Domestic corporations paying certain types of income are subject to deduction of tax-at-source obligations as follows:
|Resident individuals||0/15 (4)||25||0|
|Non-resident corporations and individuals:|
|Non-treaty||0||0 (2)||0 (2)|
|Treaty:||(3)||0 (2)||0 (2)|
|Austria||Possible imputation refund of 2.5% of the tax suffered at company level (3)|
|Bulgaria||Possible imputation refund of 5% of the tax suffered at company level (3)|
|China, People's Republic of||0|
|Isle of Man||0|
|Korea, Republic of||0|
|Kuwait||Possible imputation refund of 20% to 25% of the tax suffered at company level (3)|
|Libya||Possible imputation refund of 20% of the tax suffered at company level (3)|
|Romania||Possible imputation refund of 30% of the tax suffered at company level (3)|
|United Arab Emirates||0|
Treaties relating to international air and shipping traffic are in force with Switzerland and the United States (US).
The numbers in parentheses refer to the following notes:
- No WHT is imposed on dividends distributed by Maltese companies (except for distributions of untaxed income to resident persons other than companies) because no additional tax is imposed on distributions other than the tax charged on the company with respect to the distributed profits. Malta makes no distinction between portfolio and substantial holdings. Under Maltese law, the dividend is grossed up by a figure representing the tax imposed on the company's profits when these were originally earned thereby. Under Malta's full-imputation system of taxation of dividends, the corporate tax is assimilated with the shareholder's personal income tax with respect to the dividend. In the shareholder's hands, the dividend is taxed at the gross amount, and the relevant amount of corporate tax offsets the shareholder's tax liability on income from all taxable sources with no further tax liability being imposed on the shareholder in respect of such dividends.
- Interest and royalty income derived by non-residents is exempt from tax in Malta as long as certain conditions are complied with (e.g. they are not effectively connected to a PE of the recipient situated in Malta).
- On the basis that Malta operates the full-imputation system of dividends, dividends are not subject to further tax when distributed by a company registered in Malta to a non-Maltese resident. Furthermore, if the rate provided under the Dividends Article in the respective treaty provides for a lower rate than the Maltese corporate tax rate incurred by the company on the respective profits (standard corporate tax rate of 35%), then this may result in a refund of Maltese tax in terms of Malta’s full imputation system (such a refund situation may arise in the treaties with Austria, Bulgaria, Kuwait, Libya, and Romania). In a number of treaties, the rate of deduction and of tax is reduced to 15% in the case of companies enjoying certain tax incentives. See also Note 1 with respect to Malta’s full-imputation system of taxation of dividends.
- Distributions of dividends by a Maltese company where the dividend represents a distribution of untaxed income attracts a 15% WHT where the shareholder is (i) a Maltese resident other than a company, (ii) a non-resident person who is directly or indirectly owned and controlled by, or acts on behalf of, a Maltese domiciled and ordinarily-resident individual, or (iii) an EU/EEA individual who has declared that at least 90% of worldwide income is derived from Malta.