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Malta is an EU Member State with an Exceptionally Advantageous Tax Regime

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Malta Holding Companies ideal vehicles for Spanish investors

Malta has as of April 2011, ratified over fifty double tax treaties with an extensive network of jurisdictions.  One of the beneficial double tax treaties is the one entered into between Malta and the Kingdom of Spain.  The most salient features may be summarised as follows:-

  • Dividends paid by a Spanish subsidiary to its Maltese holding shall, provided the Maltese company holds over 25% equity participation be totally exempt from tax.  Where the equity participation of the Malta company is below the aforesid threshold, the tax so charged is limited to just 5% of the gross amount of the dividends;
  • Interest charged in Spain and payable to a resident in Malta are subject to Maltese tax (usually nil);
  • Royalties charged in Spain and payable to a resident in Malta are subject to Maltese tax (usually nil)

For this reason, it is possible for investors to reap full benefit of  the double tax treaty provisions by interposing a Maltese holding between a Spanish trading company and the ultimate beneficial owner.

Continue reading Malta Double Tax Treaties (Summary Tables and Full Text)

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