In this webinar, our Managing Partner Frederico Gouveia e Silva presents the advantages of Malta as a competitive location for the management of international operations such as trading, holding, trusts and foundations, intellectual property and shipping.

1. 1
Título
NEWCO © All rights reserved 2014 We know how
Tax Planning
Opportunities

2. Contents
1. Malta
2. Tax Regime
3. Opportunities
4. NEWCO
2

3. 1. Malta
3

4. Malta
4

5. Malta
Business in Malta
5

6. Malta
Companies in Malta
6

7. 7
1. Malta
Tax regime

8. Tax Regime
Tax regime
8

9. Tax Regime
9
Effective tax rates | active income

10. Tax Regime
10
Effective tax rates | passive income

11. Tax Regime
Taxation exemption of dividends and capital gains of participating holding
(PH):
a) The shareholding has a 10% holding and a right to at least 10% of 2 of the
following:
ü Voting rights
ü Right to profits available for distribution
ü Right to the assets available for distributed on liquidation; or
b) The shareholding has a value of, at least, € 1,164 M on purchase date and has
been held for a continuous period of, at least, 183 days; or
c) Malta HoldCo has an option to buy the entirety of the outstanding shares of the
foreign company; or
d) Malta HoldCo has powers to appoint one member of the board of directors of
the subsidiary; or
e) Malta HoldCo has a right of first refusal in the case of sale, redemption or
cancellation of the outstanding subsidiary’s shares; or
f) Malta HoldCo holds a shareholding for the development of its own business
and not only as stock for resale purposes.
11
Participation Exemption

12. Tax Regime
Only in the case of dividends, the non-resident participated company also
has to comply with at least one of the following anti-avoidance conditions:
a) to be resident or incorporated in the EU; or
b) to be subject to, at least, a 15% foreign tax; or
c) more than 50% of its income does not result from passive interest or royalties
If none of these 3 conditions is met, the following conditions have to be
cumulatively met:
a) the holding by Malta HoldCo is not a portfolio investment and the non-resident
participated company does not have more than 50% of its income derived
from portfolio investment; and
b) the non-resident participated company or its passive interest and royalties
have been subject to, at least, 5% foreign tax.
12
Participation Exemption

13. Tax Regime
Malta caters for three mechanisms to eliminate double taxation applicable to
income that has been taxed at source abroad:
Application of the double taxation treaties
Unilateral tax relief
Flat rate foreign tax credit (FRFTC) of 25%
13
Double tax relief mechanisms
1
2
3

14. Tax Regime
14
Double tax relief mechanisms
Treaty
Unilateral
credit
FRFTC
Company
1- Gross income 100 100 125
2- Tax @35% 35 35 43,75
3- Tax paid abroad or FRFTC 101
152
25
4- Tax in Malta (3-2) 25 20 18,753
Shareholder
5 – Refund rate 2/3 2/3 2/3
6 – Refund (5x2, 5x4 in FRFTC) 23,33 204
12,55
7- Tax burden of the structure in Malta
( (4-6)
1,67% 0% 6,25%
|1| Example with foreign withholding tax rate of 10%
|2| Example with foreign withholding tax rate of 15%
|3| The deduction may not be greater than 85% of the tax to be paid in Malta before the FRFTC deduction but after the application of other tax
credits
|4| Limited to 20 because the refund may not be greater than the tax paid by the company
|5| In the case of FRFTC, the tax refund is calculated based on the tax paid by the company on the profits included in the dividends subject to
distribution after the deduction of the credit related to the application of the FRFTC

15. Tax Regime
15
Double taxation
treaties

16. Tax Regime
16
Foreign companies with effective management in Malta
Entities Taxation
Resident and domiciled Worldwide income
Resident or domiciled Income obtained in Malta or
obtained abroad (excluding
capital gains) and remitted to
Malta
Rule
Domicile Head-office
Residence Head-office or effective management
Foreign companies (Cyprus or other) with
effective management in Malta are taxed on a
territorial basis

17. Tax Regime
17
Personal income taxation
Regime Taxation
General regime for resident and
domiciled individuals
Progressive tax rate up to 35%
Regime for high net worth
individuals
Income obtained abroad and remitted to Malta
is taxed at a flat rate of 15%
Regime to attract highly qualified
persons
Employment income in the financial services
or e-gaming sectors is taxed at a flat rate of
15%
Third-country nationals who
qualify under the Global Residence
Programme (GRP) rules
Foreign source income remitted to Malta is
taxed at a flat rate of 15%

18. Tax Regime
18
Other advantages
Malta’s tax regime offers many other advantages:
• Withholding tax exemption on the payment of royalties, interest, dividends
or proceeds of liquidation
• Exemption of Capital Gains tax
• Flexible and straightforward anti-avoidance rules
• Advance rulings
• Possibility to redomicile companies from and to Malta
• Tax exemption on qualified intellectual property

19. Tax Regime
19
Other advantages
Malta’s tax regime offers many other advantages:
• The share capital of the companies can be denominated in any convertible
currency
• Flexibility in the choice of the tax year
• Malta accounting standards based on IFRS
• Stamp duty exemption
• Group tax relief
• Malta has no capital tax or wealth tax

20. 20
1. Malta
Opportunities

21. Opportunities
21
Trading Operations
|1| Corporate income tax

22. Opportunities
22
Holding

23. Opportunities
23
Intellectual property or financing
|1| Income exempt in Malta
|2| Taxed at 35% with 2/3
refunded and double tax relief
|3| Taxed at 35% with 6/7 refunded
and double tax relief
|4| Interest and royalties are
considered active when they are a
result of the company’s business
activity

24. Opportunities
24
Financial leasing of yachts and aircrafts

25. Opportunities
ü Shipping and Aviation
ü Short-term Yacht chartering
ü Trusts and Foundations
ü E-gaming
ü Investment funds
25
Other Opportunities

26. 26

27. NEWCO
• Full service corporate service provider in Malta and Madeira
• 23 years of experience
• Strategic values: Know-how, customer satisfaction, integrity, service
excellence and innovation
27

28. NEWCO
NEWCO ensures that its clients receive all the necessary support for
effectively establishing their companies in Malta, namely with:
• Company incorporation and registration
• Supply of the respective registered office and related services, companies’
management and administration
• Tax compliance, legal, financial, tax and accounting assistance,
consultancy and assistance in the creation of investment projects
• Services with the purpose to facilitate the setting-up of companies in
Malta (offices, equipment, human resources…)
28

29. NEWCO
29
89%
of
clients
Consider that
NEWCO has a
wide knowledge
of all issues
related to their
jurisdiction
87%
of
clients
Recognize that
NEWCO offers
leading services
in its sector of
activity
93%
of
clients
State that they
are highly likely
to
recommending
our company to
their peers and
partners
“Honest and
Professional.”
Giuseppe Luongo
President
YOUTHSTREAM GROUP
Monaco
“I consider the understanding of customer
needs and willingness to accommodate
and find appropriate solutions the key
differentiator of NEWCO service.”
Luís Franco
Vice-President
SurveyMonkey
Palo Alto, EUA

30. http://www.newco.pro/en/library
Learn more about these and other topics about Malta in our library

31. 31
Título
31
THANK YOU.
Frederico Gouveia e Silva
frederico.silva@newco.pro
skype frederico.silva.newco
M. (+351) 967 819 308
www.newco.pro
Follow our Blog in www.newco.pro/blog
Jorge Veiga França
jvf@newco.pro
Skype: jvf.newco
M. (+351) 965 235 692