Malta Tax Rebate 6/7

[Jay Hastings]

Hello, Im new to the forum, but have been reading for a while. Has any one ever requested the tax refund available for Maltese Corporations? 6/7 of paid taxes resulting in a 5% effective tax rate.

Thanks

 

[clovismalleck]

One of our company branch is in Malta. But tax wise as i know they are becoming a lil hard, i think they are also ideal for fintech services.

 

[Sols]

What do you want to know in particular? If anyone has done it? Yes, lots of people have done it resulting in the net effective 5% tax rate.

 

[UScorp]

Yes we did a couple times , worked smoothly . We have a Ltd / Holding structure

 

[Osleak]

Yes me too last year they took 10 days to send me refund, i hope they will do it fastly this year aswell

 

[Jay Hastings]

@Sols @UScorp @Osleak thank you for your replies, I'm trying to move a tech company from a latinamerican country to malta(DTT exist between countries), and charge my customers for the use of the software plus all other expenses related. I have several questions:

1.- I will have 100% accounting profits and no expenses on the NewCo im creating, (dont want any sort of hassle with the tax authorities in Malta) is this worth it?
2.- How do i treat VAT? do i have to pay 18% vat?
3.- Can non-resident shareholders have a salary?
4.- I am aware that i will get my refund in september of the following year, this always gets approved?
5.- After I get the refund can I transfer all my dividends to a jurisdiction like the Isle of Man without Withholding?
6.- Can you recomend a reliable tax accountant or lawyer in malta to consult details?

 

[Sols]

1.- I will have 100% accounting profits and no expenses on the NewCo im creating, (dont want any sort of hassle with the tax authorities in Malta) is this worth it?
2.- How do i treat VAT? do i have to pay 18% vat?
3.- Can non-resident shareholders have a salary?
4.- I am aware that i will get my refund in september of the following year, this always gets approved?
5.- After I get the refund can I transfer all my dividends to a jurisdiction like the Isle of Man without Withholding?
6.- Can you recomend a reliable tax accountant or lawyer in malta to consult details?

1. I'm not sure I understand what benefits that would bring, but I also don't see any problems with it. Would probably depend on the exact nature of the set up. Something for a lawyer to advice you on.
2. 18% VAT is the VAT rate for most domestic sales within Malta. For sales to other EU/EEA members, you need to (after a threshold is reached) either pay that country's VAT rate to that country or use the aptly named VAT MOSS. If you're new to EU, I'm afraid you have a lot of reading to do about VAT. If you're selling to Latin America, you won't have to charge VAT.
3. Yes, although most people structure it as loans or other forms of payment (such as invoicing as consultants) rather than salary to avoid payroll overheads.
4. It's usually faster than that. The IRD isn't consistent but the rebate is usually paid back within a few days to a few weeks.
5. AFAIK, no problem but always better to discuss these exact details with a lawyer.
6. WH Partners, HBM/E-Management, Chetcucti Cauchi, Calamatta Cuscheri, and CSB are among the most well-known ones. Then there are dozens of more boutique firms.

 

[Osleak]

Yes we did a couple times , worked smoothly . We have a Ltd / Holding structure

Which company you have as holding of your Malta Ltd?
Have your holding also bank account where you get the dividend or also your accountant told you that is possible to ger refund directly to your personal account or to the account of Malta ltd trading?

 

[Jay Hastings]

thanks a lot @Sols this was very helpful, i will read more about VAT.

 

[Jay Hastings]

Been reviewing the Maltese Law, it seems that if i derive income from abroad, i have to pay a 25% flat rate, any one know how to make all of my income qualify as maltese income to be subject to the 35% rate and the refund?

 

[Osleak]

1. I'm not sure I understand what benefits that would bring, but I also don't see any problems with it. Would probably depend on the exact nature of the set up. Something for a lawyer to advice you on.
2. 18% VAT is the VAT rate for most domestic sales within Malta. For sales to other EU/EEA members, you need to (after a threshold is reached) either pay that country's VAT rate to that country or use the aptly named VAT MOSS. If you're new to EU, I'm afraid you have a lot of reading to do about VAT. If you're selling to Latin America, you won't have to charge VAT.
3. Yes, although most people structure it as loans or other forms of payment (such as invoicing as consultants) rather than salary to avoid payroll overheads.
4. It's usually faster than that. The IRD isn't consistent but the rebate is usually paid back within a few days to a few weeks.
5. AFAIK, no problem but always better to discuss these exact details with a lawyer.
6. WH Partners, HBM/E-Management, Chetcucti Cauchi, Calamatta Cuscheri, and CSB are among the most well-known ones. Then there are dozens of more boutique firms.

This year looks like the refund is little slower than past year...

Last year i paid taxes of 2018 tax statement first week of September and i get refund in 8/10 days, this year i’m waiting for approval yet!

 

[Jay Hastings]

This year looks like the refund is little slower than past year...

Last year i paid taxes of 2018 tax statement first week of September and i get refund in 8/10 days, this year i’m waiting for approval yet!

Please update this when you get paid, what type of structure are you running?

 

[Osleak]

Ltd malta hold by ltd uk... very simple structure my accountant told me better structure without nominees... i’ll update you

 

[GrumpyMess]

Ltd malta hold by ltd uk... very simple structure my accountant told me better structure without nominees... i’ll update you

What's the benefit of using 2 companies? Are you a malteese resident?

 

[Osleak]

What's the benefit of using 2 companies? Are you a malteese resident?

yes i'm resident non dom in Malta

 

[Jay Hastings]

I'm looking into setting up a Malta Ltd held by UAE IBC, to do international business only

 

[GrumpyMess]

Ltd malta hold by ltd uk... very simple structure my accountant told me better structure without nominees... i’ll update you

What's the best structure? What are yearly running costs of both companies?

yes i'm resident non dom in Malta

Isn't your UK corp falls under CFC law especially "non-trading income of no more than EUR 75,000" ?

 

[Martin Everson]

@Osleak What GrumpyMess says goes against the below that you said. I guess your UK holding company never gets dividends of more than 75k right?

The CFC rule shall not apply in relation to an entity or permanent establishment:

1. with accounting profits of no more than seven hundred and fifty thousand euro (€750,000), and non-trading income of no more than seventy-five thousand euro (€75,000);

Or your Malta accountant just filing zero returns for your UK holding company as you said below in which case no dividends are ever paid from Malta company right?

Just checked they filled annual return as dormant, company status is active but The accounts are like dormant

 

[Osleak]

Or your Malta accountant just filing zero returns for your UK holding company as you said below in which case no dividends are ever paid from Malta company right?
[/QUOTE]

no dividend to Holding correct

 

[Spinat]

I'm looking into setting up a Malta Ltd held by UAE IBC, to do international business only

What agent will you be using for the UAE setup if you don't mind telling?