Low tax countries in Europe — Why Malta is a good choice

Sev­er­al coun­tries in Europe offer a rel­a­tive­ly low cor­po­rate tax when for­eign com­pa­nies decide to set­tle on the islands. Low tax coun­tries are usu­al­ly coun­tries that charge an effec­tive cor­po­rate tax of low­er than 25%. The low­er tax rate is not the same in every coun­try, and there are oth­er fac­tors that should influ­ence the deci­sion to move he com­pa­ny to a dif­fer­ent coun­try as well.

Some of the most pop­u­lar low tax coun­tries are Mal­ta, Cyprus and Ire­land. Due to free­dom of estab­lish­ment com­pa­nies in Europe are allowed to set­tle their com­pa­ny where they wish and to ben­e­fit from the tax­a­tion of the respec­tive coun­try. How­ev­er, when doing so it is impor­tant not to make mis­takes, as mis­takes could have reper­cus­sions in your home coun­try, and you could be pros­e­cut­ed for tax eva­sion. It is impor­tant that you con­sid­er the eco­nom­ic sit­u­a­tion to ensure that the future of your com­pa­ny and that of your employ­ees is secured. The banks and their sta­bil­i­ty are also play­ing a major role. With regards to the banks, Mal­ta has a clear advan­tage over Cyprus, as the con­ser­v­a­tive bank­ing ethics made the banks sta­ble, and they passed the ECB stress test last year — in con­trast to the banks in Cyprus.

Some coun­tries — among them Lux­em­bourg — are also cur­rent­ly under inves­ti­ga­tion, as it came to light that some com­pa­nies received a favourable tax­a­tion. This prac­tice is against the Euro­pean laws, that states that all com­pa­nies should be treat­ed the same. This is the case in Mal­ta and all com­pa­nies have to pay 35% cor­po­ra­tion tax. If the com­pa­ny is struc­tured cor­rect­ly and it can be proven that com­pa­ny oper­a­tions are based in Mal­ta and rev­enues are active­ly gen­er­at­ed, then it is pos­si­ble to apply for a refund of 6/7 of this cor­po­ra­tion tax.

Mal­ta has the low­est effec­tive cor­po­ra­tion tax in Europe. Com­pared to Cyprus, Mal­ta can also pro­vide for excel­lent con­nec­tiv­i­ty to the Euro­pean main­land. Many air­lines offer mul­ti­ple flights every day to all major Euro­pean cities. Com­pared to Ire­land, I would like to point out that the weath­er in Mal­ta is con­sid­er­ably bet­ter. Mal­ta has hot sum­mers and mild win­ters, and if you love the Mediter­ranean, this is your place to be.

For more infor­ma­tion about Mal­ta as a loca­tion for your com­pa­ny, and how to pro­ceed, you are wel­come to sched­ule a per­son­al con­sul­ta­tion at our legal office in Mal­ta.

About Philipp Sauerborn

In 2005, Philipp Sauer­born joined the firm of St. Matthew in Lon­don, one of the lead­ing Ger­man account­ing firms in Eng­land renowned for its exper­tise in cor­po­rate, com­mer­cial and tax law, as a depart­ment head. After three years, he was a part­ner and man­ag­ing direc­tor.
Towards the end of 2011, he decid­ed to move to Mal­ta, where he first worked at inter­na­tion­al law firms and con­sul­tan­cies in an employed and con­sult­ing capac­i­ty. Since the begin­ning of 2013, he has been a senior employ­ee at Dr. Wern­er & Part­ner. Mr. Sauer­born is cur­rent­ly com­plet­ing his ADIT ‑Advanced Diplo­ma in Inter­na­tion­al Tax.

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