Practice Areas > Corporate & Tax > Company Tax & Incentives > Full Imputation System & Tax Refunds

Overview

From a tax perspective, branches of oversea companies are only taxable in Malta on income arising in Malta and on income arising outside Malta but received in Malta. Other than this, branches are subject to the same tax rules as companies incorporated in Malta.

They are taxed at the corporate flat rate of 35%, however, upon a distribution of dividends by the oversea company, the shareholders of the oversea company may apply for a refund which may reduce the effective tax of the oversea company’s branch’s profits to 5%.

More about the Full Imputation System & Tax Refunds

Moreover, Maltese Income Tax Law doesn’t impose withholding tax on dividends or interests and royalties. Finally, branches of foreign companies may also benefit from the provisions of the applicable Malta double taxation treaty entered into between the jurisdiction in question and thus, benefit from double tax relief.

More about Relief from Double Taxation

Establishing a Malta Branch

Procedure for Establishing a Malta Branch

Oversea companies intending to establish a branch or place of business in Malta are required to deliver the following documents to the Malta Business Registry within a period of one (1) month from the establishment of such branch or place of business in Malta:

1

An authentic copy of the charter, statutes or memorandum and articles of the oversea company or other instrument constituting or defining the constitution of the oversea company, and, if the instrument is not written in the English or Maltese language, a translation thereof into either of such languages, certified to be a correct translation in such manner as may be prescribed
2

A list of the directors and company secretary, if any, or of the persons vested with the administration of the oversea company, where that company does not have directors or a company secretary, and, in all cases, a list of the persons vested with the representation of the oversea company. Such lists shall include the following particulars: (i) in the case of an individual, his name, his usual residential address, his nationality and his business occupation; and (ii) in the case of a body corporate, its registered or corporate name and registered or principal office
3

A return containing the following particulars:
(i) the name under which the branch or place of business is carrying on its activities where different from the name of the oversea company;
(ii) the address of the branch or place of business established in Malta by the oversea company, and where more than one branch or place of business has been established, there shall be indicated the address of the principal branch or place of business;
(iii) the activities to be carried out by the branch or place of business established in Malta;
(iv) the names and addresses of one or more individuals resident in Malta authorised to represent the oversea company for the activities of the branch or place of business established in Malta; and
(v) the extent of the authority of any individual falling within subparagraph
(iv), including whether that individual is authorised to act alone or jointly with others, and in the latter case, the name of any person with whom he is authorised to act
4

Unless otherwise disclosed, a return containing the following particulars about the oversea company: (i) the legal form of the oversea company; and (ii) the identity of the register in which the oversea company is registered and the number with which it is so registered.

We can help.

Gonzi & Associates, Advocates and its related company, GA Corporate Limited, are able to assist you to set-up and register a branch of your business in Malta. Contact us to understand further the advantages of setting up or relocating elements of your operation to Malta including how to increase your tax efficiency by doing so.

Select your interest

Full Imputation System & Tax Refunds
All you need to know about the Full Imputation System & Tax Refunds
Tax Exemption or 100% Refund for Holding Companies
All you need to know about tax exemptions
Double Tax Relief
All you need to know about relief of double taxation
Branches of Foreign Companies
All you need to know about incentives for branches of foreign companies
 

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