Maltese Tax-Effective Company Structures: The Maltese Double-Tier Structure Explained

The Maltese tax regime has historically been based on a full imputation system, further enhanced by a network of over 70 Double Taxation Agreements (DTAs), and by the possibility to apply for unilateral tax relief for countries with whom a DTA is not in place. The corporate tax rate for a company incorporated in Malta is 35%. There are instances, however, in which the features of the Maltese tax system might be beneficial and lead to cost-effective and tax-efficient solutions for businesses.

We have previously written about the Consolidated Group Rules, which were added to the legislation in 2019, introducing the concept of fiscal unity and resulting in cash flow advantages where only the effective tax rate (5%/10%) must be paid, eliminating the requirement to pay the full 35% tax and wait for the refund for Malta-based companies; the Notional Interest Rate Deduction introduced in 2017 which encourages equity financing (providing a tax deductible expense on the