Taxes in Malta — Incentives for companies, individuals and yacht owners

Mal­ta is not only a hotspot for tourists enjoy­ing the sun and the pris­tine waters of the Mediter­ranean, it is also becom­ing a pop­u­lar loca­tion for com­pa­nies to set­tle their busi­ness there, and for peo­ple mov­ing to Mal­ta to save income tax. The gov­ern­ment offers sev­er­al fis­cal incen­tives for busi­ness­es and indi­vid­u­als alike.

Cor­po­rate tax

Com­pa­nies in Mal­ta have to pay 35% cor­po­rate tax. This is one of the high­est rates in the Euro­pean Union. How­ev­er, under cer­tain cir­cum­stances it is pos­si­ble to apply for a refund of 6/7 of this cor­po­ra­tion tax. In order to be eli­gi­ble for the refund the com­pa­ny needs to be struc­tured accord­ing to strict reg­u­la­tions. The lim­it­ed com­pa­ny that is reg­is­tered in Mal­ta needs to be owned by a for­eign share­hold­er or hold­ing com­pa­ny. Only then it is pos­si­ble to apply for the refund.

VAT on Plea­sure yachts

The ship reg­is­ter in Mal­ta is the sixth largest in the world. The rea­son for that are the low reg­is­tra­tion costs and a great rep­u­ta­tion of Mal­ta as a flag state. Peo­ple who are inter­est­ed in pur­chas­ing a plea­sure yacht will be hap­py to hear that the VAT on yachts in Mal­ta is not based upon the pur­chase price, it is rather cal­cu­lat­ed by the size and the intend­ed use (com­mer­cial or pri­vate). This will enable yacht own­ers to save a sig­nif­i­cant amount of mon­ey in VAT when they pur­chase a yacht in Mal­ta.

Income tax

Anoth­er inter­est­ing tax incen­tive is the income tax in Mal­ta. This can be sig­nif­i­cant­ly low­er than in oth­er Euro­pean coun­tries, and it is espe­cial­ly attrac­tive for high earn­ers. For exam­ple, income between €14,501 and €60,000 is taxed at 25% and income above that at a rate of €35%. Also con­sid­er­ing the low con­tri­bu­tions to the Nation­al Insur­ance and the rel­a­tive­ly low cost of liv­ing, Mal­ta has become a pop­u­lar choice for for­eign­ers to move here and start a career on the islands. The Glob­al Res­i­dence Pro­gramme and Indi­vid­ual Investor Pro­gramme are also two pro­grammes enabling peo­ple to ben­e­fit from the attrac­tive tax­a­tion.

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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