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Malta 5% scheme structure formation

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biz1

New member
What interest does the US have in Malta?

Also looking forward to your suggestions of any CFC issue mitigations in the separate thread
 

jackfrost

Entrepreneur
calculate 15 first year, then 10k going forward approx as a mean calculation. that does include the things you pay in all other countries too as explained (filings, book keeping, tax statements, refunds, virtual offices, whole thing)
 

biz1

New member
Hi everyone, can you please describe the design of the 5% (without refund) Malta setup? What criteria are needed for it to apply. I hear the term "consolidated accounting", is this really just a company group thing, e.g. you have A Ltd. >=95% owned by B Ltd. and Malta chooses to tax such constellations at a 5% total company tax?

(The next more advanced followup question would be, how can one set up such a structure *outside* Malta as a way to help a Malta CFC case.)
 

Paper Chaser

New member
Hi everyone, can you please describe the design of the 5% (without refund) Malta setup? What criteria are needed for it to apply. I hear the term "consolidated accounting", is this really just a company group thing, e.g. you have A Ltd. >=95% owned by B Ltd. and Malta chooses to tax such constellations at a 5% total company tax?

(The next more advanced followup question would be, how can one set up such a structure *outside* Malta as a way to help a Malta CFC case.)
I did not have it explained to me closer, but yeah, that's exactly what I suppose it works like.

Which CFC case are you referring to exactly?
 

biz1

New member
@Paper Chaser so what the Maltese CFC law says is, "if your CFC pays less than 50% (in its country of registration) of what it would have paid if it was based in Malta according to Malta's tax act, then it will be taxed in Malta".

The interesting thing here is that it looks to me like that if you are resident in Malta and you have that 5% setup, *but* on A Ltd.-B Ltd. which are incorporated *outside Malta*, then that will cancel the CFC rule with respect to them.

This is my best impression, I can't understand anything else from the law (@jackfrost thoughts? :) ), this was why i was curious about what the 5%-without-refund structure is made up of exactly really.
 

Paper Chaser

New member
@Paper Chaser so what the Maltese CFC law says is, "if your CFC pays less than 50% (in its country of registration) of what it would have paid if it was based in Malta according to Malta's tax act, then it will be taxed in Malta".

The interesting thing here is that it looks to me like that if you are resident in Malta and you have that 5% setup, *but* on A Ltd.-B Ltd. which are incorporated *outside Malta*, then that will cancel the CFC rule with respect to them.

This is my best impression, I can't understand anything else from the law (@jackfrost thoughts? :) ), this was why i was curious about what the 5%-without-refund structure is made up of exactly really.
You can't get the tax reduction without having at least one company incorporated in Malta.
 
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