1. Tax System
1.1 Imputation System
Malta has always had a full imputation system of taxation, and therefore tax paid by a company is credited in full to the shareholder upon the payment of a dividend. The company tax rate is of 35% and is equal to the maximum rate of personal tax in Malta.
1.2 Different Categories of Company Income
Maltese companies are obliged, for tax purposes, to keep separate and distinct three categories of distributable reserves as follows:
- Maltese Taxed Account
- Maltese Untaxed Account
- Foreign Income Account
1.3 The Maltese Taxed Account and the Maltese Untaxed Account relate exclusively to income derived from local sources - and as such do not fall within the scope of this Memorandum.
