Malta’s Fiscal Environment

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Malta’s Fiscal Environment Malta offers first-class value for aircraft registration. Malta imposes income tax on the world-wide income of companies resident in the country; this includes all companies incorporated or registered under any Maltese law if they are ordinarily resident, and any foreign company which is managed and controlled from Malta. The definition of income includes capital gains; hence there is no separate capital gains tax as such. Nonetheless, capital losses can only be relieved against capital gains, so the distinction is preserved within the merits of the tax computation.

Local-source income and foreign-source income are also treated separately within the computation; Maltese companies with foreign income maintain a foreign income account for this purpose. Non-resident Maltese companies pay income tax on locally-sourced income including capital gains, and on income remitted to Malta (excluding capital gains). Non-resident foreign companies on the other hand are liable to income tax on locally-sourced income only (not including capital gains). Local interest and royalty income would normally be tax exempt.

The benefits of Malta’s corporate tax system include:

  • An attractive personal and corporate tax regime;
  • A full imputation system of corporate tax enabling shareholders to benefit from a 6/7ths tax refund on dividends;
  • An outstanding holding regime;
  • Value added tax exemptions for lessors and operators; and
  • An extensive network of double taxation treaties.

Malta is a member of the European Union and is consequently wholly compliant with the safety and supervisory standards of the European Aviation Safety Agency. It is centrally located, enjoys a strong legal framework and benefits from stable economic conditions. Importantly Malta’s Aviation Authority is both pragmatic and flexible.