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.
