Malta’s International Legal & Advisory Boutique

Malta - The Benefits

100% EU & OECD Compliant—A Legitimate Low Tax EU Country

0 - 5% effective corporate tax rate

Why Malta?

“Malta’s business legislation and tax systems are considered amongst the most fa-vourable in Europe and this is supported by its strategic location straddling the busiest ship-ping lanes in the Mediterranean. Malta has a strong financial services sector, and a thriving on-line gaming industry. Ongoing strategies include specific targeting of knowledge econ-omy sectors including financial services, information technology companies, research and development, and high end manufacturing.” UK’s Foreign & Commonwealth Office; 2012 With an effective corporate tax rate of 0 to 5% - for trading companies and 100% tax ex-emptions or additional low rates for passive income & royalties, Malta has one of the lowest tax regimes in the EU. As an ex British colony, Malta’s commercial laws are modelled on English law - providing comfort and peace of mind to the client and adviser alike.

A full member of the EU since 2004, Malta uses the Euro as its currency and English is an official language.

Benefits for Commercial Clients

Malta is one of few countries left in the world that still has a full imputation system. Mean-

ing, with an effective corporate tax rate of 5%, following application of tax refunds,

shareholders are 0% taxed on any dividends that they receive.

Wealth or Inheritance taxes

Property taxes

Capital Gains

Outbound withholding tax

on dividends, interest or

royalties (inbound withholding

may be reduced via treaty net-

work)

Duty on international share

issues or transfers

Transfer Pricing Rules or

thin capitalization

Controlled foreign company

laws

Entry or exit taxes

NO!!

Individuals Companies

Low Taxation Asset Holding & Structuring

Maltese, UK & International Lawyers

& Accountants

Newsflash Do your clients use offshore

payroll structures? We can provide alternative, le-gitimate corporate structures,

with substance; as well as payroll services and add-ons

Malta’s Credit Ratings Fitch - A+

Moodys - A3 Standard & Poors - BBB+

Effective post refund tax burden of 5%

MaltaOpCo pays 35% tax

Malta HoldCo receives 6/7ths refund of Malta tax paid by Malta OpCo on distributed profits

Dividend of 65

No further Malta tax on transfer of profit

Tax payment and refund can be planned to occur within 2 -4 weeks

MaltaHoldCo /Foreign Co/ or

Non Resident Indi-vidual Shareholders

MaltaOpCo

Trading Profits = 100

Refund = 30

Dividend 65

Maltese Revenue 35%

Over 62 double taxation treaties worldwide

Tax refunds are legally guaranteed and paid within 2-3 weeks of application

Use of IFRS functional convertible currency – for statutory capital, financials, tax and tax refund

purposes

Revenue rulings are binding for 5 years or 2 years following a change in legislation

Company Tax

With-out

Foreign Tax

With Foreign

Tax

Net for-eign in-come

800

800

Grossing up with foreign tax

-

42

Chargeable income

800

842

Tax at 35%

280

280

Credit – double tax relief (DTA)

(42)

Malta tax payable

280

253

Shareholder Tax Computation

Refund on distribu-tion (6/7) of gross tax

240

253

Effective tax leakage

40

0

Effective rate of corporate tax on net income

5%

0%

Malta’s tax system - the refund system in figures

Full Imputation System - tax paid at the corporate level is fully imputated at the shareholder level, meaning shareholders’ divi-dends are not taxed.

Malta Limited Company Facts

Setting up a Malta Ltd company is surprisingly easy and speedy. With low statutory

registration fees starting at €245 and a low threshold minimum authorised share capi-

tal of €1,200 of which at least 20% must be paid up, so that only €240 need be depos-

ited into a bank account.

Malta’s Tax System

Following the application of Malta’s tax refund system, depending on the refunds ap-

plied for, Malta’s corporate tax rate is substantially reduced from 35% to:

6/7ths refund for trading income = 5% tax rate

5/7th refund for passive income = 10% tax rate

2/3 refund for certain passive income = 6.25% tax rate (i.e. royalties)

100% tax exemption - patent royalties

UK / Foreign Company

Malta Parent 100% tax exemp-tion on profits

derived from sub-sidiaries and re-mitted to Malta

Acumum Legal Group: Maltese, UK & International Lawyers & Accountants

info@acumum.com | www.acumum.com | Skype ID: acumum

Malta Office +356 2778 1700 | Local Rate Numbers - UK 44 (0)20 7060 4277 & USA 1646 569 9003

Information for guidance purposes only © Acumum. All Rights Reserved

Participating Exemption - Malta as a Holding Jurisdiction

Income derived from a participating holding or from the disposal of such holding will

qualify for a participation exemption, which is intended to exempt from tax, divi-

dends and gains derived from such holdings. The income derived from a participat-

ing holding which qualifies for a participation exemption, may be altogether ex-

cluded from the tax return and as a result 0% tax will be due.

Malta’s Corporate Tax Basis What income is taxed by Maltese authorities?

*Remittance System - for those who wish not to incor-porate in Malta, but use the jurisdiction as a tax base, money not remitted to Malta is 0% tax rated. Note that some tax treaties exclude this benefit.

