I did not have it explained to me closer, but yeah, that's exactly what I suppose it works like.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.)
You can't get the tax reduction without having at least one company incorporated in Malta.@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.