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Taxes are a necessary part of life, but for some countries, there are more tax benefits than for others. Malta is one of those countries.

With its favourable tax regime, Malta offers some of the best tax benefits in Europe, making it an attractive option for those looking to do business or even to just live there.

In this blog post, we will explore the benefits of taxation in Malta and how people can make use of them.

An introduction to taxation in Malta

As a member of the EU, Malta maintains its extremely attractive tax system for foreign investors despite not being an offshore jurisdiction. Foreign-owned Maltese companies are entitled to a tax refund that results in 5% Corporation Tax, the lowest corporate tax rate in Europe. Furthermore, foreign-owned Maltese holding companies are exempt from all tax. Malta has no withholding taxes or stamp duty, and there is no dividend tax in certain circumstances. In addition to low company formation and maintenance fees, the island country has smart economic policies that have protected it from the global financial crisis. Incorporating a Malta company is not only cost-effective, but also safe.

Typically, Malta is favoured by small businesses engaged in trading, but it is also favoured by larger companies dealing with ship and aircraft registrations and online betting. Earlier this year, Malta’s government passed new regulations for Cryptocurrency Businesses, attracting a new sector. Since English is widely spoken in Malta, many European investors transfer their businesses from other EU member states to Malta. For foreign investors looking to relocate, Malta has beneficial options for work or residency permits.


The advantages of taxation in Malta

Malta is renowned for its attractive taxation system, offering numerous tax benefits to companies and individuals. The typical corporation tax rate in Malta is 35%, although the government has implemented several initiatives which enable companies to benefit from significantly lower tax rates.

For example, for companies whose owners are not considered a tax resident in Malta, you are able to reclaim 30% tax, meaning that the effective corporation tax rate would be reduced to 5% tax! This makes Malta’s corporate tax rate the lowest in the European Union, allowing companies to benefit from an incredibly advantageous tax rate. This can be a major factor when it comes to deciding on where to establish a business or move assets. Additionally, the Maltese government offers generous tax advantages on research and development expenses and a broad range of grants and incentives, making it even more appealing to businesses.

Additionally, a registered holding company in Malta can make use of 0% dividend tax. This means that any profit from a subsidiary of a registered Maltese company can be paid out to the shareholders via dividends and there is no tax liability due to being paid out in dividends. This allows the company to benefit from Malta’s tax benefits and make the most of their taxation opportunities. Malta is a great choice for individuals and businesses looking to take advantage of the various tax advantages on offer.


How RHJ Accountants can help

At RHJ Accountants, we are experts in the tax benefits and advantages that Malta has to offer. We can help individuals and businesses take advantage of the 5% corporation tax rate or 0% tax rate that is available in the country. Arrange a consultation with our international tax team to discuss how you can best benefit from these tax rates.

We are also able to assist with applications for residency or citizenship for those looking to relocate to Malta. This would make it easier for individuals to access the tax advantages available in the country. Our team at RHJ Law have an in-depth understanding of the visa processes for Malta, schedule a consultation with them to discuss your options.

What about Portugal?

If you don’t fancy moving to or creating a business in Malta, why not think about the option of Portugal instead?

Our expert team understand all the tax benefits and advantages that Portugal can provide, so we can help you take advantage of the 5% corporation tax rate that is available in Portugal. Arrange a consultation with our international tax team to understand how you can benefit from this low tax rate.

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