Aside from the Big 4 Accounting & Audit Firms, Companies already in Malta:

Key Facts—2012 Standard & Poor 2012 rating: long-term sovereign credit BBB+

Moody, Sept 2012 Government Bond Rating: A3

Fitch:, Sept 2012 Short-term IDR at 'F1' and Country Ceiling at AAA

Mixed common & civil law system – corporate, commercial & trusts laws based upon English statutes (Jersey)

English an official language

Currency: Euro

GDP €6.4 billion

GDP Growth 2.9%

GDP per Capita €15,300

Inflation rate 1.5%

12th soundest banking system & 15th position in Financial Market Development (World Economic Forum’s Global Competitiveness Re-port 2011 – 2012)

Single financial services regulatory body; MFSA

Flight times UK - 3; Frankfurt - 2, Dubai - 7

Sector Specific - Low Tax & Vat Rates

Yacht Registrations & Maritime

- Largest Shipping Registry in EU - Surpassing Greece

- 7th Largest Shipping Registry in the World

For ship owners, Malta is an attractive jurisdiction as it operates a tonnage tax system, as a result the actual income generated

by a shipping company is 0% taxed in Malta.

VAT Scheme for Yacht Finance Leasing

It is possible to reduce the VAT levied when vessels are under finance lease arrangements; provided that the vessel is owned by

a Malta registered company and the lease agreement is less than 3 years. Added to which, the lease agreement must contain

an option to purchase the yacht at the end of the lease and such agreement is approved by the Malta VAT authorities before-

hand.

The applicable Malta VAT rate levied is dependent upon the type of vessel and its deemed use within the EU. The applicable

Acumum Legal Group: Maltese, UK & International Lawyers & Accountants

info@acumum.com | www.acumum.com | Skype ID: acumum

Malta Office +356 2778 1700 | Local Rate Numbers - UK 44 (0)20 7060 4277 & USA 1646 569 9003

Information for guidance purposes only © Acumum. All Rights Reserved

Remote Gaming As one of the first EU jurisdictions to license remote gaming, Malta’s single regulatory body, the Lotter-ies Gaming Authority is particularly knowledgeable and responsive to new or established operations

either setting up or moving to Malta. Added to which are the low set - fees and costs both in respect of initial costs and on going operations.

Aviation Wanting to attract the aviation sector, Malta has introduced very beneficial fiscal regulations for the import and operation

of aircraft - for both private and commercial use. With 0% VAT and no import duties, Malta is a cost effective solution for indi-viduals or companies wanting to bring aircraft into the EU. Further benefits include:

Fractional ownership Short wear & tear depreciation periods No import duties for civil aircraft

Step-Up’ of aircraft value from book value to fair market value upon mi-gration to Malta

No stamp duty on any aircraft, as aircraft are not deemed chargeable assets under Maltese tax law

15% income flat tax rate for highly qualified individuals

Benefits for Private Clients

As a foreign resident of Malta you only pay tax on income received or remitted to Malta – 0% tax payable on worldwide in-come; 15% if you enjoy permanent residence; or 35% tax if ordinarily resident and then only on income remitted or arising in Malta.

With 0% capital gains tax on income outside of Malta, 0% wealth tax, 0% inheritance tax, Malta is a popular place to retire or live.

Essentially a civil law system, Malta has modelled its commercial law – tax, company, trusts and financial services – on UK law and is fully compliant with EU law.

Wealth Management & Estate Planning

Through effective estate planning, a client’s personal affairs and wealth can be maintained and preserved. One of the most effective tools is that of the will and the trust. Obviously, difficult questions and prob-lems may arise in international asset and property structuring.

Highly Qualified Rules - 15% Flat Income Tax Rate Malta wants to attract the gaming, aviation and financial sectors. As such new income tax rules mean that certain individuals earning €83,000 can enjoy a 15% flat rate income tax rate, fixed for 4 years for EU citizens

Malta’s International Legal & Advisory Boutique

Acumum Legal Group: Maltese, UK & International Lawyers & Accountants

info@acumum.com | www.acumum.com | Skype ID: acumum

Malta Office +356 2778 1700 | Local Rate Numbers - UK 44 (0)20 7060 4277 & USA 1646 569 9003

About Acumum Legal Group Unique in Malta, we are Maltese, UK & international lawyers & accountants, managed by a UK barrister; registered in Malta –

all with extensive on location onshore & offshore experience, providing legal & advisory services to individuals, companies,

family offices and other institutions.

We also provide advocacy services through an associated international Barristers Chambers, representing law firms and clients

– individuals, corporations, institutions & Governments before UK, EU and International Courts & Tribunals in most Common-

wealth countries.

Our Lawyers & Accountants are highly knowledgeable specialists in their fields – committed to providing cost effec-

tive, excellent client service. Utilising a multi-disciplinary & multi – jurisdictional approach, we are engaged by both private indi-

Tax

Corporate Formation & Services

Aviation

Intellectual Property - IP Holding Compa-nies & Royalty Routing

Private Client

Trusts & Estate Planning

Maritime

Public & Private Law

Financial Services

Gaming

Malta, UK, Alderney, Caribbean, USA

Industry Support

Any law may govern a Malta trust Trusts are ‘looked through’ for tax purposes

Benefits of UK modeled trust law Low service provider rates

Upon settlor’s death or insolvency - ac-counts are not frozen

Can be treated as companies in order to enjoy Malta tax treaties

May be re-domiciled to Malta Licensed and insured trustees

Fiscal benefits of using Malta trustees and

administrators

Malta’s Credit Ratings Fitch - A+

Moodys - A3 Standard & Poors - BBB+

- a viable alternative for clients with assets located in Cyprus