotter- ies Gaming Authority is particularly knowledgeable and responsive to new or established operations either setting up or moving to Malta. Added to which are the low set - fees and costs both in respect ofinitial costs and on going operations. Aviation Wanting to attract the aviation sector, Malta has introduced very beneficial fiscal regulations for the import and operationof aircraft - for both private and commercial use. With 0% VAT and no import duties, Malta is a cost effective solution for indi-viduals or companies wanting to bring aircraft into the EU. Further benefits include: Fractional ownership  Short wear & tear depreciation periods  No import duties for civil aircraft Step-Up’ of aircraft value from book  No stamp duty on any aircraft, as aircraft  15% income flat tax rate for highly value to fair market value upon mi- are not deemed chargeable assets under qualified individuals gration to Malta Maltese tax law Key Facts—2012 Aside from the Big 4 Accounting & Audit Standard & Poor 2012 rating: long-term sovereign credit BBB+ Firms, Companies already in Malta: Moody, Sept 2012 Government Bond Rating: A3 Fitch:, Sept 2012 Short-term IDR at F1 and Country Ceiling at AAA Mixed common & civil law system – corporate, commercial & trusts laws based upon English statutes (Jersey) English an official language Currency: Euro GDP €6.4 billion GDP Growth 2.9% GDP per Capita €15,300 Inflation rate 1.5% 12th soundest banking system & 15th position in Financial Market Development (World Economic Forum’s Global Competitiveness Re- port 2011 – 2012) Single financial services regulatory body; MFSA Flight times UK - 3; Frankfurt - 2, Dubai - 7 Acumum Legal Group: Maltese, UK & International Lawyers & Accountants info@acumum.com | www.acumum.com | Skype ID: acumum Malta Office +356 2778 1700 | Local Rate Numbers - UK 44 (0)20 7060 4277 & USA 1646 569 9003Information for guidance purposes only © Acumum. All Rights Reserved
  • Malta’s Credit Ratings Malta’s International Legal & Fitch - A+ Moodys - A3 Advisory Boutique Standard & Poors - BBB+ - a viable alternative for clients with assets located in CyprusBenefits for Private ClientsAs a foreign resident of Malta you only pay tax on income received or remitted to Malta – 0% tax payable on worldwide in-come; 15% if you enjoy permanent residence; or 35% tax if ordinarily resident and then only on income remitted or arising inMalta.With 0% capital gains tax on income outside of Malta, 0% wealth tax, 0% inheritance tax, Malta is a popular place to retire orlive.Essentially a civil law system, Malta has modelled its commercial law – tax, company, trusts and financial services – on UK lawand is fully compliant with EU law. Highly Qualified Rules - 15% Flat Income Tax RateMalta wants to attract the gaming, aviation and financial sectors. As such new income tax rules mean that certain individualsearning €83,000 can enjoy a 15% flat rate income tax rate, fixed for 4 years for EU citizensWealth Management & Estate PlanningThrough effective estate planning, a client’s personal affairs and wealth can be maintained and preserved. One of the mosteffective tools is that of thewill and the trust. Obviously, Any law may govern a Malta trust Trusts are ‘looked through’ for tax purposesdifficult questions and prob-lems may arise in international Benefits of UK modeled trust law Low service provider ratesasset and property structuring. Upon settlor’s death or insolvency - ac- Can be treated as companies in order to Fiscal benefits of using counts are not frozen enjoy Malta tax treaties Malta trustees and administrators May be re-domiciled to Malta Licensed and insured trustees About Acumum Legal GroupUnique in Malta, we are Maltese, UK & international lawyers & accountants, managed by a UK barrister; registered in Malta –all with extensive on location onshore & offshore experience, providing legal & advisory services to individuals, companies,family offices and other institutions.We also provide advocacy services through an associated international Barristers Chambers, representing law firms and clients– individuals, corporations, institutions & Governments before UK, EU and International Courts & Tribunals in most Common-wealth countries.Our Lawyers & Accountants are highly knowledgeable specialists in their fields – committed to providing cost effec-tive, excellent client service. Utilising a multi-disciplinary & multi – jurisdictional approach, we are engaged by both private indi- Tax Private Client Financial Services Corporate Formation & Services Trusts & Estate Planning Gaming Aviation Maritime Malta, UK, Alderney, Caribbean, USAIntellectual Property - IP Holding Compa- Public & Private Law nies & Royalty Routing Industry Support Acumum Legal Group: Maltese, UK & International Lawyers & Accountants info@acumum.com | www.acumum.com | Skype ID: acumum Malta Office +356 2778 1700 | Local Rate Numbers - UK 44 (0)20 7060 4277 & USA 1646 569 9003