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Corporate tax in Malta - Full Imputation System
- Definition: shareholders receive full credit for any tax paid by the company on profits distributed as dividends, thereby avoiding double taxation.
- Excess imputation tax credits are refundable where the shareholder is liable to tax in Malta on the dividend at a rate which is lower than the company rate of tax (ie. 35%).
- Tax due by company (Advanced Company Income Tax) on the earlier of:
-18 months from year end (subject to certain conditions), or
-within stipulated time frame following the payment of a dividend.
Full Imputation System – Example
| TAXATION OF COMPANY XYZ LTD. | |
| Chargeable Income | € 100 |
| Tax at 35% | € 35 |
| Profit after taxation available for distribution | € 65 |
| TAXATION OF THE SHAREHOLDER RECEIVING DIVIDEND | |
| Gross Dividend | € 100 |
| Tax deducted by XYZ Ltd. | € 35 |
| Net Dividend | € 65 |
