Corporate tax in Malta

Full Imputation System

Definition: shareholders receive full credit for any tax paid by the company on profits distributed as dividends, thereby avoiding double taxation.
Excess imputation tax credits are refundable where the shareholder is liable to tax in Malta on the dividend at a rate which is lower than the company rate of tax (ie. 35%).
Tax due by company (Advanced Company Income Tax) on the earlier of:

-18 months from year end (subject to certain conditions), or
-within stipulated time frame following the payment of a dividend.

Examples of Full Imputation System

Taxation of Company XYZ LTD.
Chargeable Income – € 100
Tax at 35% – € 35
Profit after taxation available for distribution – € 65

Taxation of the Shareholder Receiving Divident
Gross Dividend – € 100
Tax deducted by XYZ Ltd – € 35
Net Dividend – € 65